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Long-time crypto investors have already figured out some great ways to protect their crypto assets. But if you’re making your tentative steps in the world of crypto, you’re yet to discover the workable methods that can help you stay safe while investing in cryptocurrency.
Safeguarding your Bitcoin or any other crypto you have mined, purchased, or traded can be a tricky task these days, especially if you don’t know where to start. We suggest that you start simply! Below are some great recommendations that will help you learn the ropes of protecting your crypto.
Find a Secure Crypto Exchange
Unlike your physical money, which can be put and stored in your wallet or bank account, your digital gold should be kept in a dedicated place, which serves as an online storage for users’ cryptocurrencies. These places are called crypto exchanges.
Just like any stock exchange, crypto exchanges enable you to invest in a specific asset, e.g., Bitcoin, Ethereum, or Cordano, and perform a host of other financial operations with your crypto assets. You can place orders for certain cryptocurrencies, sell your coins whenever you see fit, and much more. What’s also great is that you can use your chosen crypto exchange as a temporary storage for your digital wealth. Therefore, it’s highly important that you pick a trustworthy and legitimate exchange that utilizes anti-hacking software and employs additional precautionary measures to ensure the safety and security of your crypto funds. And the same goes for your crypto payment provider and other services you use to purchase tokens and receive crypto payments.
The best exchange has a reimbursement policy in place, which implies paying compensation to all crypto holders on the off chance of it being hacked. However, since all reputable exchanges tend to store large amounts of crypto on their cold wallets, this allows for minimizing potential losses in case of a major hack attack.
Create a Strong Password
It would be unwise to rely solely on your exchange if you want to achieve optimal protection against hackers, fishing attacks, and other threats the online world is replete with. It’s your responsibility to make sure nobody can steal your identity and access your exchange account. For this, you want to keep your credentials safe and never share your sensitive information with third-party users. It’s also of paramount importance that you come up with a strong password. Ideally, it should contain digits, acceptable symbols, letters, both lower- and uppercase, and be long enough. This way, you’ll make it more challenging for a hacker to crack your password and get their hands on your hard-earned money.
Take Advantage of 2FA
You can hardly find a single seasoned crypto investor who doesn’t use two-factor authentication (2FA) these days. The onus is on you to take all available safety measures to stave off hacker attacks and safeguard your sensitive data. And therefore, it’s necessary that you avail yourself of the additional layer of online security offered by 2FA.
Once you enable this feature, you’ll be required to prove your identity through a couple of channels. This means that you won’t need to rely on the strength of your password alone. Thus, in addition to typing in your password, you’ll need to take an extra step, like entering a unique code sent to your phone, providing a security token or biometrics, etc. This process goes a long way toward enhancing your data privacy and providing robust and consistent protection against unauthorized access.
Use Cold Crypto Wallets if Storing Large Amounts
While storing your crypto right on your favorite exchange might seem like a handy and convenient option, you still would be well-advised to consider investing in a more reliable and robust storage option like a cold crypto wallet. If you intend to hold your digital gold for the long haul, a cold crypto wallet can act as a safe and highly protected vault for it.
Unlike their hot counterparts, which are downloaded from dedicated websites and require an Internet connection, cold wallets enable you to store a lot of different cryptos in a single place offline. They boast increased access security and give you more control over your private keys and crypto possessions. They are virtually impossible to compromise or hack simply because they don’t need to be connected to the Internet to securely store your assets.
That said, cold wallets might not be a convenient solution for those users who don’t hold large amounts of crypto or tend to trade all their tokens on a regular basis. In such a case, consider opting for a hot crypto wallet, which is a more flexible and convenient option for having small amounts of crypto at your disposal.