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Many people can't get enough sleep because they are bothered by the thought of how easily someone can steal their crypt. However, safe storage of your crypt is easier than it may seem at first glance - for example, you know what is crypto wallet? This guide will teach you how to safely store your cryptocurrency and get rid of worries - for example, it can help you sleep well. bitcoin wallet.
Getting a cryptocurrency is one thing, but safely storing it requires completely different skills and knowledge.
This tutorial will introduce you to various cryptocurrency wallets and wallet hardware, will teach you how to protect your resources, choose the right wallet and how to avoid the most common cryptocurrency threats.
What is a bitcoin wallet and what crypto wallet is right for you?
Crypto Wallet is a software program designed to store your public and private keys, send and receive digital currencies, balance monitoring, and communicate with various blockchains. Cryptocurrency wallets are needed to manage and secure your crypto assets.
There are many crypto wallets, but the main difference between them is whether they are hot or cold.
– Hot wallet is connected to the Internet and can be connected to it at any time.
– Cold wallet is not connected to the Internet and allows you to store your funds offline. You can still receive funds at any time, but no one else can send them away from your account.
To the category hot wallets These include all online cloud wallets, most mobile and software wallets and exchange offices.
Cold wallets There are hardware wallets, paper wallets held offline, USB and similar devices used to store data offline, and even physical items such as physical Bitcoins.
Most cryptocurrency holders use both cold and hot wallets. Hot wallets are suitable for frequent trading, while cold wallets are better for long-term holding of crypto assets.
Imagine various cryptocurrency wallets and hardware wallets
There are four main categories for cryptocurrency wallets: software (online), hardware, cloud and paper. Let's look at each of them separately.
Wallet software
The wallet software needs to be downloaded and installed on your computer or smartphone. These are hot wallets. Wallets for computers and mobile phones offer a high level of security; however, they cannot protect you from attacks and viruses, so you should do everything you can to keep your device free of malware. As a rule, mobile wallets are much smaller and simpler than computer wallets, but both types allow you to easily manage your funds. In addition, some wallet software allows you to access your resources from different devices at once, including smartphones, laptops and even using wallet hardware.
Wallet hardware
Unlike wallet software, wallet hardware stores your private keys on an external device such as USB. These wallets are completely cold and safe. You can also use them to make online payments. Some wallet hardware is compatible with the web interface and supports several different cryptocurrencies. They are designed to perform transactions easily and conveniently, so all you have to do is connect your wallet to any online device, unlock your wallet, send currency and confirm the transaction. Hardware wallets are considered the safest when it comes to safekeeping crypto assets. The only downside is that their use is not free.
Popular hardware wallets come from the companies:
Obtaining wallet hardware directly from the manufacturer is the safest way. It's not safe to buy them from other people, especially not those you don't know. Make sure that even if you get a hardware wallet from the manufacturer, you should always initialize and reset it yourself.
You might be interested in: Safe Wallet Reviews and Where to Buy (2022)
Choosing a wallet usually depends on your portfolio. Every serious project should have their own native wallet, which you can find on their official website, but sometimes it may be more convenient to buy a wallet that is compatible with multiple types of cryptocurrencies. Please note that not all wallets designed for more than one type of cryptocurrency will support all cryptocurrencies. Even hardware wallets have a limited number of coins to support. On the other hand, there is definitely no shortage of wallets for popular cryptocurrencies such as Bitcoin or Ethereum.
Also read: Ledger Nano X Review and Where to Buy Nano X (2022)
Once you get the (hardware) wallet for cryptocurrencies, you will also need to protect your private recovery seed phrase. One of the most reliable tools for protecting seed words is CryptoTag, which allows you to store phrases on virtually indestructible titanium plates. It is also offered Cryptosteel capsules from Ledger, or a plate made of steel plates, which will allow you to keep the password for seed recovery safe.
