Crypto wallet best practices – How to secure your coins?

Once a Blockchain transaction initiated, it can’t be reversed, and funds can’t be returned like in the traditional banking system. Hence, it is crucial to store our cryptocurrencies properly.

Many people use crypto wallets to store their crypto. There are many different types of crypto wallets are available in the market. In this article, we will talk about some of the best practices to store your cryptocurrencies using a crypto wallet. 

Different ways in which one could attack your wallet

First, let’s talk about the different ways, which makes your wallet vulnerable. The points below are by no means comprehensive; instead, provide ideas and tips on how to secure your crypto wallet.

Social Engineering

Social Engineering is the art of manipulating the target to give confidential information. They usually come in the form of lucrative offers which are too good to be true. 

They look something like, “Click here to win free Bitcoins.” Scam emails, text messages are some of the ways hackers can gain access to your private information. 

Another way hackers can gain access to your system is by installing faulty chrome extensions.  Scam faucets will trick you into depositing some funds to complete some fun tasks.

Visiting Unsecured Website

Unsecured websites usually do not have an SSL certificate. You can quickly identify by looking at the URL. 

The URL starts with HTTP indicates the communication between the client and server is not encrypted. In that case, any hacker can gain access to sensitive pieces of information like your private key.

So always use websites starting with HTTPS.

No antivirus in your PC

You are highly vulnerable to cyberattacks if you don’t have an antivirus or if your antivirus is outdated. 

In such situations, the attacker can install keylogging software on your PC, which can steal your wallet information. 

In case you haven’t updated your Android/iOS Operating System, it will be vulnerable to cyber breaches.

Your wallet is as secure as the device you are using for it. 

No backup or Poor Backup

In the past, people lost access to their wallets because they lost their private keys. 

Keeping a digital copy of your private key is a bad idea, but while backing a digital copy, you need to follow two main things

  • Encrypt your private key
  • Use a service with two-factor authentication to backup your copy.  

People usually take photos of their mnemonic phrase, that’s a terrible practice.

Never take pictures of your private keys.

Identity Hack

Identity hack is a sophisticated way of getting control of a victim’s online accounts, email, or mobile numbers. Here an attacker gathers identity-related information such as birthplace, birthdate, parents’ name, mobile number, etc. 

Using this information, an attacker tries to take control of the victim’s online accounts or mobile number through “Sim port attack.”  

A “SIM port attack” is a malicious port performed by an unauthorized source — the attacker. The attacker ports your SIM card to a phone that they control. Using the Sim card attacker, then take over the accounts linked with the mobile number such as your email or other online accounts. You can read a story by Sean Coonce, who lost $100K because of Sim port hacking. 

How can you secure your crypto wallet?

Now, let’s see some of the tips to secure your crypto wallet.

Multi-sig Wallet

If you are dealing with a large amount of crypto, you should use a multi-signature wallet. It usually needs the keys of two or more people to approve the transfer of funds. Besides, it can also add a time-delay in fund transfers. 

Cold storage

Cold storage is storing funds in a device that is not connected to the internet. It can be either a hardware wallet or a paper wallet. They are less vulnerable to cyberattacks, and some support the offline transaction.

If it is not possible for you, then get a hardware wallet to secure your cryptocurrencies. Hardware wallets provide the best security. 

Choose your Wallet wisely

Before using a wallet, read wallet reviews and see what other people are saying about the wallet. Choose a wallet that fits your needs rather than provide tons of features.

Read Crypto wallet reviews on CoinCodecap

Not your keys, Not your Crypto

Non-custodial wallets have an advantage over custodial wallets. So, It is preferred to go for non-custodial wallets. It is a best practice to distribute your fund into multiple wallets. In case of a wallet breach, you will lose all funds if you keep all your funds in a single account.

Being said that, if you are not able to manage your crypto assets, use only well-reputed services to store your crypto. 

Update your Crypto Wallet

The power of malware keeps going up day-by-day. So, keep your wallet software and antivirus updated. This will prevent potential cyber breaches. It is also recommended to install software from trusted sources. 

For PC, you can visit the official website for the software. In the case of mobile, install apps from Play Store or Apple Store instead of downloading APK files from unknown sources.

Two Factor Authentication (2FA)

Nowadays, many wallets provide the 2FA feature, which provides an additional level of security. 

This may involve an OTP sent to your phone to verify that the rightful user initiates the transaction. So it is safe not to share your phone number on social media.

Public WiFi

Hackers like places with public WiFi. So, you should not use public WiFi to make transactions. In case of urgency, use a VPN like NordVPN, or you can use Orbot to run a tor in your phone. It helps you get tracked by online services and reduces the chances of cyberattacks. 

No amount of precaution can save from mishaps. But it is better to take precautions than be sorry. So, it is best to follow the above practices to keep your funds safe. And spread awareness about the new updates in the community. Connect to our telegram group to stay updated.

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