Cryptocurrency, or digital currency, has been steadily gaining in popularity since its inception, almost with the creation of Bitcoin. Investing and trading in cryptocurrency can be extremely lucrative, but it also comes with some inherent risks that need to be taken into account when entering the digital assets market. While it’s very tempting to simply invest in this popular market, you should take some time to research how to secure your cryptocurrency online first before jumping in and placing any real money on the line. Below are 8 simple steps you can take today to secure your cryptocurrency online!
1. Create a Strong Password
First things first, make sure you create a strong password. According to a study done by the National Institute of Standards and Technology (NIST), most people pick passwords that are just six characters long or less. These include common words that can be found in a dictionary as well as associated dates (e.g., birthday). To be on the safe side, make sure your password is at least 12 characters long and includes letters and numbers. Your password should also not contain any similar-looking characters like 0-O or 1-l. If possible, use a randomly generated combination of symbols for added security – especially if you’re going to be storing large amounts of currency in a digital wallet.
2. Two-Factor Authentication
Most websites today offer two-factor authentication. This means that when you log in, you need both a password and a code sent via text or Google Authenticator. Hackers can’t steal your password if they don’t have access to your phone, which is how most people access their texts and apps. You’ll find that two-factor authentication adds an extra layer of security by requiring another passcode when logging in from a new device, making it much harder for a hacker to gain entry into your account – even if they have all of your information already.
3. Use a Hardware Wallet
A hardware wallet is a special type of bitcoin wallet which stores the user’s private keys in a secure hardware device. Hardware wallets offer robust safety features for storing cryptographic assets and securing digital payments. Popular models include Trezor, Ledger Nano S, and KeepKey. Hardware wallets can be very useful for storing bitcoin, but also Litecoin, Dash, or other cryptocurrencies, depending on what kind of wallet they are. When you own cryptocurrencies, you need to protect your confidential data and access to funds. Private keys are usually stored in Bitcoin wallet software and should be secured by users themselves using strong passwords and encryption when possible.
4. Don’t Use Public Wi-Fi Networks While Trading
Public Wi-Fi is convenient, but it’s easily exploitable by hackers and thieves. Public networks are also less reliable than private networks; they often have more users connected at once, so if someone hogs bandwidth by downloading torrents or streaming video, service can slow down for everyone else. If you have a smartphone or mobile hotspot available instead of connecting through a network cable, use that instead. Turn off location services: Your smartphone knows where you are at all times thanks to its GPS and cellular data-tracking abilities. Both of these services also suck up data bandwidth from your phone—not good if you’re trying to conserve bandwidth for trading.
5. Use an Offline Machine for Cold Storage Purposes
It’s important to note that some wallets only allow you a certain number of outgoing transactions before you have to do a new one. This is often referred to as dust limits, and it’s usually relatively low (i.e., 100-200 transactions). This means that if you send a transaction from an exchange or any other hot wallet, it might take a while before it can be broadcasted on a block. To avoid problems when sending more than one transaction, we recommend having at least two digital wallets. One for everyday use which contains all your funds, and another for offline purposes that will be used solely for transactions over your dust limit—we recommend paper wallets for offline storage of larger amounts.
6. Have a Backup Plan in Case You Lose Access to Your Private Keys
Losing access to your private keys is a huge problem because, without them, you can’t access any of your cryptocurrencies. There are several ways that can happen: They could get stolen, lost, or damaged. If you want a backup plan in case something like that happens, it’s important that you keep copies of your private keys stored somewhere else. Preferably in a physical notebook securely stored in your desk or drawer.
7. Back Up Your Wallets onto Two Physical Drives or USBs
As of now, all cryptocurrencies are still quite volatile. This means that if you want to keep a sizable investment in cryptocurrency and don’t believe they will increase in value over time, it may be a good idea to spread out what you invest into multiple wallets so that if one is compromised, only a portion of your total investment will be lost. You can back up your wallet by creating copies onto two physical drives or USBs as well as printing them out. As long as both copies remain intact, you will always have access to that particular wallet. It’s also a good idea not to share digital or hard copies of sensitive information with anyone else other than whom you are conducting business with.
8. Securely Dispose of Paper Wallets
It’s a good idea to immediately destroy any paper wallets after you empty them, just as you would do with a used, empty chewing gum wrapper. That way, you aren’t accidentally leaving it somewhere for someone else to find. While someone could easily see that there is money on it without breaking it open, some might try anyway – and then ask for compensation when they don’t succeed. You don’t want anyone at all finding out about your digital fortune (or near-fortune). Make sure to dispose of any paper wallets by destroying them or even cutting them into pieces once they are empty.
With thousands of cryptocurrencies and counting on the market today, it can be difficult for investors to keep track of their crypto holdings. One simple way to ensure you’re keeping up with all of your investments is by using a multi-currency wallet. Such wallets not only make it easier for you to keep track of all of your currencies, but also offers insurance protection from theft. Some come with an app that provides trading functionality so that you can invest in altcoins securely. However, the only way to keep your cryptos secure is by implementing and observing the highest levels of online security whenever you are trading, investing, or storing your precious cryptocurrencies.