Crypto investments are rising, not gradually but substantially, and can even turn exponentially. In fact, the crypto industry has grown at a stellar pace post-COVID pandemic with multiple developments in various fields from legislation to technology and even adoption. Also, many people realized the simplicity of using crypto as it only required an internet connection without any documentation.
However, with the growth of crypto, scammers and hackers found a new ground to cheat users, especially the new ones. Developing dirty tricks so that these users fall prey to hacks and thefts has grown quite remarkably, unfortunately. A reason for that is the inherent architecture of crypto.
Cryptocurrencies have a big focus on privacy. While this sounds good, it is counterintuitive that scammers can easily get away with their nefarious acts. Moreover, with the lack of required legislation, they don’t even get penalized for it in most cases.
So, while learning about crypto, one must know the methods to keep their crypto investments safe. Today, we’ll talk about some of the ways you can keep your crypto investments safe.
Always use multiple authentication methods
Traditionally, users created a single password for accessing their systems. However, with such massive growth in computing power, hackers can ‘brute-force’ to gain unwanted access to the system. Moreover, traditional safety systems can’t keep up with the new technology profound with this growth of computational power. Similarly, having a single password for your crypto account is a very compromised situation.
However, having multiple authentication methods like 2-factor authentication (which requires an OTP from the registered mobile number or email address) or an authenticator app (a system that generates random numbers which can only unlock the account at that specific moment) can substantially secure your accounts from hackers.
Diversify your portfolio
This also stands for equity markets. It’s always better to split your portfolio into various commodities rather than focusing on a single one. In fact, given the high levels of volatility in the crypto market, it’s a must to avoid substantial potential losses.
It’s also better to have a good intersection of everything that the market has to offer. By doing so, you’ve made promising investments in all the market’s top players, thereby increasing your chances of making a decent return on investment.
Backup your private keys
Crypto wallets have two keys: public and private. Both have their own objectives and are equally important for your crypto wallet. A public key allows the sender to send crypto to your wallet. On the other hand, A private key allows you to access your wallet. Therefore, it’s a wise choice to keep your passwords at a safe location so that nobody can easily gain access to it.
Moreover, if you have a significant number of crypto holdings, having a hard copy of your private keys could be a good idea. This is because a hard copy always guarantees access to your crypto wallet, unlike a soft copy.
Cold wallets (offline wallets)
Users can store crypto in basically two types of wallets: Hot or Cold. Hot wallets are used by crypto exchanges and have centralized storage for that. On the other hand, a cold wallet is a standalone system that users can operate through multiple ways like desktop, mobile or specifically dedicated hardware.
Since most hot wallets have a single storage location, the possibility of a hacker attack increases multifold. Moreover, since hot wallets are on the internet, one can always expect some mischief even if the system ‘boasts’ its security credentials.
It’s better and a more foolproof way to store your crypto on a cold wallet. Moreover, users can operate them without any internet connection, which dramatically lowers the chances of theft.