What Are Crypto Wallets?
If you’re new to the world of
cryptocurrency, you might be confused as to why you need a wallet to keep your
assets safe. A crypto wallet is a digital wallet that acts like an app,
service, and digital bank simultaneously. It’s a platform where crypto users
store their public and private keys to ensure their crypto coins’ safety.
There are two types of crypto
wallets:
Hot wallets are classified as the
type that needs an Internet connection to function. Some common examples are
MetaMask and Exodus, two of the most popular hot wallets that most crypto
enthusiasts trust.
On the other hand, there are also
cold wallets. They don’t need an Internet connection, and they’re incredibly
similar to a USB device. Using a cold wallet will require some handy technical
knowledge upon setting up. Hardware
wallets like Trezor are considered safer
than hot wallets. But don’t worry because the hassle is worth it.
However, it does have a con; there’s
no turning back if you ever lose it. Also, unlike most log-in interfaces, cold
wallets don’t have a “forgot password” option.
How To Secure Your Cold Wallets
From Hackers
1.
Back It Up
One of the best security practices
you must follow is always back up your cold wallet. And for good measure, back
it up once more. In the world of cryptocurrency, being too safe is never too
much. You’re just being smart about your choices because they can affect your
income and future in crypto.
2.
Store Your Cold Wallet Somewhere
Safe
Of course, you should keep your cold
wallet(s) in a secure location where it won’t get wet or destroyed. And for
safety reasons, you shouldn’t keep all your wallets in one place. It’s pretty
standard for crypto users to invest in safe deposit boxes and fireproof safes for
maximum security.
3.
Change Your Passcode Frequently
It’s not a surprise that plenty of
individuals use the same password across numerous devices and social media
platforms. Unfortunately, this is where data breaches occur. And with
cryptocurrency that converts into high sums of physical cash, hackers exert
more effort.
With this in mind, always use a
strong and unique password specifically for your cold wallets. And it would
help if you changed it now and then to prevent unauthorized users from
accessing your data and hard-earned assets.
4.
Take Advantage Of Multi-Factor
Authentication System
Multi-Factor Authentication will
allow you to add another layer of security to your cold wallet. Just consider
this: if financial accounts such as banks require MFA, why shouldn’t you?
Some seasoned crypto investors buy
techy devices to add MFA into their wallets. For example, using a separate
phone catered explicitly to your crypto wallet would be an ideal move. Doing
this allows users to do all their crypto transactions away from their personal
business. As a result, they effectively put up a wall between their crypto
investments and their daily smartphone activities.
5.
Keep Your Crypto Investments
Private
Posting your crypto achievements on
social media could be a tragic way to lose all your coins, so be wary of
oversharing. You shouldn’t be one of those people who broadcast that they’ve
recently gotten into crypto or bought a considerable sum of this new coin.
Because chances are, silent hackers might try to get into your device and gain
access to your crypto assets.
So remember: the less you say about
your investments, the less likely it is for hackers to know that you’re an easy
target.
Another thing to consider is setting
up a separate email account for your crypto transactions. You’re entirely
isolating all cryptocurrency transactions from other financial investments by
doing this.
6.
Always Protect Your Assets From
Phishing Scams
Just because you’re using a hardware
wallet does not mean you’re safe from phishing scams. Because just like how
hackers send scam emails using bank accounts, credit cards, and other
“credible” financial institutions, they can do it too by using a faux crypto
platform. The email might bring you to the hacker’s webpage, where you might be
tempted to enter your passcode and other necessary information.
It would help if you also were wary
of suspicious online ads because they could also lead to the loss of your
crypto assets. And as always, be vigilant when using
credit cards to purchase cryptocurrency.
Using a cold wallet is not just an
additional safety precaution — it’s a necessity when dealing with
cryptocurrency. It allows you to have complete control over your crypto
investments. It also provides the best security for your encryptions and
private keys, significantly reducing the risk of hacking.
At the end of the day, you are the
only person who can control your cold wallet’s security. And because the
cryptocurrency community is constantly changing, you must continuously upgrade
your security provisions. Doing this would keep you a step ahead of hackers who
want to make easy money by stealing.