How To Keep Your Crypto Assets Safe
With the recent debacles of the FTX saga and reports of wallets hackings, we have to be acutely aware of how to keep our cryptocurrencies safe. Gone are the days when we can just leave our cryptos with exchanges and hope that they will always be there. If you’re unsure of how to keep your crypto safe, here are some steps that can help you get started.
As a starting base, you need to know the different types of wallets that are out there. In case you’d like to learn more about this, we’ve explained this in our previous articles here and here. Be sure to read them up first to get up to speed, as wallets play an integral part in how to keep your crypto safe.
Steps To Keep Your Crypto Safe — The Basics:
Don’t keep your cryptos at the exchanges.
We are sure you’ve heard of “Not Your Keys, Not Your Coins” or “Not Your Keys, Not Your Crypto” before. This saying stems from the belief that crypto holders cannot be sure that they own those funds unless it is stored in a wallet in which the holders personally have the keys. Most centralised exchanges hold on to the investors’ wallets and keys for them (normally you are given a wallet once you’re onboarded) which is also known as custodial wallets.
The risk of keeping your cryptos in this wallet is that the exchanges have full control over access to the funds in the wallets. Normally this is fine with trusted, reputable exchanges, however, as we have learned from what happened at FTX recently, even the biggest exchanges can be problematic if they run into a “liquidity crisis” and users could lose access to their wallets if these exchanges disallow it for whatever reason.
Use Non-Custodial Wallets
So where should you be keeping your crypto then? We’re big proponents of non-custodial wallets as users would have complete control over your private keys. You don’t have to worry about any third parties being involved hence no risk of these parties misusing your funds. There are two main types of non-custodial wallets, one is a hot wallet which are wallets that are connected to the internet through your computer or phone, a popular example of this wallet is Metamask. The other is a cold wallet which is a hardware device that keeps your data offline. It is best to use a combination of these wallets, depending on the different purposes of why you’re keeping the cryptos.
Include Usage of Cold Wallets
It is also a good idea to use a combination of both cold and hot wallets in order to create a secure and seamless experience of storing and using your crypto. As a general guide, it is recommended that you store the larger amounts of cryptocurrencies and, or, the cryptocurrencies that you don’t need to access often, in cold wallets.
Top Tips to Secure Your Crypto Against Hacks
Now that you know about the basics of where and how to store your cryptocurrencies, let’s dive into some tips that will help secure your crypto against hacks:
Use cold wallets
We’ve talked about this earlier and would like to emphasise this again. There might be a slight learning curve on how to use this but once you get the hang of it, it’s pretty straightforward to use. A reminder here, if you keep your funds in a cold wallet, make sure you don’t let anyone know the seed phrases, and also don’t make digital copies. If you do, it opens the way for potential hackers to access your seed phrases and eventually abscond with your crypto assets, hence defying the purpose of using cold wallets.
Keep your seed phrase in a safe place
The seed phrase is a collection of 12 to 24 random words generated by wallet services. You need to enter the seed phrase in the same exact sequence when you sign up. Keep the seed phrase in a safe place offline because if you lose the seed phrase, you will lose access to your wallet. Remember there is no “forgot password” option so make sure you don’t lose it!
Use Security Measures such as two-factor authentication (2FA)
2FA is an additional layer of security where a message or email is received whenever someone tries to log in. The person logging in would need a verification code which is given in this email and this additional step makes it a little more difficult for hackers to get access to your account. You should never share your 2FA code, also known as OTP (One Time Password), or any other verification code with anyone.
Constantly change your password and use a strong one
This might be common sense but sometimes common sense is not so common. Try not to use the same passwords for every device and login. A strong password should consist of a combination of alphabets, numbers and special characters in both lowercase and uppercase, with a minimum of 8 letters that are randomly generated. If it’s hard to remember, write it down and keep it in a safe place.
Be wary of cryptocurrency fraud through social media sites
There are so many frauds and scams happening everywhere including in the crypto sphere. It is always wise to do your own thorough research and to understand what you’re investing or buying in. These scams come in all sorts of unsuspecting ways and they could also be related to influencers or people posing to be the said influencers but are actually fraudsters. Usually, when it sounds too good to be true, more often than not, it is too good to be true.
Be on the lookout for phishing attacks
A phishing attack is when a hacker sends spoofed, fake or deceptive messages pretending to be from a trusted person or entity. An example would be if you received an email from your bank or crypto exchange asking you to reset your password and username. The website looks real but the link is not to the actual bank or exchange. Always ensure that the link is HTTPS and of the correct entity’s website.
Connect to Secure Internet
Public wifi areas are not secure hence you shouldn’t be using it to make banking or crypto transactions. If you do need to use public wifi, ensure that you have a proper VPN connection to protect you from people snooping on you and stealing your data.
Always double-check the wallet address of any recipient
You should always check the recipient’s wallet address twice before sending your crypto to another wallet as once a transaction is made, it can never be reversed on the blockchain. A wallet address is a string of alphanumeric and special characters which are between 26–35 characters long, which represents a user’s wallet. If you get the wallet address wrong, your crypto is most likely gone and unretrievable, so be extra vigilant when you’re transferring cryptos.
A lot to think about?
It might seem that there is a lot to do to keep your crypto assets safe, however, once you have everything set up and embed these good practices as a habit it will become standard procedure. It is a small price to pay to “be your own bank” and have full control over your assets. We at Paywong believe that keeping your cryptocurrencies safe will ensure that you can continue to reap the benefits of decentralised finance and use it as a better alternative to traditional finance.
With Paywong, anyone can accept crypto payments, including stablecoins, from anywhere in the world with low transaction fees, with or without a website. The startup is also working with a third-party off-ramp solution to allow its users to convert crypto to fiat in real-time. Paywong is a non-custodial crypto payment gateway that provides merchant services for businesses that cater to all kinds of customers. In addition, Paywong is also useful for individuals who are working as freelancers and want to get paid for their services in crypto via Paywong’s crypto invoicing service.
Paywong has launched a payment gateway that comes with an intuitive dashboard for managing funds, e-commerce integrations, and an invoicing system that generates a payment link that anyone can share. Book a demo to learn more, and you’ll be accepting cryptocurrency as payment from your customers in no time.
For more details and updates, check out the official website as well as Twitter, Linkedin, Facebook, Instagram, and Telegram portals.
About The Company
Paywong is a product of Walawong Solutions Pte Ltd — a Web3 startup based in Singapore. We are on a mission to simplify crypto payments for businesses by leveraging the power of blockchain technology.