Cryptocurrency Wallets Guide (02):
How to Secure Your Cryptocurrency Wallet in 2020
In the previous articles of Altrady - your trusted multi exchange crypto trading platform, we have learned that crypto wallets are what we need to secure our altcoin and bitcoin funds. Given that knowledge about the purpose and function of crypto wallets, then we now have to move further into learning how to secure crypto wallets in order to keep our funds safe.
What should we do to retrieve our hardware crypto wallets in case of loss? How can we trade bitcoin in exchanges like Binance, Coinbase, or Bittrex without fear that our crypto assets will suddenly vanish out of thin air?
Before we look into the ways of protecting our cryptocurrency wallets, let us first go back to the essential information that we have discussed in the four previous crypto blogs:
What are crypto wallets?
A cryptocurrency wallet keeps a record of your crypto transactions that are found in the blockchain. It stores public and private keys that would allow you to interact with the blockchain so that you could hold, send, receive, or spend bitcoin or altcoins however you wish.
Cryptocurrency wallet types can be categorized into hot or cold. Hot wallets are basically connected to the internet, while cold storage options are not.
Among the hot wallet types are software wallets such as desktop wallets, mobile wallets, and web wallets. Included in web wallets are those that you use in a crypto exchange platform like your Binance wallet. Meanwhile, cold wallet types are paper wallets and hardware crypto wallets.
These different wallet types have their advantages and disadvantages with trade-offs that you have to consider when choosing.
So what steps should we take to minimize the risks when it comes to the use of some types of crypto wallets? What can we do to protect our bitcoin funds or secure our cryptocurrencies in 2020?
SECURING HOT CRYPTO WALLETS
#1 Be wise in choosing your online wallet service provider and cryptocurrency exchange platform. Being wise means checking their security features such as two-factor authentications and ascertaining the availability of fund insurance in case of unfortunate events.
#2 It is better to leave out only a portion of your digital assets in hot wallets. Again, the wisdom of never putting all your eggs in one basket or spreading out your digital assets applies here. Hot wallets are best for frequent transactions because of their convenience but can be prone to viruses and hacking attempts due to its exposure to the internet.
#3 Encrypt your online backup. If you have a backup that is also stored online, then you should be able to encrypt such.
#4 Be diligent enough to backup your cryptocurrency wallet regularly.
#5 Use a strong password - it is always recommended that you create passwords that have a combination of uppercase letters, lowercase letters, numbers, and symbols.
#6 Be sure to remember your passwords. A lot of people have lost access to their funds simply because of forgotten passwords.
#7 Do not access your online wallets using public networks. Most public networks can have security flaws, and this could compromise your funds. If you are outside your home, it is advised to simply use your phone’s hotspot in case you need to access your web or desktop wallet.
#8 Install a legitimate and reliable anti-virus software to protect your computer activities, including crypto wallet access from being compromised.
#9 Do not click on suspicious links that you receive from your social media and email inboxes. Hackers can lure you into clicking certain links then redirect you to cloned websites or get into your online activities.
SECURING YOUR COLD WALLETS
#1 If you are still using a paper wallet, be sure to store and protect your document by laminating the paper or securing it in a plastic envelope. Keep it in a dry environment away from sunlight because heat and humidity can affect the longevity of your document. Take note that paper can also be in danger of being destroyed by termites, floods, and other human natural disasters.
#2 Remember that paper wallets can only be used once. You can only transfer the entirety of your funds from the paper wallet and never a partial amount from it.
#3 When printing the generated keys, better check the network connection of your printer and turn it off in case.
#4 Do not let anyone get a glimpse of your keys or seed phrase.
#5 Buy hardware crypto wallets from trustworthy and competent manufacturers. Reliable manufacturers of hardware cryptocurrency wallets use sophisticated technology to protect the sanctity of your crypto device.
#6 Backup your private keys and seed phrase so that you can still access your hardware wallet in case it gets stolen, damaged, or lost.
#7 Protect your hardware wallet by setting up a pin code. This will ensure that no one can easily access your cold wallet even if it falls into the hands of another person.
Your funds are your responsibility. No matter what type of cryptocurrency wallet you get, security and safety cannot be ascertained if you do not perform the right precautionary measures.
To learn more about investing and trading cryptocurrencies, watch the useful yet simple cryptocurrency trading videos prepared by altrady!