Although cryptocurrency positions itself as safer money, there are still risks of loss. Read on for 7 best ways to secure your crypto.
If you keep a large sum of US dollars or euros in your bank account, these funds are insured by a specialist bank deposit insurance institution. As for cryptocurrencies, they work a bit differently than the fiat money we are used to. Crypto is money that works within a decentralized financial system, where there are no intermediaries and no central regulator.
Also, there is nobody that guarantees the safety of your funds. Notably, as of 2022, over 25% of BTC (Bitcoin tokens) are considered to be lost forever due to theft and loss of crypto wallets' private keys. And it is no longer possible to recover or return these funds. While some major platforms like Coinbase and Binance offer their own systems to protect user funds, they can only cover a portion of possible losses.
Therefore, securing your crypto savings falls entirely on your shoulders. And we're here to tell you the 7 best ways to secure your crypto so you can protect your savings from cybercriminals.
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Two-Factor Authentication for Wallets
The easiest and most affordable way to get crypto is to buy it on a centralized exchange like J2TX or Binance. Because centralized exchanges follow KYC (Know Your Customer) practices, you lose your anonymity and some crypto security too.
If an attacker manages to get access to your account on the crypto platform, s/he will be able to withdraw the tokens to his/her wallet leaving you with nothing. And that's why perhaps the easiest and best way to store crypto on an exchange account is to use two-factor authentication. With this feature, you will validate every transaction on your crypto account twice. This may look like a request for a secret code sent to your mobile phone or a request for biometric data.
Either way, two-factor authentication acts as an extra layer of protection for your crypto savings stored in your exchange account. Keep in mind that if you have bought a lot of tokens, you should consider how to store cryptocurrency offline, because storing digital assets in exchange accounts is a very risky venture even if you use two-factor authentication.
Use Only Trustworthy Crypto Mobile Apps
If you prefer to manage your crypto savings on the go via mobile crypto apps, then you need to take care in choosing the safest way to store crypto. Essentially the only way to store and manage digital assets, wallets are also the only way to scam crypto.
For example, you may trust J2TX, a licensed brokerage platform, but mistakenly download an app published by scammers. Therefore, to avoid falling prey to scammers looking to profit at your expense, adhere to the following tips when choosing crypto apps:
Pick only trusted apps with a large user base.
Read reviews of the apps. People are happy to share their negative experiences, so having a few valid complaints about crypto security can be a good reason not to use a crypto app.
Carefully check the name and address of the resource from which you are downloading the crypto app. Although apps published on Google and Apple Marketplaces are thoroughly vetted, the risks of being exposed to fraudulent software remain.
Finally, do not choose apps from platforms introduced recently, no matter how promising they may seem.
Do Not Store Large Amounts of Tokens on Exchanges
What attracts cybercriminals to exchanges is that they store billions of dollars worth of tokens. To avoid the potential threat and stay on the safe side, simply withdraw the tokens you bought on the exchange to a decentralized crypto app or crypto wallet. If you're wondering where to store cryptocurrency, there's probably nothing better than a hardware wallet, and we'll talk more about that below.
However, even a hot crypto wallet can be much more secure than an exchange account. If you ask professional crypto investors, they will tell you that they only keep a small number of tokens in exchange accounts for trading purposes. And you should emulate this behaviour to ensure the security of your digital assets.
Don't Spread the Seed-Phrase
As known, crypto wallet software generates a seed phrase so that you can regain access to your account in case your password is lost. Essentially, this is a set of a few words that you should write down and store in a safe place that potential attackers cannot access.
Once they get hold of the seed phrase, they will be able to reset the password to your wallet and gain access to the digital assets stored in it. In addition, you no longer have any other options to reset your password in case you forget it. If you also lose your seed phrase, you will not be able to access your digital assets.
Think of a Strong Password
As practice shows, many users are too careless with passwords that lock out access to things of value, including crypto accounts. Even if you choose a secure app that provides the safest way to store buy Bitcoin with card or another crypto, a weak and unreliable password will be cracked in just seconds. According to some online services, many people still use passwords consisting of a few digits, like “1234”.
