Crypto wallet security: how not to lose all your funds?
The aspect of storing cryptocurrencies is really important.
Even if you are a successful investor or trader, or just managed to make money on cryptocurrency, there is a chance to lose all your funds if you use unreliable wallets incorrectly. In this article, we will analyze this problem in more detail. How to keep a crypto wallet secure ? How to store cryptocurrency and what basic rules should be followed in order not to lose your funds.
Crypto wallet security: what rules should be followed?
We have analyzed what wallets exist for storing cryptocurrencies. However, any type of wallet or storage method has its own vulnerabilities. There is a certain set of recommendations that you should follow in order not to lose your money.
These can be both general rules for storing cryptocurrencies, as well as specific examples of additional protection for your hot or cold wallet. First, we will analyze the basic storage security rules, and then we will look at specific examples.
Basic Safety Rules
It is highly recommended to have a separate mail for your accounts of exchanges and crypto wallets. Your primary mailing address, which is used for daily needs, will not work. There is a big risk that it has long been hacked and the leaked data is stored on darknet sites. If an attacker gains access to your mail, he can easily change the password on your wallet through this mail. It is recommended to start google mail, as it is the most secure.
It is worth using secure networks. You should not go into a wallet or exchange via public Wi-Fi. Such an action can also lead to the interception of your data by attackers. Therefore, you need to use home networks or secure mobile Internet.
The first and most important rule is diversification. Or, more simply, division. This rule is the success of absolutely any investment, and the storage of cryptocurrency is no exception. You should never keep all 100% of your funds in one wallet or physical medium. Many investors and traders often say, “Don’t put all your eggs in one basket.”
In order not to lose all your funds from one unsuccessful investment or after hacking a single wallet or account on the exchange, you need to separate them.
You can split the funds you want to constantly trade across multiple exchanges and hot wallets. Then when the exchange closes or one of the wallets is hacked, you will not lose all your funds at once.
It’s the same with a cold wallet. Divide funds into different wallets and flash drives, then the chance of losing everything at once is reduced to zero.
In fact, this rule can be adopted in any aspect of your life, and especially in finances. You can only invest a certain percentage of your money in cryptocurrency. The money that you set aside for cryptocurrency will also be divided into different assets. And spread all these assets into different wallets: hot, exchange, cold hardware. Then the risk of accidental failure and bankruptcy will be minimal.
More password copies!
Speaking of cold storage, do not forget to make additional copies of your passwords on paper or buy several flash drives. That way, if you lose one data drive, you’ll always have a spare. This may be obvious advice, but very effective.
There are many ways to deceive you. For example, an attacker can create an exact copy of an exchange or wallet website by changing one letter in the website address.
Therefore, mindfulness is an important factor. Before logging into your account, always check the name of the site in the search bar itself. If you enter your data on such a fake site, then they will immediately appear with the attackers. Then you can say goodbye to your funds.
2FA Autentificator is a smartphone app that generates a random code every 30 seconds. Every time you log into your wallet, it will ask for this code. So you can additionally protect yourself from hacking your wallet over the network.
This method is an additional protection to literally any exchange account or hot wallet. Usually, all exchanges and wallets themselves offer to install additional protection in the form of this code. This should never be abandoned, since this method of protection is effective against hacking accounts and wallets.
Even if an attacker was able to hack your login and password from the exchange, he will never be able and will not have time to find this login code. Thus, you will greatly secure your funds. One of the most popular of these applications is two-factor authentication from Google.
So far, most cryptocurrency exchanges do not have any special licenses and guarantees that your funds are safe. Even the most popular and largest exchanges do not have any government licenses. Therefore, they are not strictly pressed by the legislation of different countries. This means that there is a risk that the exchange will close at one moment for any reason.
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.
Security of a crypto wallet is the key to successful investments
Apply all of the above methods of protection in real practice. Then you can be calm about your investments and profits in cryptocurrency.
When working with cryptocurrency, you should always remember about the rules of its storage. It is important to adhere to the principle of diversification and always be on the lookout, try not to make mistakes and maintain the security of the crypto wallet.
Remember that cryptocurrency is a very specific area and it needs a special approach, including in storage. The safety of your cryptocurrency will depend on your actions. When choosing any of these methods, do not forget about security, then you are guaranteed to be able to become a successful investor!