If we've learned nothing throughout 2022, it's that you need to protect your crypto and keep it as safe as possible. Multiple exchanges have been hacked or gone bankrupt this year. That doesn't mean crypto isn't here for the long haul, but it does mean you need to be diligent about keeping your crypto secured.
How can you beef up protection for your crypto? Keep reading, and we'll tell you what you need to know to secure your crypto.
Cryptocurrency exchanges store millions of dollars at a time, making them easy targets for hackers. You can avoid these scams by simply moving your money off the exchange. You can do that in a number of ways. You can move your money to a non-custodial wallet, a hardware wallet, or you can convert it to fiat currency.
Withdrawing your crypto requires some sort of wallet software. You can download crypto wallets to your computer or mobile device and transfer your assets there, or you can purchase a hardware wallet, which is a physical cold storage device.
Once you set up your crypto wallet, simply enter the wallet address to send your crypto from the exchange to your external wallet. Now it's safe from any attacker who may be targeting the exchange.
Two-factor authentication is a lot more common than it used to be, and many people use it to secure nearly everything online, from email accounts and bank accounts to medical records and payment methods. All the more reason you should be doing the same with your crypto accounts.
This is one of the easiest things to set up. Thwart attacks in seconds by making sure you're purchasing your crypto safely. You can set up 2FA when you make your first purchases, meaning you don't have to do it later, and your crypto is instantly safer.
You can also set up 2FA for digital wallets and hardware wallets, so you don't have to leave your crypto on an exchange to use this security measure.
If you set up 2FA, using an authenticator app like Google Authenticator will keep your crypto even more secure. The great thing about authenticator apps like this one is that they don't use SMS to send any codes. So even if the hacker transfers your phone service to themselves, they won't have access to your crypto assets.
So you've downloaded the wallet software or purchased a hardware wallet, and you're working on setting it up. For many beginners, being confronted with private keys or long key phrases is confusing. When they tell you to back up your private keys or seed phrases, they aren't making a suggestion. You should do it.
It can be time-consuming but don't skip this step. It's critical for the safety of your crypto. Store your private keys on a physical piece of paper that you cannot lose and put it where it cannot be destroyed, like a waterproof, fireproof safe or a safety deposit box. You can even write it down in multiple places and keep them hidden separately.
Don't screenshot it, either. If anyone ever had access to your PC, all they would have to do is retrieve the file with your private keys in it, and they would have access to everything. While there will be a copy of your keywords in a key vault file, this file is encrypted, so you don't have to enter your keywords every time you make a transaction.
By storing these private keys elsewhere, even if your computer crashes or your cloud storage gets wiped, you'll still have access to them to recover your wallet. Making the mistake of not backing up your private key means you will lose all of your assets the second you lose your private keys.
Anyone who has been using computers for a while understands the importance of having a strong password. It's even more important for your crypto wallets. If an attacker gains access to your computer, they shouldn't be able to recover your password, as long as it's a good one.
The longer your password is, the harder it will be to crack. Use a combination of lowercase and uppercase letters, numbers, and symbols. These could take several years to crack, making them practically impossible to hack without spending millions of dollars.
Okay, so you already use strong passwords. Great! But you should be using a completely different password for your crypto wallet. You can't just use the same password for your crypto wallet that you use for your online accounts. If there's a website breach and someone gets ahold of your password, it may lead them to your device.
It's bad enough to have a website password compromised, but when it leads to your own wallet, you'll feel pretty unlucky. Your digital wallet password must be unique.
Don't try to access your crypto using public WiFi networks. It's too easy to intercept internet traffic on shared networks, meaning that attackers can see what you're doing, making you a tempting target if you're conducting transactions on crypto exchanges.
In addition to avoiding these public networks, investing in a VPN service is a great way to hide your VPN and keep your online activity private.
There are a number of benefits and risks associated with keeping all of your crypto in one place. It's a convenient option. It can save you time and transaction fees, not to mention making it easier to track your portfolio.
However, security practices would say you shouldn't do it this way because if you do get hacked, all of your crypto is gone in a matter of seconds. In addition, if you forget your private key or password, you can't recover anything.
Keeping your crypto on a hardware wallet or a non-custodial wallet is much safer than keeping it on a crypto exchange account. There's nothing wrong with performing cryptocurrency transactions connected to the internet, but when it comes to cryptocurrency storage, it's much better to store your cryptocurrency safely away from an exchange.
If you lose access to your online wallets, you can simply unlock them using your seed phrase, so long as you store it in a safe location. A seed phrase is a group of 12 or 24 words the user receives during setup. These words need to be entered in a specific order to recover your wallet and the funds within. The same goes for cold hardware wallets. If you've forgotten your password, you can use the seed phrase to gain access to your device.
However, if you physically lose your cold hardware wallet, it's impossible to recover the crypto on it unless you find the device. This isn't the case with wallet software. You can't physically lose them, but you can lose access completely if you don't store your password, private keys, or seed phrases correctly.
Your crypto isn't stored on your mobile device itself. All crypto transactions are recorded on the blockchain. So, even if you lose your phone, you can still recover the crypto in your wallet by entering your password or the recovery seed phrase.
One of the best ways you can keep your Bitcoin safe is to use a non-custodial wallet. The great news is, Bitcoin Depot offers one! It's built right into our app, available on both the iOS and Android app stores. When you use a non-custodial wallet, your funds belong to you. You're in complete control of them, so they can't be held hostage, liquidated, or moved by someone else.
Head over to the Bitcoin Depot app to learn more!