Introduction
Over the years, cryptocurrencies have transformed a major part of the financial sector. It has opened new opportunities as it introduced a better world of digital finance. However, while this change comes with advantages, it's not without flaws and risks that you should look out for. A key drawback is its vulnerability to online threats where unlike traditional currencies that are stored in banks and physical wallets, these digital currencies exist entirely online. To protect your assets, it's important to know how to safely store your cryptocurrency.
Despite blockchain technology providing an enhanced level of security, the fact that it all exists online makes cryptocurrencies vulnerable to cyberattacks, scam, and theft. Thus, instead of solely relying on blockchain, you as a user, should also take some steps to protect your digital assets. To help, in this guide, we will walk you through some simple yet very effective ways to store your cryptos safely.
Effective Methods to Keep Your Cryptocurrency Safe
Everyone starts as a beginner, thus, there's always room for learning and adjusting, especially when it comes to securing your digital assets. For your first step, here are some beginner-friendly practices to help you store your crypto safely:
Use cold storage for long-term security
Cold storages are also known as hardware wallets in the world of cryptocurrencies. This pertains to a physical device where your funds are stored offline, making it among the safest ways to keep your cryptos secure. Since these wallets are not connected to the internet, it's protected from online threats such as hacking and phishing. If you don't plan to use your cryptos frequently or for everyday transactions, cold storage is the perfect option you should consider as a long-term holder.
However, while it keeps your cryptos unexposed to risks and offers superior security, it also has drawbacks. Since it's not connected online, it also means your access to your funds can be limited and hassle. If you will use it for a transaction, you'll have to connect your crypto back to the internet, which takes time and effort. Second, if you lose your hardware wallet, your assets may be lost forever since there's no central authority to help recover your private keys.
Enable two-factor authentication
This is an optional security method that will help in adding an extra layer of security to your cryptocurrency accounts. Through this method, you will be required to provide at least two forms of identification to verify your logins before you can go through your account. It could either be another password, a code which will be sent on your current mobile number, or generated through an authentication app. In addition to these steps, setting up a crypto wallet can also provide another layer of security. If you're not sure how to do this, you can check out this Beginner's Guide To Setting Up Crypto Wallet. Thus, regardless if someone manages to steal your password, they won't still be able to go through your account that easily since they will encounter another security measure.
By enabling 2FA, you will be reducing the chances of unauthorized transactions. However, if you're a beginner you may find the setting up process to be tricky and hassle which may confuse you at some point. But, generally, as long as you follow the steps which will be provided as you go through the process, it's very straightforward, as long as you have the required information. Another drawback is that when you lose access to the device that's linked to your 2FA method, you would end up locked out from your accounts.
Encrypt your data for extra protection
Encryption may not be for beginners but taking the time to learn and understand the process can be a key advantage in keeping your cryptocurrencies extra secure. Furthermore, encryption is a powerful tool that protects data, it works by transforming your sensitive information into an unreadable format which can only be accessed by a decryption key or password. This means, it doesn't matter if your device or wallet file is compromised, as long as they won't be able to provide the decryption key, they won't be able to view your crypto information.
While it sounds very promising, it's complex as well. As mentioned, encryption isn't a beginner-friendly method. In fact, it requires knowledge about technicalities for it to be set up properly. While you can use sources to guide you step-by-step, it can still be challenging and you may encounter a risk of losing access to your data if you forget the encryption password. Lastly, encryption may also cause lags to your device, most especially if it does not meet the system specifications.
Stay informed
The world of cryptocurrencies can be overwhelming, while navigating the landscape can be exciting and rewarding, you shouldn't only focus on the goal of earning. Instead, invest more time on understanding and learning valuable things about crypto that you can benefit for long-term. This includes knowing how to keep your digital currencies secure. Always stay ahead from potential threats and other forms of attacks knowing that it's very rampant in the online world.
Conclusion
Cryptocurrencies aren't all about the exciting possibilities, while it's what most of us look forward to, it's important to consider that there are risks along the way that should be approached carefully. Furthermore, these tips will serve as your guide as you take on the challenges in navigating the world of crypto. Keep in mind that the more proactive you are about securing your investments, the less likely you are to fall victim to cyber threats.
