Ever since public awareness of Bitcoin and other digital assets has blown up, nearly everyone is doing what they can to get in on cryptocurrencies and digital assets.
That said, a majority of those people don’t really know what they are getting into. Because of “fear of missing out,” they are just buying Bitcoin because everyone else is, without doing the proper research.
In this post, we’re going to break down what exactly you should do when investing in cryptocurrencies to keep them as safe as possible.
Be Careful Where You Use Them
With Bitcoin only having been around for 10 years now, those who were into it early on have a pretty solid understanding of buying, trading, and underground transfers.
Because of all that experience, these users know exactly how to manipulate those who are just getting into cryptocurrencies. This means you need to be very careful about who and where you sent you digital currency.
Some merchants are straight up fake, while others will do their best to scam as many funds from you as they possibly can. It doesn’t matter what sort of item you buy, scammers exist in every market. It’s essential that you be careful and do your research before you send any coins away.
Store Your Coins Offline
Paper and hardware wallets are the absolute safest way to store your Bitcoin and other cryptocurrencies. Much more so than online portfolios, and even more than desktop wallets.
This is because paper and hardware wallets are technically “cold storage,” meaning they exist for long-term holding. Neither of these wallets is ever connected to the internet, so there is absolutely no way a hacker or bad actor can get involved with your holdings.
Plus, hardware wallets even have ways around people looking over your shoulder at information. Due to brilliant two-button features and randomized PIN input, the only person getting into these systems is you.
Check Your Accounts Often
Most investors only check their accounts when making a trade. While that works for day-traders, long-term holders aren’t frequently checking this information.
This is a terrible idea. Hacks and leaks happen all the time. Depending on where you store your cryptocurrencies, it’s entirely possible that your information was stolen without you knowing.
If you look after you hear about an attack, it may be already too late. Be careful with your storage solutions, and make a daily habit out of checking them.
Utilize A Variety of Security Layers
General internet users have one password for all of their log-ins. However, most users aren’t storing digital assets.
In the case of online wallets and other forms of crypto storage, be sure to add what is called two-factor authentication. This means that every time you enter your password, there is still a second layer that must be confirmed.
A basic example would be a text to your phone that only you have a hold of. Even if someone got a hold of your password, they have no way of getting in without your phone number. It may add a few seconds to each log-in, but those few seconds are entirely worth it.
Use Your Recovery Options
Whether it’s a mobile, hardware, desktop, or hardware wallet, be sure to utilize your recovery options. Each one of these options provides recovery keys for you to write down and store in a safe place in case of emergency.
Usually, you’ll have 12 or so words to write down which you’ll have to put in when trying to recover. Also, you should be sure to store them in multiple physical spaces and maybe even keep a digital copy or two, as there is no way to get these back if you lose them.
Use Multiple Storage Options
Smart investors store their cryptocurrencies in multiple spaces. Some have a few different hardware wallets, while others keep a trading amount in an online wallet and the rest in cold storage.
Regardless of how you do it, make sure you spend the time to diversify your storage options in case one of them is compromised in any way, shape, or form.
Also, don’t forget to establish different passwords for each wallet as well, and even different recovery systems on top of that.
Buy New Hardware Wallets
A popular scam in the cryptocurrency world is to sell your old hardware wallet without completely wiping it.
Once a buyer sets up the new wallet and stores their currencies on it, the seller can suddenly use recovery options to gain access to the contents and lock you out of the wallet completely, stealing your hard-earned digital assets.
Always spend the extra money on a new hardware wallet. Yes, they are a bit on the expensive side, but these are your hard-earned funds we’re talking about.
Don’t Rely On An Exchange
When it comes to trading, buying, and selling, an exchange is a fantastic platform to spend your time on. However, once you’ve done the transferring, it’s best to remove your funds from the exchange as fast as possible.
You see, a cryptocurrency exchange is essentially a centralized space for storing a decentralized asset. With an exchange, your funds are consistently at risk of being hacked into and stolen.
Exchanges can go down or have a change of mind and steal cryptocurrencies. It’s really not worth the risk to keep your assets online, especially when moving them to a wallet only takes a couple of minutes.
Don’t Share Your Information
The modern world consists of everyone oversharing. Instead of keeping things to ourselves, we post about what we’re doing, what we’re investing in, and how we’re making money.
Hackers are very intelligent. They can take your information and use it to make you a bigger target. You’ll have a hard time keeping your digital assets safe if you consistently post about what you’re investing in or how much Bitcoin you have. It’s simply not worth it.