How to Protect Your Cryptocurrency

When you amass some cryptocurrency, you must treat it like money. You don't leave $20 bills lying around, (and expect them to stay there). The same with crypto. If you have it, you need to protect it.

Your crypto can be in your own local wallet, one that you yourself maintain. Your crypto could be in an “exchange” wallet, one that acts like a bank account with an agency that implements security. There are basic security considerations that apply to both. There are also considerations that apply to each separately. This article is mainly generic in that the advice applies to any type of wallet.

Protect Your Assets

The ultimate responsibility for protection of your crypto falls on you. You must ensure that your wallet password is safe. You must ensure that your devices are safe. If you backup your wallet, you must protect your backup file as if it were your actual wallet. Remember that anyone who gets your wallet key, can control your wallet. If someone accesses your wallet, they can take your assets and you have absolutely no recourse. Funds sent are funds gone.

Backup Your Wallet

Computers and phones fail. They get damaged. They can be lost. With them, your crypto could be gone as well. Backup your wallet then protect your backup file. In many cases, the backup file will have its own password. Keep everything safe. Note that wallet backups do not apply to exchange wallets.

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Consider a Hardware Wallet

If you hold a substantial amount of crypto, you may want to consider purchasing a hardware wallet. These are typically devices that look and act like thumb drives but which have added security. There are physical buttons on them which must be used before they allow access to wallet keys. The main ones to consider are Ledger and Trezor.

If you buy a hardware wallet, be sure to order directly from the manufacturer. You do not want to obtain a hardware wallet from an alternate source since the device may have been compromised before you ever get it.

Follow the instructions that come with the hardware wallet. Keep the device safe. The exact steps used to protect your wallet are specific to the particular device that you buy. Each hardware wallet unit comes with an in-depth support manual, and the backing of the manufacturer.

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Beware of Thieves

Unfortunately, people will try to steal anything these days, including crypto. If you are online, you may be the target of crypto thieves. They will send you emails, or texts, asking for keys. They will send you emails asking for your information. They may try to convince you to send them Bitcoin in order to get service. 99.99% of the time, anyone asking for your crypto key is trying to steal your assets.

As crypto becomes more valuable, the thieves increase their attempts. They make them both harder to resist and more effective. There can be a substantial payoff for crypto thieves so they have an incentive to go after people's wallet, keys or crypto.

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Remain vigilant and consider the following:

  • Protect your wallet key
  • If someone sends you an attachment, it may be a malicious program that can take your crypto
  • If someone has access to your device, they may be able to install a malicious program that will search for your wallet key
  • If someone asks you for your wallet key, they are trying to steal from you, (99.99%+ of the time.)
  • Do not purchase a used hardware wallet
  • Do not purchase a hardware wallet from an unauthorized channel, even your brother-in-law
  • Make a wallet backup and protect it
  • Do not tell anyone what your quantity of crypto is. This is a guideline, of course, but if the wrong people know that you have a substantial sum, you may become a prime target.
  • Enable “Two Factor Authentication”, (“2FA”), whenever possible. This allows you to have both a password and a special code generated on your phone. This applies to exchange wallets, mainly.

Stay Safe!

The ultimate responsibility for protecting your cryptocurrency falls on you!

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