The surge seen in cryptocurrency prices and immense popularity received means only one thing- cryptocurrencies are receiving significance in digital transactions. However, hackers and fake companies often seek ways through which these valuable assets can be hacked or looted.
Whenever a crypto coin is been hacked, crypto traders are unable to take legal actions as this digital cash remains unregulated in most countries. Therefore, you must read the below-mentioned tips to safeguard your cryptocurrency investment and prevent account hacking.
Use a Hybrid approach for your wallet security
Since you need an online wallet where you can keep your assets securely, your wallet needs to be prevented the most from falling into the hands of hackers. Physical or offline wallets must be used the most to keep your coins while a small amount required for everyday trading must be kept in online vaults.
It is recommended that public and private keys are used separately with strong passwords and multi-factor authentication. Since cryptos are becoming a mainstream digital transaction, the traditional transaction may emerge with time. However, you must ensure that your wallet is secure for keeping the assets in the long run.
Use strong passwords and keep changing them occasionally
Do not use the same password for all your accounts, particularly when you use multiple digital wallets. This is one trick most hackers use to hack crypto from investors accounts. Whenever a data breach takes place, you have to be quick enough to secure your wallet with security and prevention tactics. Always limit your exposed assets and keep unique passwords for each of them. Use two or more authentication processes and rotate your passwords wherever possible.
Register yourself with reputable exchanges, cryptocurrency wallet providers and mobile apps
Significantly, you need to make a thorough research before choosing a platform for crypto investment. Research the hacks and security issues faced by the company or whether they are using a safe platform or not. You can use more than one platform to protect your crypto, each having a unique password.
Protect your mobile from data phishing
Most of the new and existing traders use mobile apps for managing their crypto assets. Since these coins soar in prices with time, hackers get interested in targeting certain investors by arranging a mobile phishing process to hack your mobile credentials. The social engineering attacks can include breaches made from mobile phone apps, social media accounts or email. Therefore, always use a mobile that has a password protection facility and can be logged only through your keystrokes. Antivirus software is also used by many people to secure their devices.
Never share your secret key
We keep a secret key to validate that we are the ones who must be allowed to send or receive the digital coins. The owners of the wallets must never share this secret code with any person to ensure that your cold storage is safe. Cold storage usually prints out your keys and remove every digital trace made on them.
Do not use wallets that are hosted by providers
One of the traditional methods to store Bitcoin is wallets hosted on desktops or laptops and digital wallets hosted by certain providers. I must say that the wallets which providers hosts are the worst choice since they make you permit them to gather your private keys on their servers which are under their control and terms.
Choosing a wallet hosted by providers is the easiest option to store coins since it does not require any technical efforts. But then, you risk your private key including the data breach option for the provider. It is safer to use a hardware-based wallet in which you need a USB device that can encrypt and store all the private keys owned by you. They also store relevant data associated with your crypto asset. To decrypt them, you may have to use physical means sometimes but proves safer than any other way.
Active traders find difficulty in using cold wallets
Since cold wallets are completely offline, they require us to write down private addresses on papers that can be accessed by the owner itself. Only after the investor puts in the secure key, assets can be sold or purchased through a secure trading option. However, one drawback that can be found is the time required to store and process your cryptocurrency for trading purposes. Even whenever you withdraw or exchange funds from cold wallets, you may have to pay withdrawal fees. The only benefit provided by cold wallet is for the long-term investor who can keep their asset securely.
Use hot wallets for trading but learn to manage risk eventually
Hot wallets are essential for retail traders and investors since they get a storage option connected to the real-time internet. This makes trading easier and fast. Many exchanges offer hot wallets to traders that are secure and safe with the platform. However, whenever a data breach takes place in the exchange, the losses are incurred by both public and private addresses which mean, your funds can be hacked and misused. Therefore, only a small proportion of funds must be kept in hot wallets to access and evaluate continuously.