How do I safely handle Bitcoin and other Cryptos?
When it comes to cryptocurrencies, many only see the investment and the potential profit that can be made. But you should also pay attention to the necessary security – but this is often not that easy. Inexperienced traders and investors in particular are often the target of fraudsters and should pay a lot of attention to security.
In this article we therefore answer the most frequently asked questions about security and cryptocurrencies. With these 6 tips you can better protect your crypto investments and keep the risk as low as possible:
- Keep your crypto investments to yourself
A simple way to protect your crypto investments is to tell as few people as possible around you that you actually own cryptocurrencies.
Because the more information potential hackers get from you, the easier it will be to plan an attack on your Bitcoins or Ethereum tokens .
- Use hardware wallets for long-term storage
If you’ve never thought about your storage strategy before, now is the time. Because a safe place to store your cryptocurrencies is essential to thwart hackers.
Hardware wallets are particularly suitable for storing Bitcoin, Ethereum and other cryptos, because they make it possible to hold the currency physically in your home. Of course, a hardware wallet is not 100% secure either, which brings us to the next tip.
- Store you crypto in different locations to mitigate the risk of a total loss.
To keep the risk as low as possible, you should store your crypto investments in different locations and ideally also have backups. Many investors therefore distribute their assets over hardware wallets, software wallets and exchanges. This diversification is of course not a 100% guarantee of security, but at least protects you from total losses.%i
- Activate 2-factor logins for additional security
As with all other security-related applications, you should think about using 2-factor logins to protect your data. The login is not only secured through a user name or email address and password, but through an additional required verification.
This second verification step usually is your smartphone, on which you receive a one-time generated code via SMS. Hackers would not only have to have your access data, but also be able to access your smartphone – and that is a lot less likely than without a 2-factor login.
- Use a VPN on public networks
Many dangers for your cryptocurrencies lurk in public networks and WiFi connections. To protect you from this, you should always use a VPN, i.e. a Virtual Private Network, as your data could otherwise be intercepted and stolen by third parties.
By effectively encrypting your network connection, you can protect your Bitcoin, Ethereum and other cryptos effectively.
- Choose a trustworthy crypto exchange for your trades
Since crypto exchanges are not completely immune to hacker attacks either, you should choose the most trustworthy exchange possible for your trades. Crypto exchanges like Kraken and Binance have earned trust in the community through years of hard work. Even in times of crisis, the top dogs of the crypto exchanges have proven to be reliable partners.
Caution is required, especially with smaller exchanges. In order to keep the risk of fraud as low as possible, we recommend that you use the size of the exchange and its reputation in the community as a measure of trustworthiness.
If you still want to try a lesser known or newer exchange, you should first do your due diligence research on the operator. Use an email address that you do not use on any other platform and give out as little personal information as possible. In addition, you should test the exchange with smaller amounts before investing larger sums.
These 6 security tips for storing your cryptocurrencies should be a good basis for the effective protection of your cryptocurrencies.