Can you imagine waking up one day to find all the crypto that you worked so hard for, gone? All the work you’ve done HODLing, dollar cost averaging in, and being disciplined and sticking to your plan, all for nothing? With the popularity of cryptocurrencies growing and the mass adoption accelerating massively, it is becoming more and more crucial to learn the best way to keep your crypto safe.
Unfortunately, the reality is that as much as you are working hard to build your wealth, there are also people working hard to take it from you. You cannot afford to sleep on this very vital part of your investing. Take some time out of your busy schedule and go through all your activities online, and make adjustments, take precautionary measures, and assess and modify. This will save you a ton of pain in the future. Never take it for granted and think it’ll never happen to you.
The best way to keep your crypto safe is ultimately following the tips outlined below. Protecting your crypto and storing it safely is your responsibility, and yours alone. This list is by no means exhaustive, these are just some of the measures you can execute right now to make sure your crypto is safe and protected from hackers. The general thumb rule then will be, the more boxes you tick the better protected you are.
Best Way to Keep Your Crypto Safe
1. Choose a Secure Non-Custodial Wallet
A non-custodial wallet is a decentralized wallet, where you are in control of your private keys. You are in control. This is a better option as opposed to a custodial wallet, where a third party controls your private keys. An example of a 3rd party would be Binance, Coinbase, PayPayl, Gemini, LUNO, etc. These are all exchanges which enable you to store your crypto on their wallets. You are not in control.
There are many options to store your cryptocurrency on a secure non-custodial wallet, such examples include Exodus, Jaxx, Bread, etc. Here, you have full control of your private keys. This article on 4 best bitcoin wallet apps may help you make a decision as to which one to go for. Like the common saying goes in crypto: Not your keys, not your coin.
2. Use a Unique and Strong Password For Different Accounts
As you get involved in crypto, and in the online space in general, you begin to have lots of accounts from different platforms. It is tempting to use the same password for more than one platform, especially passwords that are easier to remember and that we are used to. This is very dangerous, definitely not the best way to keep your crypto safe. You should never use the same password twice. Write it down somewhere safe, on a piece of paper etc.
Over and above that, you must use a strong password. It must contain upper and lower cases, characters and numbers. The longer and the stronger your password, the more difficult it would be to hack into your account. Do not use passwords that would be easy to guess, like your “Name+123”, or your “Name+your age”. These are too simplistic and are a go-to when hackers attempt to hack into your account. Very predictable. What I usually do when creating a password is I start by writing it down first, as complicated as I want it to be, then set the password on the platform.
3. Get a Password Manager
A password manager is a computer program that allows users to store, generate, and manage their passwords for local applications and online services. So not only do you have strong passwords, but you also have a password manager that contains all your passwords. This is very useful and convenient as you have one central way to manage all your passwords, in a secured way.
It can be very hard to remember 20 different difficult passwords for different platforms. There are several password manager applications out there, such as 1Password, Bitwarden, and Dashlane. You get both free and paid versions. So choose the one that best suites your needs.
4. Use 2 Factor Authentication (2FA)
Many wallets/platforms allow you to create a 2 factor authentication. This is essentially a second layer of security, in addition to your password. The idea here is that, even if a hacker manages to figure out your password, they would still not be able to login as they would have to provide a 2FA code. There are several 2FA apps to choose from, the most popular ones are Google Authenticator and Authy. I prefer Authy due to its diverse security features.
I would also stress that, as you attempt to keep your cryptocurrency safe, as a second layer of security, do not use a text message (SMS) to authorize. Your phone can be attacked through what’s called a sim swap attack. Where a hacker can call your network provider and insist on a sim swap, until they change it. They can divert your text messages to the sim card they own in order to authorize access to your account.
5. Encrypting Your e-Wallet
Over and above the 2FA, some wallets allow you to protect your private keys and coins by encrypting them. Encryption enables you to set a unique password to lock your crypto when third-parties attempt to access them. The hacker will not be able to steal your crypto unless they have the password. This serves as a further precaution against cyber attacks.
Not all wallets have this feature, so in your search for the most secure e-Wallet find out if they support this feature.
6. Use a Hardware wallet
The best way to store your crypto is by using a hardware wallet, like a Ledger Nano or Trezor. I personally use a Ledger Nano and find it to be very user friendly and intuitive. A hardware wallet is also known as cold storage. This is because it is not connected to the internet. So the only way to get hold of your private keys would be if it were to get stolen, with the passphrase.
It is worth noting that, your hardware alone getting lost would not lead to your crypto being stolen, although you are more at risk. However, the most important thing to keep safe here is your passphrase.
