Cryptocurrency is making headlines and it has become a significant part of our financial industry. With a fairly bullish last year and its ever-increasing value, it has become more important than ever to study more about how to protect your digital money against cybercrime and fraud.
Although the entire transaction and record keeping process is quite transparent and safe, there are still a few risks associated with this form of currency. These risks should never be ignored especially if you plan to hold your cryptocurrency holdings for a long-term.
Here are some of the security measures you can take to protect your cryptocurrency holdings.
Use two factor authentication
The idea is to make it as difficult as possible for hackers to hack into your digital wallet. A great way to ensure that is to use a two factor authentication system. By using this method, you basically add two layers of protection, which, for a common hacker, may not be possible to crack.
Use cold storage
It may sound like a warehouse term but cold storage is an extremely potent way to secure your digital wallet.
The method of storing your wallet information offline is called as cold storage. You can keep your information on a USB, a hard drive or it can even be printed out on a piece of paper (paper wallets) and kept it in a secure location. This form of storage is extremely important for cryptocurrency traders who fail to keep a traceable record of their private keys and other related details. And, as we know, when you lose your private keys you pretty much lose your digital wallet.
Private keys contain information that allows you to send your money to others; this key should only be known to you otherwise your wealth can be transferred by anyone who gets access to your private key.
Scatter your wealth
It is wise not to keep your digital money in one place especially if you have large holdings. It is highly recommended that you store your cryptocurrency with multiple and certified exchanges. This means if any of the location gets hacked, only a fraction of your wealth will sustain damage.
Use secure devices
The worst thing you can do to yourself is to access your wallet from a public computer. You should always use your own trusted device that is not on any network; yes, not even on your home network.
The ideal solution is to have a separate device that will be used for cryptocurrency only.
Manage your own wallet
If you are an individual who runs a small or a home-based business with relatively larger cryptocurrency holdings, you may be tempted to hire someone to manage your wallet for you. Avoid doing that!
Managing the wallet on your own may add to your burden but it can protect you from being robbed. Remember, keeping your private key confidential is the key to keeping your digital wealth safe.
Avoid using phone wallets
Phone wallets are convenient but they are also not that safe. Phone devices can be lost or stolen easily, which would give complete access to the person who gets a hold of your phone.
Never click on random cryptocurrency links
Many cryptocurrency links with irresistible offers may pop up on your screen; never click on those. These could be links designed to steal your details that could lead to your digital wallet. Only use the most trusted websites.
You must also stay away from random cryptocurrency platforms or discussion groups.