Cryptocurrency is popular lately because of Bitcoin’s price surge. Bitcoin is the most valuable ‘crypto’ nowadays, enticing investors to diversify their portfolio by investing in it. Sadly, some of them put their investment in these currencies without even studying how they work and the risks they may encounter.
Aside from the volatility of a cryptocurrency’s price, many factors might also put your investment at risk. One factor is digital thieves every investor must be wary of. Cyberattackers are everywhere, ready to prowl on their unsuspecting victim when the chance arises.
But this shouldn’t discourage you from investing in crypto because it can be avoided. You simply need an in-depth understanding of what cryptocurrency is and how it works.
What Is Cryptocurrency?
Cryptocurrency is a digital currency that uses blockchain technology, which allows its transactions to get recorded. Once a transaction is recorded, it gets viewable by the public and no one can alter it. Also, a cryptocurrency wallet is where investors keep their cryptos, which works similarly to the physical wallet or bank account for fiat money.
Ways To Keep Your Cryptocurrency Safe
Now that you already have an understanding of cryptocurrency basics, you must consider doing these practices to secure your investment:
- Include Your Cryptocurrency Investment In Your Estate Plan
Since cryptocurrency investment is digital, only you will know how much money you have in your asset. Unlike physical investments which provide beneficiaries knowledge on how much will be left when you die, cryptocurrency provides privacy on these matters unless you waive it yourself.
Sadly, if you weren’t able to include your crypto in your estate plan and no one knows you’ve invested in it, your investment will be buried with you as well.
2. Set Up Strong Passwords
Whether you’re using a cold wallet or a mobile app for your cryptocurrency investment, setting up strong passwords is highly recommended. Also, remember not to use the same passwords on all of your wallets because this increases the risk of being hacked by cybercriminals once they get access to only one of them.
You should also utilize two-factor authentication and password rotation as much as possible. Additionally, remember to store all of your login credentials in the most secure way that will allow you to access them conveniently as well.
Keep in mind that once you lost any of your private keys and password, you’ll no longer be able to access your accounts forever.
3. Use Trusted Cryptocurrency Wallet, Mobile Applications, And Brokerages
Although cryptocurrency uses secure technology hackers won’t be able to easily manipulate, keeping cryptocurrency in a safe place is still an ongoing concern by most investors. Most investors keep their cryptocurrency in a mobile wallet application, but these applications might not be as safe as you think.
There are instances when investors lose all of their cryptocurrency after they’ve downloaded a fake mobile wallet app. Therefore, it’s important to only download a trusted app to get your investments secured. To do this, you may check reviews of the application and the numbers of users who downloaded the application.
If these aren’t for you, get a cold wallet instead. Cold wallets are a cryptocurrency’s physical storage. They look like flash drives that can be accessed using secure private keys and passwords set by the owner.
Meanwhile, if you’re keeping your cryptocurrency investments in trading platforms, you have to be aware of how risky it is. Trading platforms provided by cryptocurrency brokerages had experienced and reported numerous hacking instances. Unfortunately, some victims were driven to bankruptcy after their cryptocurrencies got stolen.
If you prefer to keep your cryptocurrency on trading platforms for easy conversion, make sure the brokerage of the platform is a reputable one. You may check their history online and read how they manage hacker attempts. You can also check how many years they’ve been in operation, since being in the industry for a long time means they can properly address such attempts.
4. Protect Your Private Keys
Private keys are one of the required information to have access to a cryptocurrency wallet. They are generated together with your wallet address once you created an account. It’s a long combination of numbers, letters, and other characters that are unique to everyone.
The most recommended way of storing it is through printing it out on paper. It removes the risks associated with saving it digitally or leaving digital traces online. For example, if you copy your private key and send it either to your e-mail address or to any of your messaging applications in social media, you can expect that cyber attackers will attempt to access your crypto investments.
Remember that cunning and devious people are everywhere, including the internet. The last thing you want to happen is for them to have access to any of your accounts. Therefore, never leave a digital trace of any of your account credentials.
- Avoid Accessing Your Account Using Public Wi-Fi
If you travel a lot and like to use public Wi-Fi networks, you have to keep in mind those aren’t safe. Hackers might be able to access your private online data with public networks. Thus, resist the temptation of accessing your account or online wallets while connected to public Wi-Fi.
In case you’re the only connectivity available is through public Wi-Fi, see to it that you browse the web with a Virtual Private Network (VPN) to encrypt your identity.
Cryptocurrency investing can be profitable only if you know how to keep it safe. Therefore, protecting your crypto investment is just as important as protecting your other assets. Before jumping into this investment, make sure you understand how it works.
Start by including it in your estate plan. Don’t trust crypto brokerages or mobile wallet providers unless they’re reputable. Using one password in all of your accounts isn’t also recommended. You can also print it out together with your private keys so it’ll be more secure. Lastly, free and public internet saves you a lot of money, but you might also lose everything if you try to access your crypto accounts using it.
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