Explained: How To Secure Your Crypto Wallet?

One of the reasons many people have been hesitant to engage in cryptocurrency is the security risk.

Hackers can steal cryptocurrency by stealing or guessing your password, hacking an exchange platform, luring information from you in phishing attempts, and many other methods.

The most common attack, however, is the theft of a crypto wallet’s private keys. Getting a crypto wallet entails receiving a private key, which you must keep safe.

While it is unlikely that you can be completely secure against all possible attacks, there are many things you can do to secure cryptocurrency and reduce your risk level.

How to Secure Your Crypto Wallet?

1. Choose your crypto wallet carefully

Online wallets, also known as “hot wallets,” are easy to use and don’t require expensive investments to buy dedicated hardware devices, but they are vulnerable to online hacks or theft.

If you have or are planning to buy a significant amount of cryptocurrency, then storing those assets in a hardware wallet promises much more safety and security than online wallets.

2. Always use two-factor authentication (2FA)

Not using 2FA for your crypto wallets is just too risky. By requiring verification before engaging in account operations such as signing in, withdrawing, or sending payments, you essentially put an extra layer of security on your funds.

When you enable 2FA, you will quickly see if someone is attempting to access your wallet.

3. Change your passwords on a regular basis, or use a password manager

Given the flood of hacking cases, you can expect your credentials to be hacked at some point. Creating a difficult password, keeping it safe, and changing it periodically are the least you can do.

When choosing a password for your crypto wallet, avoid using any passwords that you have previously used. Passwords should be stored in a password manager rather than in your browser (much safer). If you can write it down rather than using any software, that would also be great. Finally, change your password every six months or so.

Also Read: Best Risk Management Strategies To Mitigate Risks In Crypto Market

4. Keep your seed phrase in a safe place

A seed phrase, also known as a recovery phrase, is a set of words that functions as a master password, allowing you to recover your crypto assets even if you forget your password, or lose your phone or hardware device.

Unfortunately, there is no “forgot password” option. As a result, if you misplace your seed phrase, you will, without exception, lose access to your wallet. Keep the seed phrase offline and safe. Simply, write it on a piece of paper and keep it in the same place where you store your important documents.

5. Regularly backup your wallet

What if you misplace or break your device? Your digital assets may be gone forever if you haven’t backed up your wallet.
Backing up your wallet entails generating a digital key that allows you to access your wallet in the event that your device is lost or damaged. This digital key is stored outside of your device. For easy account recovery, use several backup devices.

6. Use the multi-signature feature

As the name implies, multi-signature wallets require transaction authorization via multiple keys, which means that a group of users must sign to approve a transaction. Some cryptocurrency wallet providers enable this feature, which prevents unauthorised users from accessing the wallet without the necessary digital signatures.

Without such permission, hackers will be unable to access your wallet and steal your crypto assets. If you haven’t already, check to see if your wallet has this option available.

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7. The private key must be kept confidential

Consider your private key to be the equivalent of your bank PIN. You must keep this secure since it is the key to your hard-earned money.

Keeping your private keys offline is one way to protect your wallet and your assets. You can either use cold storage devices or write them down on paper and keep them in a secure place.

8. Be cautious of phishing

Phishing is a type of targeted attack in which an attacker poses as a legitimate entity in order to obtain your sensitive information, and you’d be surprised how many people fall for it. To avoid phishing, never log in to your cryptocurrency exchange unless you are confident that you are on the right site.

Bookmark the link or type in the URL rather than clicking on a link sent to you. Furthermore, do not respond to texts, emails, or chats that request personal information. Finally, always double-check the details before sending any payments.

Also Read: How to Secure Your Accounts on Crypto Exchanges? Here’s The Guide