Cryptocurrency’s hottest selling point is also its downfall. Well, not for the cryptocurrencies, but the owner of it. Crypto is decentralized from fiat currencies and truly untouchable by world banks. It’s one of the reasons why they love it so much and why its popularity has skyrocketed in the last 24 months.
It leaves the onus on the owner, to safeguard the funds. Although using exchanges to trade, it’s not where to ultimately store tokens.
Due to the value of various cryptocurrencies skyrocketing, the virtual attacks have intensified tremendously. Where to store tokens and how to send them is of utmost relevance to be a successful crypto investor and trader. There is a great guide on Tradingbrowser on this topic. It’s a great read to learn more.
What Is the Safest Way to Store Cryptocurrencies?
Before looking at the best ways to store crypto, it’s imperative to understand what a crypto wallet is. Just like a branded leather wallet, precautions are necessary to keep the virtual version safe from people with long, itchy fingers.
Yes, unfortunately, the proverbial pick-pocketing has also gone virtual, and online attacks on cryptos are rife with super-smart hackers.
There are ways to safeguard a crypto-wallet. As stand-alone solutions, none can offer a 100% fail proof guarantee, but by applying most, or all of them, there is a strong chance of not falling victim to cyber-crime.
A virtual wallet has two keys, known as the private key and the public key. They’re both a sequence of cryptographic symbols needed to complete transfers between wallets. The public key can be seen by others and is used to identify the owner of the wallet. The private key is the password to access and use the wallet and is the primary first step of security.
Password strength plays a vital role online. Always use more than eight digits and mix it up nicely with a combination of numbers, characters, and special symbols. Please refrain from using prominent dates attached to a name or surname. It’s a hacker’s fast-track to access tokens.
Make sure that the virtual wallet allows for a two-step verification process. Ensure that the platform uses the latest SSL 128-bit encryption technology. Another excellent way to secure a virtual wallet is to enable a multi-signatory protocol. It’s a superb solution to store crypto tokens for longer-term as an investment.
Cold storage is the safest way to store digital tokens as it’s entirely offline, therefore impossible for hackers to access. Cold storage for crypto has various methods to choose from, including paper wallets and hardware wallets.
Where Not to Store Cryptocurrencies
The only place with zero control over token security is when it’s with an exchange. Although it’s a must to use exchanges when buying or selling crypto, it should conclude the transaction and to withdraw tokens to a private wallet or cold storage as soon as possible.
The sheer volume of crypto trade via exchange platforms makes them very vulnerable to cyber attacks as they’re considered soft-targets with a high yield when hacked. Trusted exchanges do their best to safeguard these tokens, but can’t guarantee that a brilliant hacker can’t violate their protocols.