Crypto wallets are platforms and devices that offer storage systems for cryptocurrencies. As such, they are one of the most important tools in the crypto space. Wallet owners need to understand the importance of keeping their wallets secure, as they are basically the vaults where they funds are stored.
The vulnerability of crypto wallets can be exploited by cyber criminals which are at the moment one of the major issues plaguing the crypto space. Therefore, keeping your wallets secure is a most fundamental requirement for a successful crypto experience.
Limited Exposure to Online Wallet Services
Online wallets like those on crypto exchanges provide traders quick access to their assets. As, such, they are able to capitalize on volatile price movements. However, utilizing online wallets to store cryptocurrencies has its drawbacks. Online wallets are vulnerable to security breaches. This has resulted in a series of high profile hacks which represents some of the major talking points in the crypto space. Coin holders are advised to utilize online wallets that offer two-factor authentication features or better still, switch to hardware wallets.
Otherwise, users are advised to adopt online wallets for temporal purposes, where funds can be allocated virtual only when a transaction is about to be carried out. This will immensely reduce the rate at which a user’s main wallet and coin reserve will be exposed to the internet.
Backing Up Crypto Wallets
Cases of theft, crash or loss of individual devices (smartphone or computer) cannot be ruled out. Therefore, it is imperative that crypto holders back up their wallets, as it makes lost wallets easy to recover. Users must however note that some wallets have inbuilt hidden private keys as such, backing up private keys only might not recover lost assets. As a result, backing up the entire wallet is more effective.
Wallet backups that are stored online are safer when encrypted as they are highly exposed to theft. In addition, backups stored on computers that are connected to the internet are susceptible to crypto malware. As such, encrypting crypto wallet backups cannot be overemphasized.
Crypto wallets must be well secure such that wallets will require adequate verification procedures for accessibility. A number of steps are recommended in order to ensure that wallet accessibility does not fall into the wrong hands.
Set a Strong Password
Wallet owners should set strong passwords that are not easy to crack. To do this, punctuation marks and numbers can be utilized when creating a password and the password should be long enough. However, users must strike a balance between creating and ‘undecodable’ password, and creating a password that they can remember. In most cases not being able to remember a password could be as good as losing ones funds completely. It is advised that a copy of the password be stored in a different but secure location in other to guard against loss due to a forgotten password.
Always Update Your Wallet’s Software
In order to stay ahead of the game, wallet providers engage in regular software updates. This is expected to put the platforms a step ahead of hackers and thieves. Therefore, wallet owners are expected to be up to date with the upgrades from their respective service providers in order to block any security loopholes.
Using a single password has its perks, however, the username and password security model most often does not guarantee optimal safety. As such, it is better to utilize wallets that offer a more sophisticated security model known as the multi-factor or the two-factor authentication system. This system implements another layer of protection to the wallet by providing a code that can only be accessed by wallet users. However, users are advised to choose a secondary verification device that cannot be easily compromised.
Ifeanyi Egede is an experienced and versatile blockchain technology and cryptocurrency content writer and researcher with tons of published works both online and in the print media. He has helped several startup companies grow their businesses in the blockchain and cryptocurrency space. Ifeanyi has close to a decade of writing experience, and when he is not writing, he spends time with his lovely wife, Tega and adorable daughter, Chimamanda.