So, you’ve gone ahead and bought yourself some of that nice cryptocurrency like Bitcoin, Ethereum or even better yet, Dogecoin (insert sarcasm). Next step is to find out where the hell you should hold onto these beautiful, shiny, digital internet coins. With 2017 being a tremendous year for cryptocurrency, the huge influx of users were targeted by hackers and scammers, which is expected to increase in 2018. Now, more than ever, it’s vital that you secure your portfolio and rest your weary head on a “piece of mind pillow”.
Before we begin explaining how to store and secure your crypto, it’s vital you follow these essential tips:
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- Use different passwords – this is seriously important. Don’t ignore like I think you will. If you can’t remember them, just store them on a piece of paper for safekeeping.
- Use a different email – this definitely helps to minimize risk, you’ll thank us for it later!
- Enable 2 factor authentication – when you signed up for an exchange you may have been prompted to enable 2FA which uses your phone as an extra layer of security. So even if a hacker collects your username and password, they still won’t be able to get in! Pretty cool right?
- Don’t store your passwords/private keys in the same place – if you’re one of the people who chucks all their passwords in a notepad/text file, you risk losing everything if someone gains access. Trust me, I used to do this too and it’s a bad habit. You might want to use a secure password manager such as Dashlane or Lastpass or even better, store your passwords offline on paper. Yes, paper still exists in 2018, starting using it. Again, spread it out to numerous occasions within your house or even use a safe if you have one handy.
- Backups – this is essential, should anything happen to your device, have a backup ready at all times. Use USBs, external HDDs, encrypted backup files. Have multiple backups, be vigilant with your money, it’s a good habit to get yourself into.
3 Ways to Serve and Protect Your Cryptocurrency
When you first purchase any cryptocurrency, you do so through an exchange which allows you to trade your traditional fiat (USD, GBP, EUR, KRW etc) for your wanted cryptocurrency (BTC, ETH, XRP etc). Exchanges will hold your cryptocurrency assets in their own personal wallets sometimes called hot or cold wallets, meaning you never really have access to your private keys. We do not recommend you keep your coins on any exchange for a long period of time as you will never really have full control over your coins. There is always that risk of an exchange being hacked. If you’re an active trader and need your assets on an exchange at all times, we recommend spreading your risk across multiple exchanges for security.
- Easy to manage and set up, just create an email and password. There you have it!
- Exchanges support many coins so you can store everything in one place
- Almost all exchanges have 2FA security (2 factor authorization)
- Can easily trade without having to move funds
- Can be accessed from any device with an internet connection
- You never own your private keys, so your funds are never truly yours
- Exchanges can get hacked and your funds are always at risk. If you’re going to keep your crypto in an exchange for longer than a month, make sure it’s in a well-established one like Bittrex, Poloniex, or GDAX.
Client-Side Or Desktop Wallets
Store your assets in a wallet in which you have full control over your private keys. For ethereum tokens you might want to use MyEtherWallet (you should download MEW offline for added security). If you want a trade-off between security and practicality, then take a look at the Exodus Wallet, which supports multiple coins and also allows you to trade inside the wallet! Pretty cool right?
We also recommend Jaxx and if you’re a strong Bitcoin holder as it runs on IOS, Android, Windows, and Mac. With desktop wallets, it’s vital that you perform regular virus/trojan checks as there is chance that your wallets could be hacked with keyloggers and the like. Should you get infected, use an up-to-date antivirus software such as Avast. Be extra careful downloading suspicious files online as they carry a risk of infecting your computer/device.
- Gives user full functionality of the respective cryptocurrency
- You hold your private keys so your assets are truly yours
- Safer from online hacks and scams (keep your private key safe)
- If you are unaware of common security practices you can still lose your funds to viruses and Trojans (like keyloggers or any other program that logs your keystrokes)
- Many wallets often do not support a lot of cryptocurrencies, hence why you may need multiple wallets to store different cryptocurrencies.
- You’re still susceptible to someone stealing your private key if you save it on your computer or in your home where someone can find it easily.
Hardware or Cold Wallets
These wallets are completely offline and secure from hackers. This is why we recommend everyone use these wallets if you’re truly serious about hanging on to your precious cryptocurrency.
Hardware wallets like Ledger Nano and Trezor are small hardware devices that you can purchase on Amazon or any other electronics store. These handy USB looking devices store your crypto assets along with your own private key. Plug them into your computer via USB when you need to access or store your funds. Once you’re done, store the storage unit in a secure physical safe.
These are, by far the most secure wallets you can own. The only way you’d be able to lose your cryptocurrency is if you get physically robbed. The chances of that happening are significantly low, unless you start gloating to every person you encounter about how much Bitcoin you own.
If you want to go a step further, you can store your assets on a paper wallet. Yes, you heard me right, you can store it on a piece of paper. With these wallets, your private key/QR code is printed on a piece of paper, then it’s up to you to store that piece of paper safely.
This might be less convenient if you send, receive and trade your coins often, however if you’re a hodler, this is one of the least risky methods to store your cryptocurrency. Just be sure to keep that piece of paper safe and locked securely.
- Hold your private keys and information offline and away from the device
- Hardware wallets can be used to access your cryptocurrency from any device
- They provide the highest level of security as physical theft remains the only risk
- Portable as well as relatively easy to use
- Can store multiple cryptocurrency in one place
- Some hardware wallets are often quite expensive to purchase
- You may not have access to the full functionality of the respective cryptocurrency
Let’s wrap this up…
I’ve discussed the three most secure and effective ways to store your cryptocurrency. Now you know what the benefits and flaws are of each. Always remember, your crypto assets are never truly secure until you take the responsibility to act on it. The cryptocurrency realm is innovating at a tremendous pace and so are hackers and scammers. With criminals innovating new techniques, just as quickly as we combat them, it’s vital you keep updated with the latest news and information regarding cryptocurrency security.