The Ultimate Guide To Bitcoin And Crypto Wallet Security

Security is one of the most prominent promises of blockchain-based technology and cryptocurrencies. However, we've seen hundreds of reports in recent years of investors and traders losing their valuable crypto savings for a variety of reasons. There are numerous ways for bad actors to attack and potentially steal your savings, including improper private key management, hacked exchanges, and phishing scams.

You are your own bank in Bitcoin and cryptocurrency. However, unlike traditional banking, the main disadvantage is that once digital currencies leave your wallet, there is almost always no way to get them back. There is no coverage. This is why it is critical to take every precaution to ensure the safety of your cryptocurrency holdings.

Tips For Securing Bitcoin and Crypto Wallets

Your cryptocurrencies are only as safe as your wallet.

Users must understand that the threat to their cryptocurrency comes not from the blockchain, but from their wallet or exchange. At the provider level, information, including your private key, can be tracked and stored. Hackers can then gain access to this information and steal your savings. 

The competition between different digital wallets is increasing as the number of people using cryptocurrencies grows.

This is why it is critical for users to be extremely picky about the wallets they use. As a general rule, you should only use cryptocurrency wallets created by reputable companies with a track record. For more information, see our trusted crypto wallets guide or the seven best non-custodial crypto wallets.

However, once you've done that, there are numerous steps you can take to ensure the safety of your Bitcoin and other cryptocurrencies. Here are nine pointers you must know and follow.

Use Cold Storage as well: Don't Put All Your Eggs in One Basket

This is not only a good investment practice, but it is also a good security practice. Even if you use hot or cold storage, you should never keep your entire cryptocurrency stack in a single wallet.

The best way to go about it is to use multiple cryptocurrency wallets and distribute your savings in such a way that if one of them is compromised, you won't suffer as much.

It is strongly advised to use cold storage devices. Because these wallets are not connected to the internet, they are nearly impossible to hack unless you fall victim to a phishing scam, which is also covered below. 

Service Security

In continuation of the preceding, it is critical to remove your cryptocurrency from a device that requires maintenance. This could include software and hardware updates, among other things.

You should never leave your device unattended, and you should never lend it to anyone. Even if the person to whom you give the device is a trusted party, they may inadvertently do something to it that compromises its security, whether intended or not.

Protect Your Wallets

As a general rule, keep your wallet's private keys offline at all times. Hackers cannot access them this way. It is also critical to have backups of these private keys, which should be kept offline.

Furthermore, it is strongly advised that you keep a backup of your keys outside of your home as well - this way, you will have access to them in the event of an incident such as a fire, earthquake, or anything else that may jeopardise the integrity of your home.

Although it may seem surprising, your bank's safe is a good place to keep your private key. Of course, this is only a backup; you should always have access to your private keys whenever you want.

Avoid Phishing Scams

Phishing scams have grown in popularity in recent years as more people become involved in the cryptocurrency field.

There are numerous ways for someone to compromise your device's security, including fake Google, Facebook, and YouTube ads, fake applications incorrectly uploaded to the App Store and the Google Play Store, phishing domains that mimic popular and existing websites, and so on.

Check the Destination Address Again

One of the difficulties that cryptocurrency users face is that if the address is incorrect, the funds may be lost indefinitely with no way of recovering them.

As a result, you should always double-check the address to which you send any payment transaction. Malicious programmes can also modify a simple "copy and paste" procedure so that you end up pasting a different address that belongs to the bad actor.

A common way to ensure the security of your transfer is to send a micropayment first, followed by the entire amount.

Keep Your Assets Private

There's an old adage in the cryptocurrency world about the $5 wrench attack. This means that someone can threaten your health or life with a $5 wrench from most stores and trick you into giving him your private keys.

While you can use technologies such as multi-signature wallets and so on, in most cases, the attacker will not care.

This is why it is critical that you never brag or flaunt your cryptocurrency holdings to anyone. Nobody needs to know how many bitcoins you have or if you have any at all. Keep it to yourself, and you will not be targeted for it.

Check the URL Locks

When using a web wallet, you should ensure that there is an SSL security mark in the address window of your browser. This stands for a secure site seal and ensures that your browsing is encrypted.

The website should begin with HTTPS rather than HTTP, and you should notice a lock sign next to the URL.

Avoid storing a significant portion of your cryptocurrency on exchanges

While many of the exchanges that are currently leading the market are considered safe and even have insurance, leaving the majority of your crypto on exchanges is never a good idea.