How to Protect Your Cryptocurrency

June 21, 2021
Sarah Gormley

As many people transition their physical currency to digital currency, it is important to know how to protect it. There is the never-ending, lingering threat to your cryptocurrency to be hacked. Here are 6 steps to take to protect your digital investment.

 

1. Use a cold wallet for a majority of your cryptocurrency

Cryptocurrency is stored in a digital wallet which can either be a hot wallet or a cold wallet. A hot wallet is connected to the internet, making it easier to complete crypto transactions. Its easy accessibility makes a hot wallet the most popular kind of cryptocurrency wallet but it is not the most protective. The hot wallet is vulnerable to online hacking, while a cold wallet is not connected to the internet, making it more secure. The cold wallet is ideal for those who are storing a large amount of cryptocurrency and want it protected. It is very common to place most of your money in a cold wallet for extra protection and keep some in a hot wallet for easy access.

2. Use a hybrid strategy
Putting all of your money in one place online can be very dangerous. If a hacker is to gain access to the account, you are at risk of losing all of your money. The best way to prevent this is to use a hybrid strategy by keeping a majority of your money in a physical wallet offline and only a portion of your money in an online wallet. Storing your offline money in a safe or a deposit box is a great way to keep it protected.

3. Use a secure internet
When completing cryptocurrency transitions, be sure to use a private network and avoid public Wi-Fi at all costs. Public Wi-Fi is more vulnerable than a private, home network. Even when using your Wi-Fi at home, an extra form of protection would be to use a VPN to disguise your IP address and location, helping keep your information private.

4. Create a strong password
Be sure to have a creative, strong password that is difficult to guess. Changing this password regularly is a great way to protect your cryptocurrency. It is also crucial to use different passwords for all of your accounts. If two accounts share a password and one of them is hacked, it is rather easy for the other to be hacked as well — using different passwords will limit that risk.

5. Be aware of phishing sites
Phishing scams via ads and email are a common form of cryptocurrency hacking. Be hyper-aware of what links you click on and what emails you open — avoid anything suspicious.

6. Keep your information to yourself
In the cryptocurrency world, each user has a secret key that serves as their identity in the market. It is used to verify that the user completing the transaction is the owner — refrain from sharing it with others.

 

There is only so much you can do to protect your digital currency. Following these steps above and keeping yourself updated on new trends, prevention strategies, and security news will be the best way to protect your crypto assets.

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