Published On: Fri, Jul 26th, 2019

Securing Your Cryptocurrency Wallet

When we’re out there trading, security is always priority numero-uno. We need to know that our funds are safe in our bitcoin wallet or else we’d be in constant panic.

Whether we like it or not, cryptocurrency trading isn’t the safest thing. To prevent any sort of scam or hack, we have to be very careful. There are real risks out there for cryptocurrency enthusiasts like ourselves but luckily, there are a few guidelines we can follow to stay as safe as possible.

Setting a strong password

The first layer of defense for your account is your password. If you have a simple or easy-to-guess password, you’re putting your entire account (as well as your funds) at risk. When setting a password, be sure to use capital letters, numbers, and symbols. Make sure that your password is something only you would know. Also, do not use the same password for all your accounts—make sure that each account has a different password for maximum security.

photo/ The World Spectrum

Enable 2-Factor-Authentication

If setting a strong password is your first layer of defense, enabling 2-Factor-Authentication (2FA) is a way for you to add an extra layer of defense. Once you enable 2FA, you’ll have to verify yourself via email or SMS before logging into your account and before sending any funds out of your account. 

Verify your account

If it’s possible to verify your account, you should definitely consider doing it. By verifying your identity on exchanges, you’ll have a safer trading experience because moderators of exchanges will side with verified users as opposed to ones that are unverified. Not only that, but there are also a number of perks that come with being a verified user (depending on the exchange).

Personal information

Make sure that you do not give out any kind of personal information when trading on cryptocurrency exchanges. By giving any personal information out, you allow hackers to get even closer to gaining access to your code. Only give what’s absolutely necessary.  

This rule especially applies to those that use a peer-to-peer bitcoin marketplace.

Choose the right wallet for your trading style

Not all people are aware of this, but there are specific wallets that cater to specific trading styles. If you’re unfamiliar with the different kinds of wallets, I’ll give you a quick rundown.

First of all, there are two main kinds of wallets—hot wallets and cold wallets. Hot wallets are wallets that are always connected to the internet. Cold wallets, although most have the function to connect to the Internet, mostly remain offline. From there, we can delve even deeper to the different kinds of hot wallets and different kinds of cold wallets.

Hot wallets:

  • Desktop wallets – These are applications that can be downloaded and installed onto your personal computer or laptop. 
  • Web wallets – These are wallets that are accessible via internet browsers. These wallets are usually given away for free when you register on a crypto exchange. 
  • Mobile wallets – These are downloadable applications for your smartphone. These allow you to check the status of your funds from virtually anywhere.

Cold wallets:

  • Hardware wallets – These are small physical devices that looks like a USB with a small OLED screen and side buttons to help you navigate through the device.
  • Paper wallets – These are literal pieces of paper that hold your public addresses and private keys. 

As you can see, there are several kinds of wallets to choose from. Depending on your trading style, you’ll have to choose the right one for you.

For example, if you’re the type of trader that likes to hold a lot of cryptocurrency at a time, a hardware wallet would be recommended. Although they can be a little bit expensive to acquire, hardware wallets are the most secure wallets out there.

Paper wallets can be considered as a cheaper alternative to hardware wallets. However, due to the nature of paper wallets, traders aren’t allowed to withdraw a fraction from a paper wallet. It’s either they withdraw the whole thing or they don’t withdraw at all. This makes it ideal for HODLers who hold for long periods of time.

Web wallets, despite the risk of always being connected to the internet, are ideal for newbies who are just starting to get the hang of trading. They’re also ideal for people who are testing out new cryptocurrency exchanges. 

Stay calm

As you can see, there are a lot of variables to keeping your crypto wallet safe but there’s one thing that you should always do—always be aware. It’s very important to always be cautious while trading. Make sure that you do all the necessary research before you start investing. Take note of what you’re investing in and who you’re investing with. In cases like this, it’s ok to be paranoid and nitpick. It’ll help you spot any potential red flags. 

When it comes to cryptocurrency, knowledge is power. Never underestimate the power of well-done research. It’ll help keep you safe, it’ll make you more aware, but most importantly, it’ll minimize the risk of trading ten-fold. There are a lot of communities, forums, and websites you can pull knowledge from. Make sure that you take advantage of the resources at your disposal and you should have nothing to worry about.

Author: Iggi Vargas

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