Cloud wallet
Online wallets are hot by nature. When using a cloud wallet, your funds are accessible from any computer, device or location. They are very convenient and practical, but they store your private keys online and can be controlled by third parties. They are therefore much more prone to attacks and theft. Popular cloud wallets include:
- Blockchain.info
- Coinbase
- Guard
- Metamask
A more secure version of cloud wallets is non-custodial online wallet. They are available through the web and applications, but the service provider does not have access to your private keys. In most cases, non-treasury wallets are part of an exchange office platform, meaning that they allow you to trade your crypt in a secure manner. For example, non-manager cloud wallets offer:
Paper wallets
Paper wallets are generally classified as cold storage. The term "paper wallet" generally refers to a physical copy or hard copy of your public and private keys. In other cases, this means the software used to generate the key pair together with the digital file to print. Whichever way you choose, paper wallets provide you with a relatively high level of security. You can transfer your paper wallet to a software client or simply scan its QR code to transfer your funds.
If a paper wallet is available for the cryptocurrency of your choice, you will probably find instructions on how to make it on the project website or on the community website. MyEtherWallet is a universal way to make a paper wallet for Ethereum and all ERC-20 tokens. Use a generator Bitcoin paper wallet to generate a paper wallet for Bitcoin.
Even if paper wallets are cold, it comes with its own share of risk. For example, paper wallets can be easily damaged, burned, easily copied or photographed, and require mutual trust if you do not make your own. Sometimes people try to adjust paper wallets to make them less prone to damage. It is possible to laminate them, make several copies and store each in a different place, or engrave them into a piece of metal or other material, etc.
Please note that it is not a good idea to keep electronic copies of your paper wallets on your computer. Paper wallet private keys should always be kept offline. Keeping your paper wallet files online means that they will be as secure as hot wallets.
Best security practices to prevent private key theft
You have decided to take control of your crypto assets and keep everything in your private wallet. Good work! But with great power comes a great responsibility, and now it all depends on your ability to keep your private keys private and secure.
The most common security procedures you should follow are:
- Do not keep the cryptocurrency at the exchange office for longer than necessary.
- Always enable the two-factor authentication (2FA) feature.
- If you opt for a hardware wallet, choose a pin code that is not easy to guess, and never put your 24-word recovery letter online.
- Don't brag about your crypto publicly under your own name or identifiable address. Some robbers can steal crypto resources even if you keep them in cold (offline) storage.
- Only trust what you see on the screen of your wallet hardware and verify all the information on the device.
- Assume that your devices can be infected at any time, so always approach your computer or smartphone screen with caution.
In addition to all this, we offer a few more tips that can help you minimize the chance of losing your crypt.
Use safety precautions that you can handle. Some people never feel safe and go to extremes when it comes to securing cryptocurrencies. However, they should not forget that they can lose the crypto also thanks to security tools. Losing access to an account, funds or wallet is as common as becoming a victim of a hacker attack. Don't complicate security unless you're an expert. Try to strike a good balance between complexity and safety.
HTTPS. Log in only to secure websites with a valid HTTPS certificate. Most legitimate sites have it. For added security, you can try installing the HTTPS Everywhere plugin in your browser.
Use a secure Wi-Fi connection. Never connect to your online wallet, currency exchange account or other critical security point via public Wifi. Even if you assume you are in a safe place, make sure that your Wifi access uses strong encryption, such as the WPA-2 protocol.
Two-factor verification. Always secure your accounts with 2FA. Whenever possible, use software or hardware 2FA tools, rather than SMS messages.
Divide your resources. Don't keep all your crypto assets in one place. The best way to approach this is to have one or more cold stores for long-term possession, and at least one hot wallet for trading and transactions.
Whitelisting of IP and selective addresses. If you have a static IP address, use it for your own safety. Make sure only you have access to your accounts and resources.
Double checking of crypto addresses. Some malicious programs can modify and copy the wrong transaction address whenever you submit your transaction. The new address usually belongs to the attacker. It is better to make sure than to regret it.
Beware of phishing sites. Whether you're connecting to a currency exchange or online wallet, make sure you sign in at the right address. Many fake websites imitate exchange offices solely for the purpose of stealing your access data. Always check that the website address is correct.
The art of keeping your cryptocurrencies safe is a critical skill you must master on your way to becoming your own bank. The sooner you learn it, the better.
Also read - What is a crypto exchange, a cryptocurrency exchange and how to choose a cryptocurrency exchange? (2022)
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