The internet is not a safe space. At the best of times, it’s like a feeding frenzy of sharks, especially where money is involved. Cryptocurrencies, no matter how much they tout security, are vulnerable to hacking.
Or, at least, that’s the way many people perceive the internet. It’s not as bad as all that, but when it comes to the safety and security of funds, perception is reality. It’s a good thing, though. You should be taking the best care of your funds, and especially cryptocurrency. You owe it to yourself.
You should compare and contrast security options just as you do with any aspect of trading. For example, you start with the best Bitcoin trading bots and then proceed to other essentials. In this article, we take you through the four best methods at your disposal to keep your cryptocurrency safe so that you may sleep soundly at night:
- Hard wallets
- Soft wallets
- Two-factor authentication
- Custody provider
1. Hard Wallets
People feel more secure when they have custody of their own assets. For cryptocurrencies, the best way to achieve this is by using a hardware wallet. These are devices that store your crypto offline, reducing the risk of hacking considerably.
Hardware wallets like Trezor and Ledger are market leaders. They are pocket-sized and reliable, but they cost a pretty penny. Once you have one, you’ll need to secure it with a seed phrase. This seed phrase is the only means of recovering your crypto if you somehow lose or damage the wallet.
Be cautious. Don’t keep your seed phrase lying about online. Stories abound of how people who did this had their funds depleted by hackers who came across their phrase. Your best bet is to write it down somewhere on a piece of paper. Go old-school.
2. Soft Wallets
The more easily accessible but more risky cousin of hard wallets, a software wallet is one that stores your crypto online. The main reason for this is to make it easier to access your funds on web browsers and mobile apps. The upside of soft wallets is that you don’t have to buy a separate device.
Like a hard wallet, soft wallets generate a seed phrase for you and you have to keep it secret. Keep it safe. Write it down somewhere, away from prying eyes. However, since your phrase was generated online, there is always a chance that it’s out there, within the grasp of enterprising hackers.
You can download a software wallet app from your phone’s app store any day. There are a lot more choices available than for hard wallets. Make sure to choose one that is trusted and safe.
3. Two-Factor Authentication
Two-factor authentication provides an extra layer of protection for your most valuable assets. Simply put, you’re setting up your accounts to verify two pieces of your identity instead of one – your password as well as your fingerprint, for example. Exchanges and bots have them nowadays.
The best way to set up a 2FA layer is with a combination of something you know and something you own. A password is something you know, and you can use a One Time Password (OTP) generator app on your phone to make sure only you have access to your account.
Next, use something you know you own. Your hardware wallet is a safe option. Biometrics, like fingerprints, are retinal scans, are a good second option, but they are unchangeable. In case someone gets their hands on it, they can use it anywhere. Best to avoid such measures.
4. Custody Provider
If you’re new to crypto trading, or if you don’t want to deal with the headache of having to deal with cost investments, then a custody provider service might be what you’re looking for. A custody provider is a third party that stores your crypto, and provides security for everything you own.
The trade-off for not having to deal with the hassle of doing it yourself is to trust someone else with it. The rule of thumb is to go with established firms. Look into the track record in the financial security of the firm you want to use before you come to a final decision. They might cost a bit more, but it’s better to trust them over small exchanges that may or may not be secure.
A good example of a custody provider is Skrill. They have been in the crypto business for a couple of years but have been growing fast and have a solid reputation since they came into being in 2001. Skrill is a good baseline to compare other firms against.
At the end of the day, your funds are as safe as you make them. Security is a mixture of many factors – cost, hassle, risk, and trust. But if you take the right measures and do enough research, you’ll find plenty of methods to keep your money safe from even the best of hackers.