Lately, cryptocurrencies have been surging in popularity. But what is responsible for this sudden boom? Cryptocurrency does not use banks for verifying transactions but relies on blockchain technology. This technology uses a peer-to-peer system when a transfer is done from the sender to the recipient. Transactional data is protected through encryption and confirms the validity of the transaction.
This makes it difficult to hack because there is no centralized place for storing data in addition to being encrypted. While the blockchain technology is extremely secure, your digital assets need to be stored in a reliable wallet as well. These wallets are prone to cyberattacks, posing a risk to your funds. Therefore, we will discuss how you can protect your cryptocurrency wallet from hackers.
What Is a Crypto Wallet, and How Does it Work?
A crypto wallet is a digital wallet that stores your cryptocurrency. It helps keep track of the encryption keys that are used to digitally sign transactions and also stores the address on a blockchain where a particular asset resides. There are a lot of crypto wallets in the market, but it is essential to choose a secure, reliable, and easy-to-use wallet.
Types of Crypto Wallets
To store cryptocurrencies, the first step is to choose the right cryptocurrency wallet. There are majorly two categories of crypto wallets, which are given below.
1. Hot wallets
A hot wallet is a digital wallet that is always connected to the Internet. They are available online or on your smartphone for constant access. What makes hot wallets popular is that they can be availed at low prices, and conveniently. The drawback to this wallet is that it is highly susceptible to cyber-attacks since it is constantly online.
2. Hot wallets
A cold wallet is designed for cold storage as they store crypto-tokens in offline mode and provide improved security. You can receive funds anytime, but only sign the transaction with your private key once the cold wallet is disconnected from the network. Cold wallets include portable devices like USB flash drives, other external devices, and paper wallets wherein your private key and public address are printed out on a piece of paper.
Tips to Protect Your Crypto Wallet.
Crypto wallets are one of the best options to secure your cryptocurrencies. Here are a few tips to help protect your wallet from malicious activities.
1. Use a password manager
The private keys that grant you access to your crypto wallet can be challenging to remember. With a reliable password manager, you can store and retrieve your code easily.
2. Download a VPN
A VPN (Virtual Private Network) is another great way to strengthen your security. A VPN can encrypt your online connection and block hackers from targeting your cryptocurrencies. Many crypto traders use this trick to ensure their anonymity online as well.
3. Distribute among wallets
Keeping some amount of cryptocurrency in your offline wallet or cold storage can keep hackers away. Your funds would be safely stored on a hard drive, USB, or paper and out of hackers’ reach. You can store some funds in digital wallets for easier access.
4. Two-factor authentication
Rather than using one password to access your crypto wallet, two-factor authentication enhances your security as it requires an additional code. This code can be sent to your phone or email and is valid for a limited period.
5. Avoid installing remote-access software
Having certain remote-access software can overwrite safety precautions and give hackers access to your entire system. Therefore, you should avoid installing software that can gain access to your private keys.
6. Check auto-updates for wallets
Crypto wallets are periodically updated to keep an eye on the latest security threats. Failing to update your wallet may expose your funds. This is why you should closely monitor desktop and mobile wallets for new releases.
7. Beware of phishing
Many hackers use highly tempting phishing ads to encourage users to click on them and automatically install malware on your system. It can be difficult to distinguish between safe and malware-infected ads, so you can consider installing ad blockers and beware at all times.
8. Keep track of the latest developments
Tracking and filtering important cryptocurrency news is a big task but highly important. You need to constantly monitor the news that could affect your crypto wallets.
The Top Crypto Wallets to Look out for
Cryptocurrencies cannot be stored anywhere except in crypto wallets. Here is a handpicked list of top crypto wallets that are easy to use, reliable, secure, and fast.
1. Coinbase
Type of wallet: Hot Wallet
The Coinbase platform is an exchange cum secure wallet for crypto traders. Coinbase makes buying, selling, and storing cryptocurrencies seamless. The Coinbase trading accounts offer 62 different tradable cryptocurrencies, while some coins can help you earn interest.
2. Trezor
Type of wallet: Cold Wallet
The Trezor wallet is a device that can safely store your digital coins offline. It plugs into your computer or smartphone. Multi-factor authentication is offered by Trazor One, and it supports more than 1000 digital coins.
3. SoFi
Type of wallet: Hot Wallet
SoFi offers users a secure wallet and an exchange to buy and sell crypto. SoFi supports only four currencies – Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. It offers a great user experience and works well for crypto beginners.
4. Ledger
Type of wallet: Cold Wallet
The Ledger Nano X and Ledger Nano S are hardware wallets about the size of a USB flash drive that connects to your phone or computer to store and access your digital assets. It supports over 1800 digital coins and tokens.
5. Robinhood
Type of wallet: Hot Wallet
Robinhood has a wallet offering as well as an exchange, so you can have everything in one place. It is completely free to use, and there are no commissions when buying or selling Bitcoin and six other supported cryptocurrencies.
6. Mycelium
Type of wallet: Cold Wallet
Mycelium works best for experienced crypto enthusiasts as it offers features like QR code-based payments, offline storage, and control over private keys. It also offers secure online accounts that work with hardware wallets and Glidera exchange API that features other integrations.
Closing Thoughts
Cryptocurrency investments are on the rise, as hoards of investors are looking to generate consistent and substantial returns from the crypto market. Much like any other financial asset, crypto investments too, come with risks and challenges you need to be aware of. However, with technology coming into play, it is crucial to secure your cryptocurrencies with a secure and extremely reliable wallet. Before you invest your funds anywhere, make sure you do a thorough analysis of the platform you wish to choose.
It is important to buy and hold crypto securely, but if you want to generate consistent returns, you can invest in expert trading strategies through automated trading bots and sleep while you trade with Mudrex. Mudrex does the work right from the exchange through API keys and does not require any withdrawal permissions. With Mudrex, you can invest in 100% automated trading bots created by expert traders with total security and reliability, giving you peace of mind. It is safe to say, Mudrex is the high-performing automated trading platform you are looking for.
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