Did you know that Bitcoin owners have misplaced an estimated 20% of these digital tokens? Unfortunately, these lost digital assets are most likely no longer recoverable.
So if you plan to buy cryptocurrencies this 2023, too, it’s best you learn about crypto security. Otherwise, you can lose your digital assets by misplacing your keys or through theft.
This beginner’s guide will teach you how to secure and safeguard crypto, so read on.
Use a Cold Cryptocurrency Wallet
You need a cryptocurrency wallet to access your crypto holdings. It also stores your public and private keys.
Many agree that the most secure crypto wallet is a cold wallet, as it doesn’t need to be online, unlike a hot one. The less time it’s online, the less of a target it becomes to hackers and cybercriminals.
A cold wallet can be physical hardware, such as a USB or a hard drive, or a piece of paper where you write down your keys.
While a cold wallet may give the highest level of crypto security, this still depends on how you protect it. For instance, if you misplace or damage a paper wallet, you may no longer be able to access your digital assets.
To improve your cold crypto wallet security, store it in a safe and secure environment, such as a bank vault.
Create Seed Phrase Backups
Also known as a recovery phrase, a seed phrase is like a master key. It can unlock your crypto wallet if you lose your primary private key. You can use it to regain access to the digital tokens you have in your wallet.
So if you misplace or fail to remember your seed phrase, too, you may no longer be able to access your digital assets. It’s easy to forget, considering it can contain 12, 18, or 24 random words.
While that makes it highly secure, it also creates a difficult-to-remember phrase. It can be even more challenging if you have at least 20 other passwords, which 37% of people do.
To prevent that, create seed phrase backups and keep them in tamper-proof metal plates. Then, like your cold wallets, store them in a secure location like a bank vault.
Consider Custodial Services
If you’re unsure you can safeguard your private keys, go with custodial services.
Custodial services are third-party companies that manage their clients’ crypto holdings. Their services include safe cryptocurrency storage, including private keys.
Crypto custodians are institutions regulated by a government body. Thus, they must abide by laws and regulations on securing their clients’ assets.
However, you should still do your due diligence when selecting a custodial service. For example, the digital asset custody company should use highly secure cold wallets. This often means utilizing multi-signature wallets.
Multi-signature technology makes hacking challenging as it requires more than one private key. Accessing the account is impossible without providing all the needed keys.
Always Prioritize Crypto Security
With Bitcoin forecasted to hit an all-time high this 2023, crypto security is more vital than ever. Without it, you risk losing your assets, whether through your own doing or by criminals.
So, consider following our tips, such as using a cold wallet and creating seed phrase backups. But if you’re wary of protecting your assets and keys on your own, relegate the task to a custodian.
Ready for more cryptocurrency tips and tricks? Then be sure to check out our guide on the main types of crypto you should know of!
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