In the crypto space, for security concerns, you should have their crypto wallets and secure your crypto assets. Before that, you must first learn about what a crypto wallet is.
What is a Crypto Wallet?
A crypto wallet is a system that securely stores users’ payment information and passwords for numerous payment methods and websites. By using a crypto wallet, users can complete purchases easily and quickly with near-field communications technology. They can also create stronger passwords without worrying about whether they will be able to remember them later.
Cryptocurrency wallets can be used in conjunction with mobile payment systems, which allow customers to pay for purchases with their smartphones. A crypto wallet can also be used to store loyalty card information and digital coupons. Multiple wallets come in a great variety. For instance, hot wallets and cold wallets are depending on how the private key is stored. Cold wallets are completely offline and protect the private key from hacking. Hot wallets can be used to trade cryptos whenever there is a connection to the Internet. For crypto users who engage in frequent trades, such wallets are more convenient. Right now, there are primarily two kinds of hot wallets: custodial wallets and HD wallets. The chief difference between the two is whether the user holds the private key by himself.
How to properly Secure your Crypto Assets?
Now that we walked through the basic concept of crypto wallets like bitcoin wallets, we will introduce how they can be used to properly maintain our crypto assets.
1. Use a safe network environment
When trading cryptos, please use safe Internet connections only and avoid public Wi-Fi. You can always use a VPN for enhanced security even when using your Internet connections at home. VPN will change your IP address and location, thereby keeping your browser activities safe and secure and protecting them from threats.
2. Back up the private key/mnemonic phrase
The private key is the most important thing for the management and use of cryptos. For all crypto users, the private key determines ownership, meaning that one can only truly own crypto assets by holding the private key. Therefore, every one of us must learn about how to keep the private key safe before entering the crypto space.
Functioning as the password to a bank account, the private key is composed of a 64-bit hexadecimal character generated by the encryption algorithm. For many crypto newbies, it is difficult to memorize or store the private key. As such, a type of private key that is easy to remember and back up was created — mnemonics, which contain common English words converted from the 64-bit private key through algorithms. As the private key, the mnemonic phrase is also subject to losses and thefts.
Hence, we must keep good care of it. Please do not save the mnemonic phrase as a screenshot in your phone or keep it on a cloud disk. The conventional way of storing the mnemonic phrase is to write it down on paper. However, as paper can be damp and burned, it does not last. Instead, you will need something permanent, sturdy, and reliable to store your mnemonic phrase.
3. Protect your device
Please make sure that your device is equipped with the latest virus definitions to guard against any new bugs. You can also use powerful antivirus software and firewall to enhance the security of your device and protect it from hackings based on codes that exploit bugs and vulnerabilities. Phishing scams through malicious advertisements and emails are rampant in the crypto space. In light of these, you should be careful when trading cryptos and avoid any suspicious and unknown links.
4. Choose secure and convenient custodial wallets
It can be challenging for crypto beginners to maintain the private key/mnemonic phrase by themselves. Apart from hackings, plenty of crypto losses occur because users failed to keep track of their private keys/mnemonic phrases. Under such circumstances, you can use some secure and reliable custodial wallets.
5. Cold wallets — the safest way to hoard cryptos
Disconnected from the Internet, cold storage can, in theory, keep the private key away from the Internet permanently, which avoids cyberattacks. Additionally, cold wallets are also easy to store. At the moment, they are regarded as one of the safest ways to store cryptos, and users normally store most of their crypto assets in a cold wallet.
Right now, many big crypto holders have adopted hardware wallet is to store cryptos. A hardware wallet is a physical device that stores the private key in a chip. When they need to use the private key, users can call the private key data from the hardware wallet. Meanwhile, since you can back up the data of your hardware wallet, you can retrieve the crypto assets even if the hardware is lost.
