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How to store cryptocurrency safely in 2022

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One of the essential factors to consider when going into the world of digital currency in 2022 is safety. No one wants to loos the assets they acquire with their hard-earned money. And this is why the knowledge of the safe way to store crypto should be prioritized. Yes, different knowledge and skills will be required to keep your crypto assets safe. Sit back to learn how your funds can be protected by selecting the appropriate wallet and preventing the common risks of virtual asset security.

About cryptocurrency wallet

A crypto wallet is a well-designed software program for the storage of both private and public keys, transferring, and receiving virtual currencies, monitoring balance, and interacting with several blockchains. This wallet is needed to manage cryptos and keep them secure properly.

Moreover, cryptocurrency wallets can either be cold or hot. A cold wallet requires no internet connection for the storage of funds. With it, you can receive funds, but you won’t be able to transfer them. Examples of cold wallets include USB and similar offline data storage devices, offline paper wallets, hardware wallets, and some physical bearer items (physical Bitcoins).

A hot wallet requires an internet connection, and it can be used at any time. Examples include mobile, online cloud wallets, exchanges, and software wallets.

Crypto wallet types

Cryptocurrency wallets are of four different types, including;  paper, hardware, cloud, and software.

1.   Paper wallets

Paper wallets are cold wallets, which are the paper print or the physical copy of private and public keys. It’s a wallet type with a high level of security. It can be imported into a software client, or its QR code can be scanned to transfer funds.

Despite the security benefits attached to the use of paper wallets, they feature some shortcomings. These relate to how they can get damaged easily, how easily they can be copied and snapped, and how they require mutual trust between the sender and the recipient.

To deal with these challenges, people usually laminate them, store them in separate locations, create many copies, or inscribe them on sturdy materials. But you shouldn’t keep the copies on your PC as online information. This can expose the private key of the paper wallet to online risks.

2.   Hardware wallets

Hardware wallets keep private keys on external devices such as USB. They are cold crypto wallets with guaranteed security. You can also use hardware wallets for online payments. This is because some of them support web interfaces and multiple currencies. Although they are not available for free, hardware wallets are the safest way to store crypto assets. The well-known hardware wallets include devices by KeepKey, Trezor, and Ledger.

3.   Cloud wallets

Cloud wallets are easy means of accessing funds from any location using a PC or device. Although they are a convenient type of crypto wallet, they store private keys online and can give third parties control, making them susceptible to theft and attacks. The well-known cloud wallets are Guarda, Coinbase, Metamask, and Blockchain.info. A better alternative to cloud wallets regarding safety is non-custodial online wallets. These include Crypto.com DeFi wallet, LocalCryptos, and Bitwala.

4.   Software wallets

Software wallets are hot wallets that crypto users can download and install on their PCs or smartphones. Although they provide a high level of security, software wallets are susceptible to viruses and hacks due to malware. Several software wallets support accessing funds through multiple devices at the same time, including laptops, smartphones, and even hardware wallets. Popular software wallets include Jaxx, Freewallet, Exodus, Electrum Wallet, and Infino Wallet.

How to store cryptocurrency safely

One crucial step to controlling your digital currency and ensuring that everything is held in a private wallet is to learn how to constantly remain secure and maintain the confidentiality of your private keys. So what are the security steps to take?

  1. Research the site: Not all sites are safe. Some imitate exchanges to steal crypto users’ personal details. So ensure that you always confirm the address before logging in to know if it’s correct. To tell if a website is secure, check if it has a valid HTTPS certificate.
  2. Enable two-factor authentication: Rather than using SMS, you should opt for software or hardware 2FA instruments. And you should always ensure that the two-factor authentication function is enabled for account security.
  3. Manage your funds properly: You should try to use one or several cold wallets for long-term holdings and one or more hot storages for transactions and trading. This is to avoid the risks that come with keeping your assets in a single place. Besides, you should avoid keeping your crypto assets in exchange longer than necessary.
  4. Use security tools that you understand: To avoid losing your crypto, you should be cautious about how to secure your assets. For hardware wallets, select a  pin code you can easily remember and avoid putting your 24-word recovery sheet online.
  5. Go for a secure Wi-Fi connection: You should avoid using public WiFi for your exchange account, online wallet, or other critical security points. Before using a WiFi connection, ensure the encryption is strong ( WPA-2 protocol is a good example).

Several fraudsters are out there looking for digital assets to siphon. To ensure that your account is safe and your funds are appropriately stored, you should consider security practices. The sooner you get acquainted with all the security actions, the better and stronger your defense against hacks.

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