In the last few years, there have been numerous instances where investors have lost their cryptocurrency savings. The answer as to why this happens varies from person to person. The common culprit often seems to be inadequate management of private keys which makes your trade and assets prone to hacking and phishing scams. As technology advances, newer risks associated with crypto theft come to the surface. Read here more about Multibank.io.
For most cryptocurrencies including Bitcoin, there is no central system that oversees trades. You are your own bank. While this has its own advantages, the trouble that we do not see with traditional banking is that with cryptos, once the tokens are out of your wallet, there’s no way they can be back. Insurance is not yet an option in the crypto world. Thus, it becomes all the more important to ensure your crypto holdings are safe.
Consider cold storage
There are a lot of benefits of cold storage. These aren’t limited to investing but also extend to security. It is recommended that you never put all your digital money in a single wallet. This is irrespective of whether you use a hot or a cold wallet.
Ideally, you should have multiple crypto wallets. This way you could divide your savings and thus, it would not be a devastating loss if one of the wallets gets hacked or compromised. It is much wiser to use cold storage wallets as they save your crypto assets offline. Unlike hot wallets, they’re not always connected to the internet. They’re also hard to hack unless we’re talking about a phishing scam that you may fall prey to.
Keep a backup
Here’s an important word of advice: save your digital wallet’s private keys offline. This will prevent hackers from accessing sensitive data. It is also necessary to have backups for these private keys that must also be stored offline.
Do you also use the same password for multiple online accounts? You’re just like nearly three-fourth of the total U.S millennials who do the same across over 10 devices. It indicates a lot of distribution which increases the possibility of damage. It could be detrimental if these fall into the hands of the wrong people. You may want to keep separate passwords for your digital wallets for safety. While remembering long passwords with special characters, numerics, and uppercase alphabet can seem like a task, at least you do not risk losing all your money.
Watch out for scams
Phishing scams have become the talk of the town. They’re becoming more common with more people jumping into the crypto bandwagon every day. Your crypto safety can be compromised in various ways like fake ads on search engines and social media websites as well as malicious apps. There are also phishing domains that sound like popular websites but are actually dangerous.
Be sure of the destination address
What is a crypto address? A crypto address is a place/wallet through which you send and receive cryptocurrencies. If you put in the wrong address, you cannot retrieve the tokens that are lost. Hence, it is very important to check the address before processing any payment. Beware of programs that can make changes in the copy-paste process. The actual address could end up sending cryptos to the wrong address.