Security for our crypto wallets has never been this important as cryptocurrencies like ethereum and bitcoin have started making the news.
Here’s a helpful guide so you can make sure your cryptocurrencies are well protected.I bet you’re here on this page because you’ve joined this growing market with the purpose of trading or just leaving some amount there and find it multiplied after a few years. This is for you — to help readers like you learn to store your cryptocurrencies safely. But we want to give others a chance to understand what we’re talking about to allow more people to learn.The first thing you should realize when it comes to crypto security is that no one else but you are accountable for your cryptocurrencies. What do you call that item where do you keep your cryptocurrencies? It’s your cryptocurrency wallet. It’s a virtual wallet from which you send and receive different cryptocurrencies. As opposed to an actual, physical wallet, this virtual one keeps keys, both public and private, that helps you transact.
Let’s put definition on the terms public and private keys. To understand keys in the cryptocurrency world, think of a bank account. Everyone can send or transfer money into it. However, to take the money out, one needs the pin codes. Not everyone can take money out. It is only the owner who has the key to it.Here, the bank account is the public location anyone uses if they wish to send their money to you. The sender holds the private key which will be given to you, the account holder or owner, so you can access your currency.
The public key is the information through which everyone can send money to you, while the private key is the information through which you send money. Important reminder: never share your private key, or else anyone can access your wallet and use your money to send to other locations.Never lose your private key. If you lose it, you’ll be in very big trouble! Later in this article, I’ll share ways for you to secure your private keys. Now, let’s talk about the ways to keep your cryptos–hot storage and cold storage.Hot storage is like a wallet you have in your back pocket or bag. You have it with you everywhere. While cold storage is equivalent to your savings bank account.
You want to use your hot storage if you prefer to transact with your cryptos more often. On the contrary, you want to use your cold storage if you plan to keep your currency for a longer period of time.What makes hot storage, “hot”? When you store your currency in a gadget that has a connection to the internet, this kind of connection makes the storage hot. Any wallet in a device which can hook on the internet like mobile wallets or exchange wallets, that makes it easy for you to access your currency. One way you can use it is to pay for day-to-day needs if you are in a location that takes cryptocurrency for transactions. Wouldn’t it make life easier to pay using only your phone? But treat your hot storage like your wallet in the real world.
It should carry just the right amount of petty cash you need for the day or the week to have it at arms reach. Literally.Benefits of hot storage:Quick and easy access to your fundsEasy-to-use UIs simplify sending and receivingWider range of optionsSupport more devicesDisadvantages of hot storage:Cybercrime exposureWallet might get destroyed if device gets damagedCold storage is when your currency is stored in a device that is never connected to the internet.
This is what you go for when you’re looking to keep your cryptocurrencies secure. Cold storage fits holders who want to keep and won’t need their currencies for months, even years. It still has risks but these risks may be reduced by taking precautions, correctly following instructions.
Since cryptocurrency has taken the limelight in recent years, sophisticated attackers have also taken an interest. Still, it’s a safer way of keeping your currencies stored.Benefits of cold storage:Ideal for large coin amounts of longer time periodsAllows security versus hackersDisadvantages of cold storage:Still prone to theft or external damageDifficult for daily transactionsIntimidating to set upNow that you know these terms and their pros and cons, you can decide for yourself what suits your needs. You might find that keeping your coins in a virtual wallet easy to access more useful but the real deal for more security is storing your money in storage that will take a while to access. It boils down to your priorities.