Keeping Your Cryptocurrencies Safe: Best Security Practices

Securing crypto can feel overwhelming. Attacks on personal wallets and crypto exchanges have been on the increase, thus raising concerns among investors.

If you’re worried about the safety of your investment, you’re not alone. Many investors have fallen victim to crypto thieves of different kinds, but fear not!

We'll reveal top security tips in this guide to help you manage your crypto investment effortlessly and securely.

Why Crypto Security Matters

Cryptocurrencies fall into the category of unregulated digital assets. While this is not entirely bad, it makes investors more prone to losses due to security issues.

Losses can result from anything ranging from sending funds to the wrong address to an attacker hacking your wallet.

Crypto assets therefore need extra caution and attention to security to use safely.

Understanding Wallet Types

There are different types of wallets, and which one you use depends on what you want to get out of the wallet. 

For instance, someone who just wishes to buy and hold assets needs a hardware cold wallet. For an active trader, a hot wallet works better.

Deciding on the device to use — whether mobile or desktop — is another key decision to make depending on your convenience. 

As far as security is concerned though, there are three types of wallets you can choose from.

• Hot Wallets: these are software wallets on your mobile or desktop device that are connected to the internet whenever you’re online. They are easily accessible, but more prone to attacks because attackers can easily reach them. Examples are Exodus and Trust wallets.
   
• Cold Wallets: These are the opposite of hot wallets. They are wallets that are 100% offline and only connected to the internet for transactions. These are great for securing your assets, but they are not readily accessible and non-tech users may find them difficult to use. Examples are Ledger and Trezor hardware wallets.
   
• Paper Wallets: These are technically cold wallets because they offer full offline cold storage. However, they are on paper rather than hardware. The private keys are printed on the paper and kept secure where neither water nor fire can reach it. The downside is that it is more easily damaged than hardware wallets.

Best Practices for Crypto Security

Securing Your Wallet

The wallet is a significant aspect of the crypto journey that needs attention. To secure it, you need to do the following.

• Choose a Secure Crypto Wallet: The wallet you decide to use is critical in ensuring that your assets are secure. You should look for a secure one, which ideally is a hardware wallet, especially if you have a large portfolio.
   
• Regular Wallet Updates: Wallets try to stay ahead of bad actors by updating their software regularly. They usually prompt you to install the latest updates and you should do that regularly, especially if you’re using a hot wallet.
   
• Enabling Two-Factor Authentication: Two-factor authentication (2FA) adds an extra layer of security to your wallet. You should use it and opt for Multi-factor authentication (MFA) if available.
   
• Keeping Your Private Keys Secure: Your private keys give you access to the wallet, as well as anyone who accesses them. Ever heard the saying “not your keys, not your coins”? You should store them securely using hardware or paper wallets and never share them with anyone.

Using Strong Passwords

The issue of securing your wallet has only to do with when you’re managing your own wallet. The need to use strong passwords however applies to whatever you’re using, whether it is a non-custodial wallet, a custodial wallet or an exchange, because they all need to be protected with strong passwords.

You should therefore create a robust password for each of your accounts. This means the password needs to be strong and difficult to guess. Some platforms will give you a format for the wallet 

It is difficult to remember complicated passwords but with the help of password Management Tools such as 1Password, NordPass, etc, you can easily manage any number of passwords securely.

You can enhance the security of passwords by changing them regularly. This makes it more difficult for bad actors to crack your wallet or exchange account.

Recognising and Avoiding Scams

To succeed in your crypto investment journey, you need to quickly identify and avoid crypto scams. These come in different forms, including phishing scams, pumps and dumps, Ponzi schemes etc.

If a crypto project promises you something like a reward or return on investment that sounds too good to be true, it probably is a scam. It can also be a project with no explicit details about its team, or one that isn’t properly audited.

If you have been the victim of a crypto scam before, the first thing to do is to report the project to the appropriate authorities. You should also write a review on the project’s website, on social media, or any other platform you have access to.

Staying Informed

One way you can be safe in the crypto space is to remain in touch with the most recent happenings in the crypto space. 

This way, you’ll get firsthand information on security happenings in the space and make adjustments to avoid falling into a trap.

You should follow reputable sources of such information such as the wallets or exchanges you use. They will always provide information on any potential security challenges and how you can prevent them. 

You should also join crypto communities on social media like Twitter, Discord, Facebook, etc where security information is easily circulated. 

Conclusion and Final Tips

Crypto investing is risky as the assets are volatile, and security concerns are also sky-high because of the unregulated nature of the industry.

To stay safe, you need to take deliberate steps like choosing the right wallet and securing it, as well as using strong passwords, two-factor authentication, watching out for crypto scams and avoiding them, as well as being vigilant. 

Finally, whatever you do, do not share your account information with anyone because they can access your assets with such information.