Cryptocurrencies, as of today, control a vast majority of the financial sector, making them one of the most sought-after means of payment globally. Everyone wants to own cryptocurrency, irrespective of what type is available, and due to how saturated the crypto market is. However, if you log into any crypto exchange platform, you will find numerous digital currencies you can own.
Yet whether digital or physical, fiat currency differs significantly from cryptocurrencies, which is why crypto education is crucial. Getting cryptocurrency is more complex than fiat currency, as several factors affect its ownership. Due to its popularity now, you might be thinking of owning one for yourself.
The crypto industry is well saturated with options, so following the crypto recommendation in CryptoManiaks would be very beneficial. When you own crypto, keeping it safe and being able to access it becomes your main priority. Therefore, this crypto guide will show you how to store and secure your digital currencies safely.
Storing your Digital Currencies Using Crypto wallets
Where do you keep your fiat currency? Probably in a wallet. Well, the same goes for cryptocurrency. Bitcoin wallets store your public and private keys, enabling you to make Bitcoin transactions. The wallet doesn’t hold the Bitcoin as they are available in the blockchain ledger, which is well-encrypted, and hacking is impossible. However, it would be best to have a Bitcoin wallet to buy, sell and trade your Bitcoin, hence its importance.
As the owner of a coin, its storage depends entirely on you, and once you lose access to your currency, there is a high chance it’s gone forever. There are various options for storing your crypto, each with its benefits.
● Custodial Wallet
A custodial wallet is a go-to option used by crypto exchange platforms. When you buy any cryptocurrency, either Bitcoin, Litecoin, or Ethereum, on a Bitcoin exchange, it is usually available in a custodial wallet managed and controlled by them. It means they are holding the crypto for you, and to access the coin, you need to create an account with them. Hence, they are a third-party application that saves your cash for you and safeguards them for you.
You can also decide to transfer your crypto to your wallet if you want, but this decision depends on the wallet maker you are using. Some only allow you to buy and sell your coins, but not to transfer them.
However, many prefer operating a custodial wallet because of its convenience; It only requires a little work from you. Therefore, with this storage type, you don’t need to worry about losing your crypto wallet as long as you know your account login details.
● Non-Custodial Wallet
A non-custodial wallet is quite the opposite of a custodial wallet. In this type, only you have access, as no one else is involved in storing your coin.
● Hardware Wallet
This wallet is the most common type of cold wallet storage; it is a means of storing your crypto offline. The devices, either a pen drive, flash drive, or any other form of external storage configured to store crypto.
The coins are stored offline except when connected to an internet-enabled computer to send or buy crypto. In addition, the most common type of hard wallet you can find in the industry is Bitcoins. Also, they are considered one of the safest means of storing Bitcoin but a very expensive.
● Paper Wallet
A paper wallet is another type of cold wallet storage very similar to a hardware wallet, but it’s less expensive. A paper wallet involves printing your private and public keys as a string of characters or as a scannable QR code. From the keys, you can send and receive Bitcoin. To send Bitcoin from your wallet, you must scan the QR of your public and private keys.
Out of all the cold wallet means of storing your Bitcoin, a paper wallet is the cheapest. They provide the same benefits as the hardware wallet at a much lower cost.
Securing your Digital Currencies on Crypto Wallets
Knowing ways to safeguard your Bitcoin is a vital lesson every Bitcoin enthusiast should learn. Furthermore, it is an essential aspect of your Bitcoin education because cryptocurrencies are unlike fiat currencies; you can easily trace them. Therefore, it is best to tick all the boxes regarding the safety of your coin. Listed below are some ways of securing your digital currencies.
● Choose a Cold wallet Storage method
As we said earlier, cold wallet storage is one of the safest means of securing your cryptocurrencies. Since it is an offline storage method, it is safe from hackers. However, you have to be extremely careful with your storage device; if you lose it, your Bitcoin might be gone forever, as there is no such thing as a recovery option.
● Enable 2 Factor Authentication (2FA)
Adding an extra layer of security to your Bitcoin wallet won’t cause you any harm. A 2FA prevents external parties from accessing your Bitcoin wallet without your knowledge. For example, if anyone tries to log in, you usually receive a mail or a text with a confirmation code. So with this confirmation code, they can access your account. Therefore, you must enable 2-factor authentication in your Bitcoin-related operations.
● Change your Passwords Frequently
Your Bitcoin wallet password must be unique; it is unavailable for any account or site. It should be a strong password and should be random. The method that hackers use to try to log into your account is to utilize passwords that you have previously used for other profiles on your device. Moreover, most millennials fall into this category and often fall victim to these hackers.
● Avoid Public Wifi
When accessing your Bitcoin wallet, avoid doing so via public Wi-Fi. It is perilous because the system can install malware on your device. This situation then opens a backdoor into your device, which enables hackers to access your device and obtain information like your various account passwords, web history, and much more.