7. Save your Passphrase/Backup Password
This is usually a 12/24 word password, also known as a mnemonic/seed phrase. Write it down and keep it some place safe. Never give your passphrase to anyone. No official support staff from any website will ever contact you and ask you for your passphrase. The passphrase allows you access to your crypto incase you happen to lose your device or your app/wallet crashes and you need to reset your phone.
Never ever share your passphrase. Write it down. Do not print the passphrase through a WiFi printer, or anything that would be susceptible to cloud capturing. User your personal printer at home, or just write it down on a piece of paper.
8. Use the Multi-Signature Feature
This is taking the security of your assets to the next level. The Multi-signature feature allows you to add other users other than yourself to access your crypto and authorize transactions. Unless all authorized members approve the transaction or login the hacker would not be able to access your funds.
There are many e-Wallets that have this feature, one of which is Electrum. Electrum wallet (desktop and mobile) has been around for a very long time and is very trusted in the crypto space. Other examples include Ledger Nano X, Trezor Model T wallet, Armory, etc.
9. Updating Your Software
Turn on automatic updates so that your wallet can update automatically whenever there is an update available. You want to take advantage of improved security, latest features and bug fixes. By enabling automatic updates you are making sure your device/wallet is always up to date. Also make sure to turn your notifications on so you know when a software update has been carried out on your wallet. How you keep your cryptocurrency safe is entirely dependent on you, so you should leave no stone unturned.
10. Don’t Keep All Your Crypto in One Wallet
As the age old saying goes: “Don’t keep all your eggs in one basket.” This is very true when it comes to the best way to store you crypto. You should have two or more digital wallets that serve different purposes. You can split your funds through 2 different hot wallets, like Exodus and Metamask, and cold storage like Ledger Nano.
So your hot wallets would be for quick trades – in and out of positions, short term holdings and trading. Your cold storage would be for long term holdings, where you don’t touch your crypto once it’s in there. Perform a backup of all your wallets’ private keys and store them offline.
Over and above the safety precautions mentioned above, the following DOs and DON’Ts are equally important when conducting yourself online and may ultimately lead to your keeping your crypto safe, or losing it.
a. Be proactive. Teach your family members, people that may one day need to access your device (s), in case of an emergency or when you are no longer around. Give a set of instructions on how to access it, but mainly on how they should take the same safety measures to make sure they are protected.
b. Take some time out. Take some time off, dedicate it to checking your footprint online. Review your security, check all your accounts, including your email(s). Are the passwords strong enough? Are they unique? Are your accounts protected by a 2FA? Make changes wherever you see fit and change your password regularly too.
c. Take safety measures at home. Make sure your home is safe. Invest in a fireproof safe and store one of your passphrase copies in it. Remember to store your passphrase in different locations. Make two copies, and laminate them so they don’t get damaged.
d. Bookmark the sites. If you use a certain site regularly, like an exchange or any other platform where you store cryptocurrency, you should consider bookmarking the site. That way you can always return to it, with certainty that it is indeed the correct one. This is better than just typing the site on Google and stand a chance to open a scam site or phishing site. Then they record your passwords and before you know it all your assets are gone.
e. Secure Your Devices. Apart from protecting your apps/wallets, make sure your device itself is protected. It takes just one security vulnerability for your mobile, tablet, or PC to be hacked. I would recommend you get yourself a premium antivirus, as well as an antispyware to run frequent checks for malicious software. Set your firewall to maximum security as well. It’s one thing to have a secured wallet, and another to protect the device from which you are accessing that wallet.
a. Click on random links. Phishing, fake messages or emails are a common way for people to get hacked. You might receive a fake sms or email trying to scare you or saying there’s something wrong with your account. This email or text message might contain a link for you to click on. DO NOT click on it. They are trying to steal your details.
b. Copy and paste. Most browsers allow you to copy from clipboard and then paste, and also allow you to save the password so that next time you can login automatically. You never know who can gain access to your device. Low and behold someone gains access to your device and they start login in automatically, through your saved passwords, this can quickly become disastrous.
c. Install random apps on Google Chrome. Always make sure you are getting official links from the respective projects. If you have to install some extension or an app on Google, make sure you are downloading the right one.
d. Download files from strangers. Do not download files from random websites or strangers. You could download malware and therefore infect your device, causing you to lose all your information. Use official websites.
e. Fall for scammers. Again, if it sounds too good to be true, it usually is. Stay away from people promising ridiculous amounts of returns, in a short period of time, without a significant amount as initial input. They might be trying to scam you. These promised returns could range from bitcoin mining, forex trading, crypto trading, etc.
The list above on the best way to keep your crypto safe is by no means exhaustive. As mentioned earlier, the more boxes you tick, the safer you are. If you want to stay safe online and protect your crypto, make sure to take the above actions and do it now. Do not postpone this very important aspect of your investment journey.
What other safety measures do you implement to make sure you keep your crypto safe from hackers? Let us know below.