Almost 5 million Bitcoins are presumably lost because of thievery, abandoned private keys and foul-ups such as a trader named James Howells who accidentally tossed out his hard drive which stored 7500 BTC ($127 million) in 2013. This example is very illustrative: getting digital coins is only half the success. It is equally important secure cryptocurrencies and choose the most appropriate option to store them.
What is the danger related to crypto wallets?
Crypto wallet is a key point in understanding how to make sure that your digital assets will not be hacked or stolen. They keep different types of security keys, act as intermediaries in transferring cryptocurrencies, audit their current balance and interfere with blockchain (Bitcoin, Ethereum or any other). Thus, many hacker attacks and fraudulent actions are aimed at receiving access to your digital wallet and, consequently, secret keys.
There are several important considerations worth taking into account when opening your first crypto wallet. First of all, it is important to choose the wallet that matches your investment profile and goals. Thus, think what kind of strategy (long-term, HODL, Buy the Dip, etc.) you are pursuing, because it will eventually determine the kind of wallet suitable for your profile. Secondly, it is important to understand particular features and specifics of the crypto storage that you will decide to use. All digital wallets can theoretically be divided into two groups: cold and hot. Hot wallets (cloud-, software-, mobile- or exchange-based) require Internet access in order to be managed. In its turn, cold wallets (hardware, paper, USB or real-world items, such as physical Bitcoin Cash) offer offline storing options which allow receiving funds, but not sending them. Most traders store their cryptocurrencies on both types of wallets which is also considered to be a good security measure.
When considering the ways to secure cryptocurrencies, remember the golden cryptocurrencies rule: “decentralisation puts the responsibility of storing the key exclusively on investor’s shoulders”.
Given that cryptocurrencies are governed by the blockchain technology rather than a particular body, every individual user is in charge of their own digital assets except for the cases when they pass through a crypto exchange or any other centralised entity.
Recommendations on how to be on the safe side
So you have decided to protect your digital funds by keeping them in a particular crypto wallet. Remember that you are now responsible for storing your crypto and keeping all of your secret codes confidential. Below are the most well-known security measures:
- Don’t use cryptocurrency exchanges for keeping your crypto investments longer than needed.
- Always remember to activate 2FA authentication feature. If possible, choose offline 2FA tools or 2FA hardware instead of SMS.
- To protect your hardware wallets, select a PIN that is hard to figure out and never share private recovery sheets online.
- Don’t use your name, home address or other identifiable details when discussing your crypto belongings on cryptocurrency platforms. Some hackers succeed to misappropriate funds even if a user holds them in a well-secured online or any other kind of storage.
- Trust only verifiable information that you can personally check on your wallet’s official website or account
- Always presume that your gadget can get endangered at any moment so use your smartphone or laptop with caution.
Additionally, consider the following recommendations to reduce the possibility of your crypto being lost or hacked.
Beware of Phishing Websites and check HTTPS
Remember to verify the website URL before accessing your private information in online wallet or exchange. A lot of fraudulent sites look exactly like well-known crypto exchanges in order to steal users’ log-in details. For example, authorised websites have a verified HTTPS confirmation certificate. You can browse a popular “HTTPS Everywhere” extension which automatically converts sites from unsafe “http” to trustworthy “https”.
Select secure Wireless Networks
Never use open WiFis to log-in to your web wallet, cryptocurrency exchange or any other account that may contain your personal data. Even if you consider the WiFi point as trustworthy, ensure that it has secure encryption such as WPA or WPA2 protocol.
Use several crypto wallets
It is never a good idea to store all your crypto funds in one wallet. The best strategy for those who are interested in long-term investment is to use two or more cold wallets and one online wallet for active trading and cryptocurrencies transfers.
IP whitelisting instruments and Static IP
Set a static IP address in order to protect your crypto accounts. Moreover, you can use IP Whitelist feature to limit the access to your investments and control who can view them.
Pay attention at Bitcoin Addresses
Some malicious software programs can change and paste an incorrect address when user makes a transaction. In most cases, the configured address is affiliated with a hacker. Only a manual check can protect you from this widespread scam.
In order to reach the highest protection levels, some users apply the most advanced security tools which they don’t fully understand. As a result, their actions often become irreversible and they lose their crypto funds. Complexity and safety should always be balanced.
The Benefits of Godex.io
Godex.io offers secure, anonymous and fast cryptocurrency swaps without the need to register an account or provide personal data. This online exchange allows to seamlessly trade more than 210 different cryptocurrencies as well as effectively manage the investment portfolio. Traders have an opportunity to use an excellent online exchange service while staying within their crypto wallet provided that it is integrated with Godex. There is no need to register a new online wallet when using Godex. With security as one of our key priorities, users can withdraw or exchange any cryptocurrency at any time without risking their digital funds.
Knowing how to secure cryptocurrencies is an important skill to learn when aiming to become a successful cryptocurrency trader. Stay on the safe side and choose only secure and trusted storing options that suit your investment goals. And remember: your cryptocurrency security is in your hands.