Cryptocurrencies offer a new and innovative way to store and move money around the world. Though they are not physical, digital currencies exist in the form of records on a computer. A person can possess cryptocurrency on their phone or computer by using an internet connection. There is no need for banks or cashiers because transactions take place anonymously on a peer-to-peer system.
Even though cryptocurrencies are changing the world of currencies, they also present new challenges. The nature of cryptocurrencies is risky because their value can fluctuate wildly.
A study shows that crypto scammers took a record $14 billion in 2021. This is a staggering figure for a technology that has become a multi-billion dollar industry.
Having said that, if you’re stepping into the world of cryptocurrency, you need to understand what you can do to keep the hackers away. There are many ways to keep your cryptocurrency safe, but some of the most important ways can make a huge difference.
In this blog, we will be discussing the sure ways to safeguard your cryptocurrency. But first, let’s understand the nitty-gritty of cryptocurrency and why you should care about its safety.
What Is Cryptocurrency?
A cryptocurrency is a form of digital currency that has no physical form. It uses cryptography to encrypt information to make it secure. It can be used as a decentralized form of payment and has no central authority or bank, which makes it very different from traditional forms of currency.
Cryptocurrencies work on decentralized peer-to-peer networks, where they’re verified by the people participating in the network rather than any one central authority. Since these currencies are not controlled by governments or banks, they are community-driven.
Why Should You Care About Cryptocurrency Safety?
Picture this. One day you’re just checking your email or playing a game when suddenly a window pops up on your screen. It tells you to click a link and install a program because “You’ve been hacked!” The hacker claims they have all of your sensitive information and will release it to the world if you don’t do exactly what they say.
They instruct you to purchase $500 worth of cryptocurrency at a site they provide and send it to their wallet. They also require that you give them your private key so they can access your coins in the future. After doing so, they send you an email telling you that all of your information is safe and will only be released if you don’t follow their instructions to send them another $500.
This sounds horrifying, right? This is why exactly you need to care about cryptocurrency safety.
The 9 Best Ways to Keep Your Cryptocurrency Safe
1. Use a Hardware Wallet
With many people investing large amounts of money in crypto, it is important to protect these investments by storing them safely offline. One way to do this is with a hardware wallet.
Hardware wallets are physical devices that store cryptocurrency offline and securely for those who are concerned about losing their cryptocurrencies due to theft or hacking. These small devices can be bought or built and can connect with any computer via USB or Bluetooth with no internet access required.
2. Pick a Cold Storage Wallet
If you are invested in cryptocurrency or want to get started, it is important to keep your virtual currency safe and secure. With the rise and fall of cryptocurrencies, there has been a lot of interest in how people store their cryptocurrencies.
Cold storage wallets offer some protection against hacking because they allow users to store their private key on an offline system while still being able to make transactions.
3. Keep Your Private Keys Safe
Cryptocurrency uses embedded cryptography, which requires sophisticated computer power to break in order to maintain its security.
Cryptocurrency can be compromised if someone gains access to your private keys, which are needed to spend or transfer your funds. Therefore, you must keep your private keys safe. Store private keys in a physical location that is not connected to the internet.
4. Choose a Strong Password for Your Wallets
One of my friends recently asked me for advice on how he should go about securing his Bitcoin and cryptocurrency wallets. The first thing I recommend is using a strong password to protect your wallets.
Try using something unique such as your birthday with special characters or something similar. By using a unique password that is hard to crack, you can make sure your digital assets are safe even if someone manages to get into your account.
5. Use a Multi-Sig and Two-Factor Authentication
Cryptocurrency is a valuable asset. And with the increasing popularity of these virtual currencies, you are more at risk than ever before of someone trying to hack your account. One way to protect yourself is through multi-sig and two-factor authentication.
This type of authentication sends a text message or phone call that will be required in addition to your password for access. If you have access to a mobile device with an internet connection, this is where most people will turn.
6. Be Careful About Which Cryptocurrency You Store in Which Wallets
Now might be a good time to look into investing some money into cryptocurrencies such as Bitcoin (BTC) or Ethereum (ETH). However, you should consider more than just your checking account when it comes to where you are storing your money.
There are many different types of wallets that you can use to store your cryptocurrencies, and each one is more secure than the last. It is important to be careful which cryptocurrency you store in which wallet so that criminals cannot steal them from you.
7. Hide Your Cryptocurrency in a Paper Wallet
The rising popularity of cryptocurrencies has seen a rapid increase in the number of people looking to invest. One way that people are keeping their cryptocurrency safe is by transferring it into a paper wallet– which can be used as a physical wallet for storing your funds.
Paper wallet refers to a secure way of storing cryptocurrency offline. With a paper wallet for cryptocurrencies, you can keep digital currencies offline, so they do not get stolen from your computer.
8. Make Sure to Create Backups of All of Your Private Keys
Losing your private key for a cryptocurrency of any kind is the end of your investment. It’s a devastating feeling to be invested in a new currency and has all of your funds stolen by an unknown hacker.
You can prevent this from happening with a little bit of effort and know-how. I recommend writing down the private key on paper and storing it in a safe place, as well as backing up your private key digitally.
9. Learn to Spot Phishing Scams
Phishing scams are becoming more common as cryptocurrency becomes more mainstream. Fraudsters are finding new ways to steal personal information and money by using the lure of cryptocurrencies to bait their victims into giving up sensitive information.
The fraudsters then steal your identity and use it to make fraudulent transactions on your behalf. To safeguard your cryptocurrency, you need to be cautious about these scams.
Are Cryptocurrencies Safe to Invest In?
There is a myriad of cryptocurrencies available today, and many people are considering investing in them. The internet is full of stories of people becoming billionaires overnight, but there are also reports of people losing everything. Regardless, there is no denying that the potential for exponential growth exists.
For those who are considering investing in cryptocurrencies, it is important to know the risks involved. Once you gauge everything you need to know about cryptocurrency well, you will be able to figure out that there are some top cryptocurrencies that are actually worth and secure investing in.
Also, read our guide titled “How to Safely Invest in Cryptocurrency” to know more about investing in crypto safely and securely.
Which Cryptocurrency Is the Safest?
A cryptocurrency is a form of digital currency that can be traded online. While some are safer than others, there are no guarantees when it comes to this relatively new form of currency. The safest cryptocurrency may be the one you are most familiar with.
The cryptocurrency that has stood the test of time is Bitcoin. It has stood the test since its launch in 2009 and continues to do so today. Bitcoin tends to be the least volatile of the cryptocurrencies in the market today.
However, it has some of the largest daily movements over the short term. It is important to realize that Bitcoin prices are very sensitive to any news or rumors that may be floating around in the community.
How to Safeguard Your Cryptocurrency: Closing Thoughts
Keeping your cryptocurrency safe is a big deal. There are many ways to do this, but you need to be vigilant with all of them. As I mentioned in this post—using a hardware wallet, keeping private keys safe, choosing a strong password for your wallet, and creating backups of all the private keys associated with your cryptocurrency holdings are some proven ways to safeguard cryptocurrency.
I know there are more ways out there that people use to protect their crypto, but these tried-and-tested methods should give you some peace of mind as well as help ensure that if anything does happen in the future, it will be easier for us or someone else who knows what they’re doing to overcome.
Have any other suggestions? Do you know other ways to secure cryptocurrency? Share with us!