Imagine you deposited your hard-earned crypto into your wallet and set a weak password. An intruder would be able to access your digital assets in a matter of minutes. Therefore, take care to create a really strong password by following these guidelines:
- Use a combination of lower and upper case letters and numbers.
- Do not use the names of your children, pets or birthdates of anyone as part of your password.
- Create a password with a minimum of 8 characters.
- Do not generate passwords from unverified online services, as they may belong to fraudsters.
There are many other tips for creating and managing passwords. Take responsibility for this, as a password is like a key to the door behind which your most precious possessions are stored.
Allocate Digital Assets Between Multiple Wallets
Even if you are not a major crypto investor, there is still no more frustrating experience than losing your purchased tokens. Since there is always the risk of losing access to a crypto wallet or forfeiting tokens through theft, the best thing you can do is to put the eggs in several baskets.
That is, create several different crypto wallets and keep your tokens separate. For example, you can create a hot wallet to store a small number of coins for trading, while transferring your main savings to a cold or hardware wallet that provides more protection. A hardware wallet is a USB device which is used to store your crypto keys. This device has no Internet connection, so attackers will not be able to access it. Most of the time, your hardware wallet will be sitting idle.
You will only be able to use it if you connect it to your computer via USB. Although a hardware wallet is still not ideal, you will greatly increase the security of your crypto savings if you keep it in a safe place.
Use Reliable Networks
To perform any transactions with your crypto, you need an Internet connection. When you are at home, you can feel safe as long as your Wi-Fi network is secured. However, we do not recommend conducting any crypto transactions when you are in a coffee shop or restaurant as the wireless network available there may not be secure.
There are many tools used by attackers to intercept Internet traffic. By sniffing your communications, they can find out not only what sites you visit but also some other information they can use to examine your crypto transactions. If you are transferring quite large sums of money, you will be a tempting target for cybercriminals.
Using a VPN can be a very effective way to protect your online traffic. However, choose reliable services that you can trust. There are many free VPN services with ads and poor data protection. Moreover, some of these services may be owned by crooks. Although using a reliable VPN service can cost you $10-20 per month, it's much cheaper than losing valuable assets stored in your crypto wallet.
Closing Thoughts
While cryptocurrency cannot be seen or touched, it has real value, which is why many crypto holders are targeted by fraudsters. The crypto market continues to evolve rapidly, and as activity increases, there are more and more ways to steal tokens.
So, give preference to secure crypto apps, don't keep large amounts in exchange accounts, use strong passwords, don't divulge seed phrases and use trustworthy networks. Also, diversify how you store crypto and learn about how to store cryptocurrency offline (in a hardware wallet) to ensure the highest level of security.
F.A.Q.
1. Why is crypto so popular?
Because digital assets have a certain value: they can be used as money to pay for goods and services, as an asset for trading and as a means of storing wealth.2
2. Which token is the safest?
As the most popular and in-demand, buy Bitcoin with credit card is also considered the most secure. There are many reliable software and hardware wallets used to securely store BTC.
3. What is the best way to store crypto?
It depends on how many tokens you have and how you want to manage them. If you have a large sum of coins, storing them in a hardware wallet is the best option from a security point of view.
4. How safe is cryptocurrency?
In simple terms, it is much safer than fiat money. However, even the cryptographic methods used to secure the tokens do not provide a 100% guarantee that you will never lose them as a result of a hacker attack.
5. What is the safest way to store crypto?
Hardware wallets are still considered the safest because they are almost always disconnected from the Internet. Moreover, advanced hardware wallet models use additional security measures such as passwords.
6. Can I recover or return my tokens in case of loss or theft?
If you lose tokens stored on a major crypto exchange, the company behind the platform can partially recover your losses. However, staying in a decentralized environment (i.e., using decentralized crypto platforms), you cannot recover lost or stolen tokens as there is no central regulator or arbitrator in the crypto space.