How To Safely Store Cryptocurrency: Wallets Explained

So, how to store cryptocurrency safely? If you’re concerned about finding a secure cryptocurrency storage, it’s best to use a wallet. 

However, a cryptocurrency wallet isn’t just where you store digital assets, it’s what keeps them safe. But not all wallets work the same way.  

Some cryptocurrency wallet types are connected to the internet (hot wallets), making transactions quick and easy, while others stay completely offline (cold wallets), reducing the risk of hacks. So, which one should you use? Well, that depends on how you plan to store and use your crypto. 

A lot of people go for hot wallets because they’re convenient and accessible from your phone or laptop anytime. But with that ease comes risk related to cryptocurrency wallet safety. What if someone gets access to your private keys? Your funds could be gone in seconds.  

Cold wallets, on the other hand, are harder to use daily, but way more secure. No internet connection means no direct exposure to cyber threats. 

How To Store Cryptocurrency Safely – Are Cold Wallets The Best? 

If you want to get proper cryptocurrency wallet protection for storage purposes, then yes. 

But the thing is, you can’t just use a crypto wallet for storing your coins. It’ll also hold your private keys to get access to your funds. So, what happens if you really need some crypto to make a profitable trade right now? You can’t take it out from your cold storage. 

That’s why, choosing the right cryptocurrency wallet options requires careful consideration of what you want to do with your funds. 

Cold storage wallets are offline. And because of that, it’s impossible for a hacker to get access to from outside, as long as they don’t have your credentials or can’t be. For example, if you want to access your private keys on Trezor or Ledger, you’ll need to physically press buttons to confirm that you are… well, you. However, making transactions from a cold wallet is difficult, as the confirmation process is quite long and tedious. So, you might miss out on some time-critical trade or negotiation.  

Hot wallets, on the other hand, have a digital form and offer access to funds just by putting your password and going through a two-factor authentication. However, as they’re always connected to the internet. This isn’t really healthy in terms of blockchain wallet security and makes them more prone to exchange hacks, phishing attacks, and malware. 

Then there are paper wallets, which come with printed QR codes and private keys. These are extremely secure, as they cannot be accessed through the internet, however, the risk of them getting physically damaged or lost is quite high as well. 

Multi-signature wallets usually require more than three approvals before you can access your account, which makes them ideal for joint accounts or businesses. 

But How Can My Wallet Get Hacked? 

Phishing scams are the one most common reasons why your crypto wallet or credentials might get hacked or stolen. In this case, the scammer will send a mail with an “urgent message” like this –  

Source: FTC 

Once you click on this link, you’ll redirected to a website similar to the exchange app or tool you’re using. But once you put in your credentials, the page won’t get redirected to nowhere – and you’ll be stuck in the same window, while the scammers take out all your crypto coins. 

Keyloggers and malware, however, try to record keystrokes to steal your passwords. But how do they do it? The malware can enter your mobile phone or computer whenever you enter a website created by the scammers. Once it’s in your device, it’ll record every action you’re making in your system and send it to the hacker. If they know, which keystrokes you are making to use your crypto account, they can do the same to get access to your funds. 

In SIM-swapping attacks, hackers tend to hijack mobile numbers to reset your offline cryptocurrency wallet’s passwords and rewrite them on their own terms. Exchange hacks, on the other hand, can breach centralized platforms and lead to mass crypto threat. 

Can I Protect Myself Against Hacks And Scams? 

Yes, as long as you’re wary about what or who you’re trusting. For example, here are some statements or emotions that you cannot trust – 

1. Making unrealistic promises, such as “multiplying your investment by 2x in a week” 

2. Messages or emails asking for your 2FA codes or private keys for “security purposes” 

3. Unverified browser extensions, especially VPNs, claiming to improve your wallet security 

4. New wallet apps who have no reviews or transparency related to their developers 

Apart from avoiding these, it’s also important to keep your account protected in any way you can. Here are some tips that might be of your help: 

1. Using two-factor authentication on your account can add an additional layer of protection and send you an OTP whenever someone tries to access your account. 

2. Write down your private keys on your diary or print them on a piece of paper and store them in a safe place. And don’t share it with anyone – not even your partner! 

3. Phishing links usually look very similar to the official links of the crypto exchanges you are using. So, double-check them before entering. 

4. We’d also suggest you not to keep all your crypto in one place. Instead, keep a small amount on your hot wallet, so that you can use them for trading, while the other portion can be kept in cold storage for better security. 

Summing It Up 

Losing access to your wallet is way more common than you think, however, by taking the right security measures, you can keep everything safe and secure. And in some cases, you may proceed with safe backup wallet recovery as well. We hope our tips on how to store cryptocurrency safely will keep your wallet secure and away from prying visitors.