Starting to trade in cryptocurrencies is one thing, storing crypto assets safely is another, which needs entirely different knowledge and skills. We’re going to have a look at how to keep your digital assets safe, choosing the right wallet, and how to avoid the most common hazards when it comes to crypto security.
So, What’s A Crypto Wallet?
A cryptocurrency wallet is a software program that has been specifically designed to send and receive digital currencies, store your public and private keys, monitor their balance, and interact with a range of blockchains. In order to look after your crypto digital assets, you need to have a cryptocurrency wallet to keep them secure.
There are many different cryptocurrency wallets available, but the essential distinction you need to make is whether they are hot or cold.
Hot Wallet – A hot wallet is one that can be accessed at any time and is connected to the internet. They include most mobile wallets, software wallets, exchange, and cloud wallets.
Cold Wallet – A cold wallet isn’t connected to the internet and allows you to store your funds on an offline basis. You’re still able to receive funds at any time, but no-one can transfer them out. These wallets include hardware wallets, USB and other data storage devices, physical Bitcoins and offline kept paper wallets.
You will find that most cryptocurrency holders use both cold and hot wallets. If you are frequently trading, then a hot wallet should be your choice, but if you are looking for long-term holding, go for the cold.
Different Types of Cryptocurrency Wallets
There are four main categories of cryptocurrency wallets: hardware, cloud, paper, and online.
Hardware Wallets
Hardware wallets have the capability to store your private keys on an external storage device. They are completely cold and completely secure. You also have the ability to make online payments. You can find some hardware wallets that are highly compatible with many web interfaces and also support multiple currencies. The whole design is made to help you make a transaction in a convenient and easy way. These are considered to be the safest way to store your digital assets. The only problem, they’re not free to use.
Paper Wallets
These are cold storage and the term paper wallet derives from the fact that this is a physical paper copy of your public and private keys. It can also mean software that generates a pair of keys along with a digital file for you to print. These can provide you with a relatively high level of security. Although paper wallets are cold, you need to be aware that there is still an element of risk. They can be easily damaged, easy to сopy, easy to photograph and if you’re not making one yourself, they need to have an element of trust. Some people choose to store their paper wallets in different locations, create multiple copies, engrave the into sturdy materials, and laminate them. Bear in mind that you should never store a digital copy of your paper wallet; it should remain offline at all times.
Cloud Wallets
Cloud wallets are considered as hot. You will be accessing your funds from any device or location using a cloud wallet. Considered as one of the most convenient ways of keeping your digital assets safe, cloud wallets store your private keys online and can also be controlled by a third party. However, this does mean that they are much more vulnerable to theft and attacks.
Software Wallets
This type of wallet is downloaded and installed on a personal computer or device. They are hot. They can offer a high level of security, but they cannot protect you against viruses or hacks. This means it is always essential for you to try and remain malware-free. These are very similar to a desktop wallet; they can be easily accessed and maintained. You can even access funds simultaneously, so if you have more than one person with access, it makes this an ideal choice.
Your choice of wallet is going to depend highly on your portfolio. You need to have a native wallet for any serious project which should also be found on its website.
When looking at how to keep your digital assets safe, you need to think about some of the best ways you can help prevent stolen keys. Some of the most common steps include:
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Try to avoid keeping your cryptocurrency in exchange for prolonged periods of time.
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Always use two-factor authentication (2FA) function.
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If you opt for a hardware wallet, make sure your pin code is hard to guess and never put your recovery sheet online.
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Don’t store any of your crypto holdings in your real name or address.
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Some thieves manage to steal details even when kept in a cold form.
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Only trust what you see on the hardware wallet and make sure you verify the information on your device.
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Always make sure you are aware that your storage can get compromised at any time.
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Always be aware of who could be looking over your shoulder if accessing it in a non-private zone.
In addition to this you should learn how to keep your digital assets safe by using some of these tips:
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Be completely aware of Phishing Sites.
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Only log on to sites that have a valid HTTPS certificate.
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Make sure you are using a secure Wi-Fi Connection. Avoid using public Wi-Fi.
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Don’t keep all your assets in one place.
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Always use Two-factor Authentication.
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Use your static IP address for your safety.
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Always double check Crypto addresses.
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Make sure you are familiar with all the different security measures that you can use. Some people never feel completely secure and go into even further lengths to help secure their assets. Try not to over complicate your security measures; losing access is even worse than it not be secure.
Learning how to keep your digital assets safe is of the utmost importance for any trader. It’s critical for you to master it in order to become your own bank. The sooner you learn how to do this the better you are at keeping your digital assets safe.