How To Keep Cryptocurrency Safe?
Essential Tips for Storing and Using Crypto in Terms of Cybersecurity
Table of contents:
- What Is a Cryptocurrency Wallet?
- Do Any Banks Store Cryptocurrencies?
- Crypto Wallet Security: Tips from Quickex
- Basic Cryptocurrency Safety Rule: Use Separate Email
- Always Use Safe Internet to Save Your Crypto
- More Password Copies! Paper and Flash Drives for Storing Crypto Keys and Passwords
- Be Careful of Fishing When Entering an Exchange or Wallet
- 2FA Authentication: Strictly Recommended To Save Your Crypto
- Find Some Licensed Exchanges If You Need Maximal Security
- How To Safely Transfer Cryptocurrency
In order to effectively keep the cryptocurrency safe, first of all it is necessary to study and understand the nature of this phenomenon. What often confuses newcomers is the understanding that cryptocurrency is not something tangible, from which many conclude that it does not seem to exist at all. Nevertheless, people who bought houses, Lamborghini and other life-beautifying things for bitcoins and ethers will certainly disagree with this statement. Indeed, cryptocurrencies are not represented by tangible carriers, such as banknotes, bonds or precious metals (although some of them are backed by such assets). Cryptocurrencies are a digital code on the blockchain, an information data log located on the Internet.
Therefore, when we talk about the safe storage of cryptocurrencies, we are primarily talking about information security. It is from this topic that you should start studying cryptocurrencies, because the higher the popularity of this type of asset, the more people look at them as an object of lust, and not all of them want to get cryptocurrency in an honest way. But seriously, with the growing number of cryptocurrencies, an army of hackers is multiplying, aimed at stealing these cryptocurrencies from honest citizens in any way. Therefore, the issue of cybersecurity is a question of the safety of your capital when it comes to cryptocurrencies. Like a fiat currency, cryptocurrency is stored in a wallet. This wallet is not a physical one. This is an application, a computer program designed for operations within one or more crypto networks. Let's look at how they differ and which one is the safest.
Of course, it has little to do with a product made of leather and textile. It is an address on the blockchain network to which cryptos come and from which they are sent to other wallet addresses. Outwardly, it looks like a long series of characters, which is very difficult to remember. Among crypto wallets, several varieties are distinguished: Online wallets are used when someone does not have the desire or ability to install the wallet application on a computer device. This type of wallet is a “hot” one. It is located in a cloud and is accessible from any device connected to the web. The creators of such wallets can be special services designed to store cryptocurrencies, crypto exchanges, and electronic money systems like Payeer, Payoneer, etc. One of the leaders in simplicity and security in this area is Blockchain.com. Most well-known exchanges also have their wallet apps. However, it is important to understand that an online wallet is always associated with a much greater risk of hacking than all others because your coins are stored by the online platform that you entrusted them to, and if hackers get access to it, your funds can be stolen. Therefore, it makes sense to use this kind of wallet for small amounts transferring only. Desktop and smartphone apps are, perhaps, the easiest and most convenient way to store crypto. They are called “cold” wallets because most of the time they are not connected to the network — they connect to it only when the transaction is on its way. It takes minutes to learn and install some of the simplest and most secure applications like Electrum, Exodus or MyEtherWallet. For security, you need to write down a special seed-phrase along with the password and put them in a safe place. The first is needed if you are reinstalling the wallet when the computer is lost, the second you print every time you enter the app and send a transaction. Desktop wallets from trusted developers can be called a completely safe solution — they cannot be hacked through the network. Hardware wallets are another type of cold wallets that are usually used for significant crypto amounts storing. Unlike the above two methods, this one is paid: you will need to purchase a special device. In appearance, it looks like a USB flash drive, and all operations with it are possible only after manual authorization in offline mode. Such a device costs from $70 to $200, which is relatively inexpensive when it comes to large savings. For many years, Trezor and Ledger have held the lead in this area — their devices have proven to be completely reliable. This method of storage is considered the most secure, since the phone or laptop can be lost, and this type of wallet can even be deposited in a bank vault.
