If you’re investing some of your spare cash into cryptocurrencies, it is crucial to keep your coins and tokens as secure as possible so that you do not lose them. Sometimes it can be easy to forget that digital assets are valuable, but they should be treated just as carefully as conventional cash held in a bank account.
Although decentralized systems, such as those used for the majority of cryptocurrencies, are considered more secure than centralized systems like those used by banks, the benefit of anonymity in the cryptocurrency industry makes it easier for hackers and scammers to steal digital assets without having to worry that their actions will be traced back to them.
With that in mind, we should always do our best to protect our cryptocurrency wallets and ensure that no one else can gain access to them. In this AAG Academy guide, we’ll cover a comprehensive list of tips on how to do just that — and look at why securing your cryptocurrency wallet is so important.
The cryptocurrency tokens you have sitting in your wallet today may be worth thousands of dollars, and even if they’re not right now, they could be one day. So, if you’ve invested just $20 of your hard-earned cash so far, why should someone else get to take that away from you? Keeping your cryptocurrency wallet secure minimizes the risk of that happening.
If you do lose access to your wallet, it can be incredibly difficult to get it back — especially if it’s a decentralized wallet, for which official support is unlikely to be available. There’s also a good chance that even if a wallet recovery is successful, any cryptocurrency assets you were holding onto will have already been transferred to (or stolen by) someone else.
It’s not difficult to increase your wallet’s security in an effort to prevent these things from happening, and it could save you a lot of trouble — and financial losses — so there’s no good reason why you shouldn’t.
How to secure your crypto wallet
In addition to ensuring that you never share your account details, seed phrase, or other login information with anyone, there are a number of other steps you can take to protect your cryptocurrency wallet and make it as secure as possible. The availability of the following options depends on the type of cryptocurrency wallet you’re using (centralized or decentralized), but taking advantage of as many as you can is recommended.
Use two-factor authentication If the cryptocurrency wallet you use supports two-factor authentication (2FA), then it’s the first security feature you should enable.
With 2FA activated, you will be prompted to submit a one-time access code after entering your login details when accessing your wallet. This code is usually sent by text message, and it ensures that even if someone else somehow gains access to your username and password, they still cannot log into your wallet without also having access to your smartphone.
Use an authenticator app Using an authenticator app is another form of two-factor authentication, except instead of having a one-time access code sent by text message, you generate it yourself. A number of authenticator apps are available today from the likes of Google and Microsoft, and you may already be using one for other services. If you’re not sure which one to pick, start by finding out which authentication apps your wallet supports.
Use complex passwords If you aren’t already using complex passwords for everything, you’re putting your most sensitive data at risk. Using a mix of uppercase and lowercase letters, numbers, symbols, and special characters in your passwords makes them more secure significantly more difficult to guess. And, just as importantly, never use the same password for different services.
Obviously it will be more difficult to remember complex passwords, but you can solve this problem by using a password manager. Most smartphones, computers, and web browsers now come with a password manager built-in, but plenty of excellent third-party options are also available. Check out 1Password, Dashlane, and NordPass.
Use a hardware wallet if possible Did you know that your cryptocurrency wallet doesn’t have to live on your smartphone or PC? The most secure cryptocurrency wallet is a hardware wallet. These device, which are a little bit like flash storage sticks that you can plug into your computer, hold all your digital assets and can be unplugged — and therefore disconnected from the internet — when they’re not in use. This makes them impossible to access without your knowledge.
Hardware wallets aren’t as convenient as software wallets, which may make them unsuitable for traders who want constant access to their assets no matter where they are. They can also be stolen or misplaced since they’re physical devices, which is something you’ll need to be conscious of. However, as long as you’re careful, hardware wallets can be much more secure.
Watch out for phishing emails Cryptocurrency’s incredible rise in popularity in recent years has also led to an increase in scams and hacks. One of the most common ways bad actors attempt to steal your login details is by using phishing emails and other phishing tactics. Phishing is when scammers pose as someone else — such as an employee of an exchange or an official support representative — in an effort to convince you to provide them with wallet passwords and seed phrases, or other personal information.
Never give this information to anyone who asks for it. If you require support, contact an exchange directly if possible, or use official community channels. You will never be asked for your password or seed phrase by someone who is genuine, so never provide it.
Use a VPN to make yourself anonymous online You can improve your online security by using a VPN (virtual private network), which routes your browsing traffic through different servers so that it cannot be traced back to you. This is a great way to not only conceal your online activities but also prevent others from intercepting your traffic data to steal personal information. A VPN is critical if you use public Wi-Fi networks, which are notoriously unsafe because they’re so easy to hack.
Popular VPNs include NordVPN, ExpressVPN, Surfshark, and ProtonVPN. Note that most VPNs do charge a fee for unlimited access, support for multiple devices, and the ability to pick different servers. However, ProtonVPN is one of the most generous free options, so if you’re on a tight budget, you may want to check that one out first.
Use the MetaOne wallet from AAG If you want your cryptocurrency wallet to be as secure as possible from the outset, try the new MetaOne wallet from AAG. It is built from the ground up with usability and security in mind, and despite being a decentralized wallet that allows you to use DApps, it does away with the complicated an insecure seed phrases used by other DEX wallet options. It also boasts innovative security features, like the ability to flag potentially fraudulent apps and services that are likely to try stealing your digital assets and personal data.
Both CEX (centralized) and (DEX) decentralized exchanges have their advantages when it comes to security. A DEX, because it is decentralized, is a lot less susceptible to server hacks and data breaches than a CEX. So, as long as you protect your wallet, you shouldn’t have any security concerns. However, a CEX offers customer support, so if you do lose access to your wallet or you encounter other security issues, it will be easier to get help.
Anyone can be the target of a cryptocurrency scam, in the same way that anyone can have their bank account compromised or their credit card details stolen. Don’t assume you’re safe just because your cryptocurrency assets aren’t worth a great deal because no one knows what’s in your wallet until they gain access to it. With that being the case, you should always be mindful of your wallet’s security and follow best practices to keep it safe.
AAG’s new MetaOne wallet sets a new security standard for decentralized wallets. It’s built from the ground up with innovative security features, including the ability to flag potentially harmful apps and services. It’s also easy to use, and does away with complex seed phrases. Centralized cryptocurrency wallets can also be a good place to start if you’re a cryptocurrency newcomer since official support is available if you run into problems.
Yes, simply because it can be completely disconnected from the internet when it’s not in use, making it impossible for others to gain access to it. However, a hardware wallet is much easier to lose since it’s physical, so you need to be more careful with it. It’s also worth bearing in mind that it’s more difficult to trade and access funds on the go with a hardware wallet.
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About the author
Senior content writer
Senior copywriter for AAG Marketing team with the focus of educating our community on all things web3, blockchain and Metaverse.
This article is intended to provide generalized information designed to educate a broad segment of the public; it does not give personalized investment, legal, or other business and professional advice. Before taking any action, you should always consult with your own financial, legal, tax, investment, or other professional for advice on matters that affect you and/or your business.