Basics of keeping your crypto secure
Money is always targeted by thieves to rob you of your hard-earn riches and claim it as their own. Many companies and institutions have risen to find the most absolute way to protect them. Banks are the most successful so far but their system leaves much to be desired as their strict policies limit people’s freedom to use their own money.
Thus, cryptocurrencies were created to offer a system that is just as secure as banks but with better freedom for users. This is made possible by blockchain technology which sets the foundation of a decentralised system. The drawback to this network is that users are in charge of their own assets’ protection so here’s a quick guide on how to protect your cryptocurrencies.
The three factors that protect your assets
Your cryptocurrency’s protection falls at the hands of three basic factors. The first one is the wallet, the device or software that stores your virtual assets. You can only send or receive digital money through this platform’s interfaces and mechanisms. The second factor is the exchange, the site where you conduct exchanges to convert your crypto into another currency. You are the third factor because you have full control over your savings in this blockchain-based system.
How wallet developers protect your crypto
Wallets or ‘e-wallets’ can come from various developers and most of the best are free to use. They serve as both your bank and your payment system to all kinds of services like for Bitcoin sports betting, online shopping, and crypto trading. All of them serve the same functions but each one has different ways of executing their goals.
All of them have the same startup process of creating a seed code that only you should know. In any event that you lost the wallet or would like to move your account on a different device, all you have to do is input this seed. This code also works to link two wallets together so you can use the best features of both services.
Wallets, however, differ in terms of applications after the startup process. Some will let you control your cryptocurrencies by using the codes it generates for every transaction. It’s like a password but it changes every time it is used and only you, the person holding the wallet, will know that.
Another popular method is by keeping a unique stream of code as permanent as the seed key but works more like a signature for signing documents. This is the private key which the wallet protects using cryptography so nobody can hack it and wallets implement this technology differently.
Custodial wallets store your private keys on a cloud so you may recover your savings even after the actual device is stolen. A non-custodial wallet prepares for the opposite scenario as it lets your device keep the keys. This way, nobody can access your savings even if they managed to steal your password and attempt to log in from a different platform.
New types of wallets are developed everyday as software experts in cryptography always seek new ways to protect your assets. Their goal is to create a user-friendly secure system that makes cryptocurrency a better mode of payment than ever. Developers vary between centralised companies and communities of open-source software.
How exchanges protect your crypto
Exchanges are platforms for trading virtual assets like various kinds of cryptocurrencies. Centralised ones are able to support all kinds of crypto as long as there are enough investors interested in them. However, this poses risks to their clients as carelessly welcoming scam tokens could cost innocent traders valuable potential profit.
Companies that control exchanges are, therefore, responsible for ensuring that all assets that they put in their platform are legitimate for investors. Meaning that they should have secure backing and high demand. Exchanges are often the reference for viewing market prices of every crypto so they also protect traders from what could be non-profitable deals from outside the platform.
Exchanges also validate accounts that use their platform and they ensure that the assets go to the intended recipient after a successful exchange. They are targeted by hackers but they are also using cryptography to protect their network. If there is ever a breach in the system, the exchange’s developers can track the thieves and recover stolen assets in no time.
How you can protect your crypto
You are the most important line of defence for your cryptocurrency. Once thieves give up trying to break into security systems of wallets and exchanges, they will begin targeting you. They cannot breach your wallet but they can bait you into making a mistake.
Most thieves online resort to phishing schemes. It involves creating a link, website, or a prompt that is disguised as your wallet but inputting your login information will share it to the hacker. Alternatively, they can send malware to your device and take control of your wallet if you leave it logged in.
The best way to protect your device from getting these hacks is to use antivirus and to always log out of your wallet when you are not using them. You should also stay up to date with blogs or news about new styles of scams. Thieves can be very creative at manipulating innocent investors and the best way to avoid them is to only trust services that you have tried before.
If you want to use new services, then at least make sure that they are among the best in their industry and have a high profile online. For example, you should go to reviews websites for the best online bookmaker like Sportsbet if you are looking for a sports betting platform. As for free wallets, Coinbase Wallet and MetaMask are the top choices by most veteran traders.
The most dangerous scams that you should avoid are fake investments. This can vary between new styles of cryptocurrencies with visions to replace Bitcoin or the new popular non-fungible tokens (NFTs) that are actually stolen pictures. Con artists are great at manipulating the truth into favouring their schemes so always check the source of the idea or the promoted platform.
The best way to avoid scams is to conduct a background check on the person or party proposing the idea. If the asset seems promising, then take a step back and see its disadvantages from its competitors. Always remember that Bitcoin and Ethereum are unbeatable now thanks to their many uses as well as investments that rely on their market.