Fiat money can be protected by Government regulations and insurances. Cryptocurrencies on the other hand is not backed by any Authority and you are solely responsible for the security of your hard earnt cryptocurrency. There have been instances earlier where people have lost millions of worth of cryptocurrencies owing to cyber theft and even loss due to ignorance.
The following sections provide you a list of “Must follow steps” you need to follow to have that safety for your cryptocurrencies.
Use Hardware Wallets
There are two kinds of Crypto Wallets. Hardware Wallets and Hot Wallets.
Hot Wallets are in the form of an application or website which can be downloaded in your laptop, mobile phone, desktop or tablets. Since the Hot Wallets are connected to the Internet, they are vulnerable to cyber attacks and thefts.
Hardware Wallets are physical electronic devices developed for the sole purpose of storing Cryptocurrencies. You can save it in your locker or any safe place and create a back up to avoid the risks of any theft or burglary.
Hence when large sums of Cryptocurrencies are involved always use a Hardware Wallet to store them. You can use a Hot Wallet to start with as these are free, but eventually as you accumulate large sums of Crypto always switch to a Hardware Wallet.
Some of the trusted Hardware Wallets are Ledger Nano, TREZOR T. Though I suggest you to carry your own holistic research before selecting a wallet.
Use Wallets from Known Sources
Crypto world is fairly new and there are new developments going on every day in this space. Most of the companies that offer a Wallet(Hardware and Hot Wallets both) are fairly new. There are hell lot of wallets available in the market which will offer you attractive benefits, but in reality are malware in disguise.
Hence choose a regulated Exchange and Wallet and never go for a lesser known Wallet. Some of the well known and secure Hardware Wallets are Ledger Nano S, Ledger Nano X, TREZOR T, TREZOR One.
Do not keep Crypto in Exchanges
Crypto Exchanges are the web portals from where you can buy Crypto using credit cards, debit cards, etc. Ex: Coinbase, Coinmama. They give you the option of storing your Crypto in these Exchanges themselves. But do not follow this practice of storing your Crypto in these Exchanges. The Exchange Databases which are maintained online are vulnerable to cyber crimes. Even some of the new Exchanges being opened everyday are frauds themselves.
You can check the below listed frauds in the Crypto space which made people loose multi millions of funds invested in Cryptos.
- Bitfinex hack where users lost close to $70 million
- Mt Gox hack where users lost close to $450 million
Hence never practice storing your Crypto Money in Exchanges. Always use a Hardware or at least a Hot Wallet to store your Crypto.
Two Factor Authentication
Two-Factor Authentication is when two layers of identifications are required for you to login to a system. In most of the crypto wallets you will be asked to enter two different credentials (passwords, biometric information like face, IRIS, finger print) in order to access your wallet data. For example first you can be asked to enter your password and when you get this correct you can be asked for your fingerprint. This is the safe and advisable feature in any wallet you buy or download.
Hence always use a Wallet that uses a Two-Factor Authentication to access your cryptocurrencies.
Virtual Private Network (VPN)
The Wi-Fi that you use can be accessed to your Hackers. At least the Internet Service Provider (ISP) can completely track your internet activities and can share this information with bad people. The public wi-fi is a great treat to the hackers to enter your computer and steal your private data.
Hence always use a Virtual Private Network (VPN) when it comes to managing your cryptos. such as ExpressVPN and TunnelBear will prevent your information from being intercepted. A VPN will also hide your identity, location, and IP address which identifies your device.
Whether you are a trader or a hodler, you need to learn to keep your crypto assets safe. You need to learn a little technicality in detecting malwares and phishing sites available in the internet which will completely wipe up all your crypto assets. There is no Central Authority involved here (and we do not want them to be involved either) which is responsible for keeping your assets safe. The art of becoming your own bank surely requires you to be more responsible and aware of the intricacies in the game.
Stay safe and healthy.