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Learn how to secure your crypto wallets properly

How to Secure Your Cryptocurrency

Last Updated: July 25, 2022
Crypto is a hot topic, and the number of crypto theft has been increasing over the years. Not only the ordinary people who got their crypto stolen, but even crypto exchanges as well like Binance and others, have become victims of crypto cybercriminals in the past. So, how to secure your cryptocurrency from prying eyes? And how important is it to pay attention to security issues? 

Well, this article will give you security tips on how to protect yourself against all the possible threats to your cryptocurrency security – whether you’re using popular browser-based applications or mobile wallet applications, or even hardware wallets, you have come to the right place for the tips.

Identifying And Categorizing Problems With Cryptocurrency Security

First of all, we need to be able to define the categories of crypto theft. Not all of them are equal, and you shouldn’t need to worry about everything. The biggest crypto theft stories usually involved the likes of crypto exchanges (think of Mt. Gox) or loopholes in smart contracts (think of Compound or Wormhole).

Obviously, just because you have no control over what’s happening in the crypto exchange industry or smart contract applications, it doesn’t mean you should completely ignore them. It’s actually the opposite. You should pay attention to them, so you know which one to avoid by analyzing how the previous hacks or thefts happened.

And then, there are certain practices you need to learn to enhance your own personal crypto wallet security. Once again, these practices are separate issues from all the big thefts that have happened to big crypto exchanges and smart contracts.

Let’s break down one by one all the most important tips regarding how to secure your cryptocurrency wallet.

Not Your Keys, Not Your Coins

always store your crypto in your own wallet where you have full control of its backup phrase
First and foremost, if you plan to invest in crypto long term, you must understand the phrase “not your keys, not your coins.” It is a popular phrase that means you should always store your cryptocurrencies within your own non-custodial crypto wallets.

Unlike centralized cryptocurrency exchanges (CEX-es) where they control the private keys to your account wallet address, non-custodial wallets give full control to the users.

Centralized exchanges sometimes work like traditional banks where a massive amount of cryptocurrencies that they hold are loaned out to other businesses (fractional reserve banking). That’s why whenever something bad happens (such as a hacking incident or massive bear market), they might pause user withdrawal to avoid the equivalent of a bank run but in crypto.

So, if you believe BTC or ETH prices can go up within a few years from now, you should not hold your cryptocurrencies in any exchange. Always use your own wallet address where you can control your own private keys (such as Metamask or Trust Wallet or even hardware wallet like Ledger).

Store Your 12-Word or 24-Word Backup Phrase And Private Keys Outside Your Main Devices

The best examples of non-custodial crypto wallets are Exodus, Metamask, Lead Wallet, MyEtherWallet, or hardware wallets like Trezor and Ledger. When you use these wallet applications, you will be asked to write down a 12-word or 24-word backup phrase. 

These backup phrases must never be told to anybody because they can access and move your cryptocurrencies once they find out your 12-word or 24-word backup phrase.

You have to think of these backup phrases as equivalent to the master key to your house. You simply don’t want to give it to anybody, whatever the circumstance is. There are many phishing attacks where the criminals will try to trick you into giving them your backup phrases. Never fall for them. 

The best idea is to write down your backup phrases on a piece of paper and keep that piece of paper safe somewhere inside a safety box or something in your house. 

Why? Because in case your computer or phone gets compromised, a remote hacker still won’t be able to access your backup phrases. And you can just restore your backup phrases elsewhere (i.e., your second laptop) and quickly transfer out your crypto to a new wallet address.

With certain cryptocurrencies like Ethereum or BNB, you might as well want to write down the private keys to your wallet address. They work like backup phrases. You can restore it elsewhere and gain full access to your wallet.

Use Hardware Wallet For Extra Security

ledger and trezor are your best bets
Another super important feature you can use for extra security is a hardware wallet. The most popular hardware wallets out there are Ledger and Trezor. Basically, they work like USB flash drives, where you have to confirm every outgoing transaction with the physical hardware buttons. 

This is very important because there are cases where hackers install fake metamask apps on the victims’ computers. But when you use a hardware wallet, the device will always reconfirm the recipient address, and you have to press the physical button on the device before the transaction can be broadcasted to the blockchain. 

So, in the case your computer gets compromised, you would notice the recipient address is different from an outgoing transaction (which you can just reject the transaction).

Another important security feature that hardware wallets provide is the fact that they never store your private key outside the hardware itself. This is very good for extra peace of mind.

Don’t Click Suspicious Links Or Use Unsecured WiFi

In the digital era like today, you must be extra careful with suspicious links. Many criminals, especially on Telegram and Twitter, put links to try to trick the victims. When you click them, you might be susceptible to potential malware or phishing.

Another important trick is to never use public WiFi (i.e., at the airport) whenever you want to make crypto transactions. You can always switch to your mobile network just for the crypto transaction itself. Also make sure you use a VPN when you are connected to public WiFi.

Use 2FA For Any Email And Crypto-Related Accounts

always activate 2FA for every account you have
While you should always move your cryptocurrencies to your own non-custodial crypto wallet, sometimes it’s hard to avoid making transactions in centralized exchanges.

At the end of the day, we still need them for fiat on/off ramps. In order to maximize security with your exchange account or basically anything crypto-related, you should always activate 2FA (2 Factor Authentication).

Personally, I recommend you to use Authy since you can use multiple devices for the 2FA codes. Also, make sure you have multiple email addresses for different crypto-related accounts and exchanges.

Final Thoughts

If you follow all the above tips, your chance of getting “hacked” or losing your crypto can be minimized. Your cryptocurrency wallet will be much more secure.

The most important things are to make sure you write down your backup phrases and private keys outside your own devices (such as on a piece of paper) and never ever tell those backups to anybody.
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