Initially, the cryptocurrency was conceived as a kind of antagonist of banks. The first cryptocurrency, Bitcoin, proposed by Satoshi Nakamoto, was supposed to be a replacement for banks, since it transferred control over money directly to their owners themselves. Therefore, historically, banks have not favored cryptocurrencies - in particular, in 2018, the three largest US banks, JP Morgan, Bank of America and Citigroup, banned their customers from buying cryptocurrencies on exchanges using their bank cards. But times are changing, and now small banks in the USA, Canada, Estonia and Switzerland receive licenses for crypto operations. These steps are very indicative, they show a positive trend of recent times, when cryptocurrency is becoming more and more respectable money. Nevertheless, the main principle of ensuring the security of cryptocurrencies is careful attention to all keys and passwords for wallets. If they are lost, no one will be able to give you access to your funds.
Even persons experienced in trading or investing can easily lose their capital if they do not sufficiently study the rules for the safe storage of cryptocurrencies. How to maintain the security of a crypto wallet? How to store cryptocurrency and what basic rules should be followed so as not to lose your funds.
It is highly recommended to have separate mail for your exchanges and crypto wallets accounts. Your primary mailing address, which is used for daily needs, doesn`t fit. There is a big risk that it has long been hacked and the leaked data is stored on darknet sites. Remember: if a cybercriminal gets access to your mail, he can easily change the password on your wallet through this mail. It is recommended to start google mail, because it is the most secure.
It is worth using secure networks. Never log into the wallet and do not exchange via public Wi-Fi. Attackers can intercept your data and use it to enter your wallet or account on the exchange. If you only knew how many people have suffered from their frivolity! Always use only your home or personal mobile Internet, being sure that no one can connect to it.
Cold storage of cryptocurrencies assumes your full responsibility for the wallet numbers, the seed phrase and the public/private keys that open your wallet. Cold storage is primarily the storage of this data, and it should be carried out as safely as possible. Always remember that your computer may break down, your laptop may be stolen, and your phone may crash. In order not to be left without your cryptographic tags, do not forget to make additional copies of your passwords on paper, and also put them on several flash drives. Thus, if you lose one data disk, you will always have a spare one. This may be obvious advice, but it is very effective.
There are many ways to deceive you. Scammers have long learned to fake websites, passing off their exact copy as the portal itself, where people can store money. Just one inaccurately entered letter or symbol will take you to a phishing site, where after you enter the login details to your wallet, you can say goodbye to your bicoins, ethers, and so on. Therefore, mindfulness is an important factor. Before logging into your account, always check the site name in the search bar itself.
2FA Authenticator is an application from Google that generates a random code on your smartphone every 30 seconds. Every time you log into your wallet or perform important actions on the exchange, the site's security system will ask you for this code. By enabling two-factor authentication, you additionally protect yourself from hacking your wallet over the network. We strongly recommend that you always connect 2FA wherever you will be required to perform live operations with a cryptocurrency wallet. This method is an additional protection for literally any exchange account or hot wallet. Today, any exchange and wallet will definitely ask you to connect 2FA, and this protection is worth it to figure out how everything works at once. Even if an attacker can crack your account password, he will not be able to conduct transactions with your crypto money, because the six-digit code will only come to your mobile device. Thus, you will significantly secure your funds and will be able to be absolutely calm for their safety. In addition to Google, two-factor authentication is also offered by a number of other developers, but Google is the most popular of them.
To date, most cryptocurrency exchanges do not guarantee the safety of your funds in any way. You will be surprised, but even the most popular of them, those that are proud of huge turnover, do not have state licenses. The fact that there are no guarantees of the safety of funds is evidenced by numerous hacks of exchanges whose users have lost their funds forever. To minimize this risk, register on licensed exchanges, such as Liechtenstein or Swiss (Lykke). Such exchanges are licensed and operate legally. Therefore, nothing threatens your funds. However, you need to remember that on such exchanges you will definitely need to go through the user verification procedure and confirm your identity and location.
When sending cryptocurrency, it is very important that you enter your wallet address and copy the address of ours correctly. Remember, in cryptocurrency networks it is impossible to return the payment, so only you are responsible for the correctness of the address entered. If you make a mistake by at least one character, the payment will go to the wrong place. Therefore, an important rule when working with cryptocurrency is: be sure to check the correctness of the entered address, and when copying, always use the special copy button. Today, there are wallet clients that support many different cryptocurrencies at the same time. Also, each blockchain network has its own wallet client. You can choose any client that is most convenient for you, but the security rule for all of them is always the same: always check if you entered the address correctly. Crypto transfers are easy. You just need to stay careful.
Author name: Albert Galeev
Quickex.io partner writes