The same way you keep cash or cards safe in a wallet or bank is the same way your cryptocurrency needs to be stored safely. Users store their crypto in web-based or hardware-based digital wallets. The digital wallet can be on mobile phones, desktop computers, laptops, or paper-based. The main focus of this article is to share the safest way to store crypto currency.
The safety of your cryptocurrency depends on your knowledge of proper storage. With the rise of cryptocurrency users, safe storage has become essential. More people are using cryptocurrency.
The growth rate is good news, but it comes with the dangers of crypto theft. So, how can you keep your crypto safe? Here are the safest ways to store crypto.
Store Small Amounts of Crypto in Hot Wallets
Hot wallets are like check-in accounts. Store only small amounts of the crypto you want to transact immediately. Avoid storing bulk crypto like a large amount of Bitcoin in hot wallets like Binance, Coinbase, or Gemini. These accounts do not have insurance, and you will lose all your funds if the account is compromised.
All hot wallets are connected to the internet, making them prone to cyber-attacks and risks. Some of the online risks that can cause you to lose your crypto are.
- Phishing attacks
- Private keyword or password theft
- Device hacking
- Virus attacks
Backup Crypto Wallets
Regular backups are essential. Make sure you back up all your crypto wallets. Backups will help you recover crypto in a digital wallet in case of a system failure.
Have the most recent history of your wallet stored in various secure locations. Store them on a hard drive, USB drive, or CD, and set strong passwords.
Update Software
Keep your crypto software updated. Updated software helps to keep crypto safe. Operating a wallet on outdated software makes you prone to online attacks.
Old software can be vulnerable to viruses, and hackers can find loopholes to access your private information. They can divert your crypto to a different wallet and steal while you watch.
An updated software has enhanced security features that make it difficult for attackers to steal. Consistent software updates make your crypto storage safer.
Cold Wallet Storage
Storing crypto in cold wallets is the safest option. Cold wallets are not connected to the internet lowering the risks of cyber-attacks and theft. Passwords and private keys are safer because users store them offline and in parallel software that others cannot access.
Hardware Wallet: Hard Drive
A hard drive is a hardware wallet that helps you securely store your passwords and private keys. Viruses are not likely to affect a well-stored hard drive. Keep your hard disk or USB drive in a safe location where it will not be in contact with the internet.
Paper Based Wallet
A paper-based wallet is another type of cold wallet. Generate your paper wallet from a website and print it. The paper wallet has private and public keys you can laminate and store in a home safe or bank. They are secure because online users cannot access the paper wallet.
Multi-Signature Storage
Multi-signature storage helps to limit crypto theft. It’s a type of storage that requires more than one person to authorize the use of crypto.
Crypto is stored in a way that requires at least three signatures before a transaction occurs. It means other members of a group must approve a transaction.
Conclusion
Theft, computer failure, or viruses are risks associated with storing cryptocurrencies. Users need to know the various ways to keep their crypto safe online and offline.
Avoid storing bulk crypto in hot wallets and use cold wallets, backups, and software updates to keep crypto safe.