Anyone who’s been in crypto for any length of time will tell you that security is of the utmost importance. Due to being decentralized, users of cryptocurrencies have to prioritize privacy and security themselves as the traditional support systems we’re used to in centralized systems, like banking and credit cards, don’t exist. We’re responsible for our own wealth within a decentralized system and there’s no customer support center we can call if we get hacked or stolen from. If we don’t properly secure our assets then we’re doing ourselves a major disservice.
In this episode, we’re going to talk about the options available to you as a crypto user in order to properly protect ourselves and secure our assets for the future.
These are one of the first and most common ways people secure their assets. It’s a way to securely store crypto offline. Bitaddress is one such way and for long term storage these paper wallets are great options.
These “cold” wallet options are among the safest however come with their own drawbacks for anyone looking to actively trade on a regular basis. If you’re planning to day trade or spend your crypto then these paper wallets aren’t the best option however if you’re long on crypto and want to just “hodl” then these offline wallet are the way to go.
These hardware wallets have really become the standard within the blockchain space. Companies like Ledger and Trezor are both economical and secure options. These devices store your cryptocurrencies offline while also offering the ability to interact with your assets through third party plugins like MetaMask.
A Ledger comes with a 24 word passphrase and for less than $100 you can have a secure, offline option that still gives you flexibility. These aren’t the only two options that play within the hardware space, there’s more than half a dozen options to choose from.
Online wallets, or mobile apps that secure crypto are convenient for consumers however add extra layers of risk by opening the door for phishing attacks. These can come from texts, social media platforms, emails or third-party messaging platforms. Wallets hosted by providers are considered the option that carries the most risk. You’re essentially letting a private company store your private keys on their servers. This is a big no-no in crypto land and thus should be the last option you choose to store your cryptocurrency.
These options are good for users who are moving smaller amounts of crypto and shouldn’t be considered the best options for long term storage. Apps like Exodus and Mycelium and popular online wallet options.
Backup your passphrase — this is SUPER important but a general rule to security is don’t have a central point of failure. In other words, don’t just have one copy of your passphrase because if you lose it you won’t be able to access your crypto.
Protect your assets for the long term — what happens to your crypto if something happens to you? Do you have a contingency plan so someone can access your assets if need be? Most people don’t think about this but you need to have a solution so that if you memorize your passphrase then die in a freak interpretive-dance routine, someone can still access the crypto.
Avoid sharing the key — this goes against what I said in the previous tip however as a general rule it’s best NOT to share your key. If you do, maybe you want to encrypt it further so that only you and your “backup buddy” know how to access the coins if necessary.
Avoid one central point of failure — don’t take a picture of your passphrase, any digital copy of it puts you at a higher risk of getting hacked. Don’t just keep your passphrase in your house. What if your house burns down? — your passphrase and crypto are as good as gone. Safety deposit boxes or vaults are popular choices for protecting your backed up passphrases.
Whatever you decide to do, make sure you give it some good thought. Only you can properly protect yourself so preparing for different scenarios are going to not only secure your assets but give you peace of mind.