- 5 MUST DO Tips To Protect Your Crypto Assets
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As the cryptocurrency market continues to grow, so does its potential for profit. As with any new financial product, there are also disadvantages that you need to be aware of.
The cryptocurrency market’s risk-to-reward ratio is high, but through good investments, one can earn some serious money. However, this big money comes at a price: your assets are not 100% safe.
Though there is no such thing as 100% security when it comes to digital currency or any other asset for that matter, you can avoid becoming another victim by following these 5 MUST DO tips to protect your crypto assets!
Even family members should never know your private key(s). Though your family may be trustworthy at the moment, you never know what may happen in the future — someone could get mad and decide to sell all your coins or even just one!
At the same time, don’t keep your coins on an exchange because you risk them shutting down. That is right; some exchanges have closed with everyone’s money inside causing many investors/traders to lose their coins forever.
For this reason, you must move your coins off of an exchange and into a wallet where only YOU know how to access it (e.g., hardware wallet).
When signing up for your Coinbase account (or any other crypto exchange) be sure to also turn on two-factor authentication (2FA) and use a strong password.
Two-factor authentication adds an extra layer of security to your account by requiring you to enter a unique code when signing in. This is different than just your typical password because even if someone were able to get their hands on that, they would also need access to other devices that you’ve registered for 2FA with (e.g., smartphone).
As such, you must protect this other device just as securely as your typical computer/laptop.
Just like any piece of software out there (e.g., Windows, Mac OS), always make sure the latest version of the software (i.e., Bitcoin Core wallet) is updated.
Every time a new version of the software is released, there could be updates that improve security (e.g., patches) and accuracy (e.g., bug fixes). To keep your transactions safe, always make sure you are running the latest version of your wallet software!
Photo by Art Rachen on Unsplash
We recommend this one for beginners because they will typically have to purchase cryptocurrency with Coinbase which does not allow for direct crypto purchases. For instance, if you were looking to buy some Monero or Ripple with USD, you would first need to purchase Bitcoin using your credit card/bank account on Coinbase then transfer it over to Bitfinex where you can trade BTC for XMR or XRP respectively.
This process typically takes a few days and can cost a pretty penny in fees if you’re not careful. To save yourself the trouble, we recommend getting a hardware wallet that you control (e.g., Trezor). Hardware wallets are very secure because they do not store your cryptocurrency; instead, they store your private keys for each of your coins (i.e., Bitcoin, Monero, etc.).
If someone were to gain access to your hardware wallet, all they would be able to do is see how much crypto you had at any given time — but even then it wouldn’t matter because without having physical access to the device (and knowing the password), no one can get their hands on any of your digital assets! On top of that, these wallets typically cost less than $100 so you will not have to worry about breaking the bank.
It is always a good idea to keep your crypto in one place: this means that you should avoid keeping all of your coins and tokens on an exchange.
Doing so makes it easier for hackers because they only need to target one location/entity rather than multiple locations (if they can’t get access directly from the hardware wallet).
Not only does storing everything in one place increase convenience but also reduces inconvenience since if you were ever hacked, you would not lose any of your digital assets!
To conclude, there is no such thing as 100% security; however, by using these tips we hope that you can protect yourself from 99.9% of the bad stuff out there!
If you follow these tips, you will hopefully never experience a hack or lose your cryptocurrencies.
- Date of publication:
- Mon, 11/22/2021 - 10:47
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