Securing Your Cryptocurrency Wallet: Essential Tips for Protection

Crypto wallets are recommended to anyone who is investing in a large amount of cryptocurrency. They provide you with a place to store your crypto when not in use and allow you to access your coins whenever you need them. However, simply depositing your crypto into your wallet is not enough to keep it 100% secure. There are measures that you need to carry out to safeguard your digital investments from hackers. 

When discussing the best types of crypto to buy, Kane Pepi states that the security of the coin is the most important factor. He also states that each coin you invest in should have robust security measures in place. This approach should extend to your selection and usage of your crypto wallet. 

In this guide, we’ll discuss essential tips for protecting your cryptocurrency wallet. 

Identifying a cryptocurrency wallet attack 

As much as it's important to protect your wallet from attacks, it’s just as vital that you recognize the signs of a crypto wallet breach. Just like most digital assets and data, your crypto wallet can be compromised by phishing, malware, brute force attacks, and exchange hacks. 

Sometimes, hackers will email targets and pose as crypto wallet maintenance service providers. Once they’ve tricked the recipient into believing them, they’ll elicit personal information from the victim and gain access to their crypto wallet. Once infiltrated, they will steal your personal information, edit your details, and spend or transfer your crypto savings. 

Alternatively, hackers can gain access to your wallet by infecting your computer with malware. Or, they can guess your passwords and private keys to successfully log into your account. 

Once they’ve gained access to your wallet, they’ll start leaving behind signs of their presence that you should look out for. The main sign is the depletion of your crypto funds. If your balance is different from the last time you checked or if there are numerous transactions that you don’t recognize, chances are your wallet has been hacked. 

Alternatively, if there are any modifications to your security features that you don’t remember implementing, a hacker may be attempting to block you out of your own account. Lastly, your wallet provider should provide you with updates if your wallet has been accessed by an unfamiliar device or if several failed login attempts have been made. These warnings should never be ignored and always be investigated. 

How to secure your crypto wallet 

To avoid wallet breaches from occurring in the first place (or, to prevent from from happening again), you should practice the following tips: 

Choose the right wallet type 

Not all cryptocurrency wallets are created equal. Hardware wallets - also known as ‘cold wallets’ - are widely considered to be the best wallet type in terms of security. They’re cold in the sense that they’re stored offline, which protects them from any and all online threats. On top of being offline, these wallets also feature multiple layers of encryption, which ensures your data is safe and secure. 

Hardware wallets are undeniably the best option for experienced crypto investors who are investing in the long run. However, they’re also more complicated to use than online wallets. Once your crypto is stored in a cold wallet, you regularly have to back up your seed phrase and other data in order to avoid permanent data loss. Hardware wallet processes may be off-putting for new investors who only plan on investing a small amount. 

Software wallets - also known as hot wallets - are popular due to their relative ease of use. They generally come with less complicated processes than cold wallets, making them ideal for beginners who are looking to store their minor crypto investment. However, they’re susceptible to malware and cyberattacks where cold wallets aren’t. 

Password protection 

As with all personal accounts, you must choose a strong and unique password for your crypto wallet. Otherwise, crypto hackers may be able to infiltrate it through simple guesswork.

Weak passwords are one of the main causes of cyberattacks. A recent study by GoodFirms found that 30% of people had experienced a security breach as a result of poor password selection. 

Ideally, you should choose a randomized series of numbers, letters, and symbols. At the very least, you should avoid passwords that you’ve used on other accounts or passwords that feature your name, address, likes, and interests, or any other word that could be associated with you. 

Once you’ve created the unique password, you should keep it stored offline. While tools like LastPass are convenient for helping you remember complicated passwords, they can easily be hacked. Therefore, you should write your passwords out with pen and paper. This way, hackers will not be able to uncover your passcodes via the internet. 

Lastly, you should set up password protection measures. Your chosen crypto wallet should come with two-factor authentication (2FA) technology by default. This will allow you to verify each login attempt on a secondary device, which significantly reduces the risk of another party gaining access to your account. 

Be vigilant of scams 

Be wary of all emails you receive from your crypto wallet provider. Whenever you receive an email from them, make sure to verify the email to check its legitimacy before acting on anything. 

As always, you should be cautious when receiving random links from unknown sources. If you’re unsure, you can copy and paste the link into Google’s URL checker to assess the safety of the link. 

By doing so, you can safely avoid clicking on any malware or phishing links that could put your crypto wallet at risk. A total of 94% of all malware is delivered via email - so, be very careful. 

Keep your software updated 

Regardless of whether you opt for a hot or cold wallet, you must regularly update it. Failing to do so could result in you missing the latest security features, which could lead to your wallet being compromised. As soon as you receive a notification informing you that a new version of your wallet is available, you should update it promptly. 

Wallet providers normally create a new version of their product whenever a new cyber threat emerges. To safeguard yourself against the new threat, update ASAP. 

Final thoughts 

Crypto wallets allow you to store, send, receive, and spend cryptocurrency. They’re vital for keeping your crypto safe, but only if used correctly. They’re often targeted by hackers who infiltrate them to steal and spend your crypto savings. This can be avoided by selecting an offline wallet, by selecting a strong password, by staying vigilant of scams, and keeping your wallet software up-to-date.