How to keep your crypto assets safe
Cryptocurrency adoption is on the rise. More and more people are turning to cryptocurrencies as a container for a part of their assets. Many businesses now accept crypto payments. As crypto adoption rises so does the risks associated with losing your access to your assets. The more money you keep as cryptocurrencies the more the need to secure your assets. Hackers, scammers, and other bad actors are constantly trying to make new methods of defrauding unsuspecting people who want to use cryptocurrencies. In this environment it is of utmost importance to pay attention to the security of your assets and make sure that your money is not at risk of being stolen or lost. In this article I will be writing about how you can secure your crypto assets.
Keep most of your crypto assets in non-custodial wallets.
Many people use crypto exchanges to trade cryptocurrencies. Crypto exchanges usually require users to transfer their crypto assets to the custodial wallets provided by the exchange. The prominent exchanges support hundreds of different cryptocurrencies, which makes them a good place for those who want to exchange in many different coins. However, the wallets provided by crypto exchanges aren't as safe as non-custodial wallets whose private keys only you own. It is important to keep all of your crypto assets that you don't want to exchange in non-custodial wallets. You should keep your private keys to these non-custodial wallets in a safe place because if you lose the keys you will not be able to access the crypto contained within the wallets.
Keeping your crypto in non-custodial wallets compared to keeping them in exchanges
While it might be easier for beginners to keep their crypto assets in an exchange it is very important to avoid doing that. Of course some assets need to be in the exchange so that you can exchange crypto. However, the amount of crypto that you don't want to exchange soon should be transferred to safe non-custodial wallets. Exchanges usually ask you for your email address to make your account for you. You secure your account with a password. While passwords are secure to some extent the security provided by a non-custodial wallet is orders of magnitude higher than that of a password. Non-custodial wallets are secured by seed phrases which are extremely secure. Furthermore, if you don't own the private keys to the wallets where you keep your assets, as is the case when you use exchanges, you don't really own your crypto. The exchange gives you the right to manage your assets but they own the private keys themselves. This can lead to some problems when the exchange is attacked by hackers or when mistakes happen.
How to use non-custodial wallets
If you decide to keep your crypto assets in non-custodial wallets you should make yourself familiar with them. Non-custodial wallets are very easy to use. You just download their softwares to your phone or PC and start making a new wallet. They give you a seed phrase that you keep somewhere secure because if you lose it you will not be able to access your crypto assets in that wallet. A seed phrase is a list of 12 or 24 words that is associated with your private key. Never disclose your seed phrase to anyone. Hackers and scammers usually ask you to show them your seed phrases. You should never do that under any circumstances. If you think that someone other than you has gained access to your seed phrase you should transfer all the assets in the compromised wallet to a secure wallet immediately.
How to keep your seed phrases safe
It is important to write down your seed phrases on a piece of paper and keep it in a secure place. Storing the seed phrases in digital form when they are not encrypted is not recommended as this can compromise the security of your crypto assets. If you want to store your seed phrases digitally you can use secure password vaults that keep data within them encrypted. These password vaults are usually secured by a master password that you should remember or keep in a safe place.
Don't put all your crypto assets in just one wallet
Divide your crypto assets into several small amounts that you keep in separate non-custodial wallets. This way you won't have to worry about losing all your money if you lose the seed phrase of one wallet. Depending on how much crypto money you have you can decide on how many wallets you need.
Be careful with wallet apps on your smartphone
Many leading non-custodial wallets provide the users with the option of installing the wallets on your smartphone in the form of applications. These wallets are usually available for both Android an iOS. The problem that you might face when installing these apps on your smartphone is that they might expose your private keys to unauthorized access. While many of these apps are safe if handled carefully some people might be at risk of losing their assets when using them. The problem is that these wallets are as safe as your phone. If someone steals your phone they can open the wallet and send all the crypto in them to their wallets. I recommend keeping your main wallets only on your PC and having wallets containing smaller amounts of cryptocurrency in your smartphone. These wallets with less crypto are useful for day-to-day transactions that you might need to make while most of your crypto assets are safely kept in other wallets that you don't keep on your smartphone.
Keeping your crypto assets secure involves paying attention to how you handle your wallets. While it is impossible to eliminate the risk of losing your assets I am sure that if you follow the instructions laid out in this article you can be pretty sure that your crypto assets will be safe. The most important thing to remember is that you should never disclose your seed phrases to anyone and you should make sure that you have access to your seed phrases. If you do this you can be sure that your crypto assets are at least as safe as your fiat money if not much more.