Best Practices to Safeguard Your Crypto Assets

As a crypto investor, it is paramount for you to safeguard your investments. But can you confidently claim that your investment is protected?

Decentralisation and anonymity of cryptocurrency have attracted many cybercriminals and hackers which lead to a significant rise in theft. In fact, between 2020 and 2021, the theft ratio surged by a staggering ninefold. Moreover, in 2021, only PolyNetwork exchange lost 611 Million $ to cyber theft.

Owing to such disturbing facts, it’s time to roll up your sleeves and fortify your crypto wallet instead of succumbing to anxiety. In this article, I will outline foolproof ways to protect your cryptocurrency so that you’re not caught off guard by financial loss.

Cold Wallets vs Hot Wallets

The war between cold and hot wallets is more like a trade-off between security and convenience. Cold wallets, also known as offline wallets, are designed to store your cryptocurrency offline. They shield your potential investments and offer maximum security.

On the other hand, hot wallets are online wallets that bring traders convenience in their swift transactions.

If the security of your funds is your priority, cold wallets are a safe haven for you. However, you will not be able to do transactions freely at any time.

Stay optimistic! As you can adopt a hybrid approach, which involves both cold and hot wallets. To maximise the security of your money, you can store funds in cold wallets for the long term while having your small portion of funds for regular use in the hot wallet.

Remain Vigilant Of Phishing Attacks

There are numerous perpetrators out there, ready to make hunt their prey by using cunning practices. It is only your due diligence and protective measures that can protect you from such potential threats.

Exercising caution while opening emails is an imperative aspect of securing your funds. You should always refrain from opening a suspicious email or an invite link or attachment sent by an anonymous person.

Moreover, create a complex password and never share your personal information on any website without double-checking its authenticity.

Activate Two-Factor Authentication

Always add an extra layer of security to your wallet by choosing wallets that offer two-factor authentication. This involves utilising a combination of passwords, PIN codes, fingerprints, voice recognition, or face recognition to secure your wallet. This way, the intruder will not be able to pass the strong barrier of security even if he could guess the first password.

Backup Your Wallet

To save yourself from a substantial financial loss if your wallet gets lost or stolen, backing up your wallet is essential.

The backup should include your private key (for cold wallets), seed phrases (for hot wallets) and other important information needed to access your funds. Furthermore, the backup devices should also be encrypted to keep your funds as secure as possible.

On A Final Note

By incorporating these effortless yet effective strategies in your cryptocurrency trading, you can have safer transactions without getting anxious. So, without further ado, you should embrace these proactive approaches to fortify the security of your digital asset.

Remember, an ounce of prevention is worth a pound of cure when it comes to protecting your digital assets.