With cryptocurrency becoming more popular globally, you may be tempted to invest. However, before making any moves, you must ensure that you have a deep understanding of how to protect your cryptocurrency. This means that you have to be smart about investing your money in something volatile and precarious.
Cryptocurrency is a digital entity which requires the internet to enable transactions. This does leave it vulnerable to hacking. According to one survey, in 2017 alone, more than $230 million worth of cryptocurrency was stolen, and the figures continue to rise each year. Furthermore, it was recorded that phishing, exploitation of software storage, and hacks are some of the common ways cryptocurrency is stolen.
It is essential to do thorough research on the type of cryptocurrency you intend to invest in before actually investing your money. Moreover, investigate exchanges and storage methods which will help you find the best way to protect your coins. Apart from this, installing antivirus software and multi-factor authentication codes are some of the steps you can take to protect yourself.
Here are some tips to protect your cryptocurrency
1. Do Your Research
Cryptocurrency wallets come in different forms ranging from hardware, software, and paper. Before settling on one, familiarize yourself on the pros and cons of each. Several pieces of research have shown that hardware wallets, which are touchable wallets used to store your private keys, are the most secure and popular. However, if your hardware wallet gets lost, there’s no way you can recover it.
2. Don’t Put All Your Eggs in One Basket
Investment experts will always tell you to invest your money in a variety of projects and never to invest all your money in one thing. This is commonly known as spreading the risk, which is a risk management strategy. This rule also applies to cryptocurrency. Invest your money in different cryptocurrencies, so that, should one exchange fail, you can protect your investment and reduce the impact of loss. Nonetheless, this technique is time-consuming and requires in-depth knowledge to track and monitor the investments.
3. Use Wallets from Known Sources
With cryptocurrency gaining popularity, there is a growing number of wallets from less reputable companies that offer attractive deals. Nonetheless, the wallets made by these companies are more prone to hacking, and sometimes, the company itself may be facing financial troubles. However, with https://nakitcoins.com, you don’t have to worry about any of that. It is important to note that some cryptocurrency companies are startups and are not audited by financial regulators.
4. Keep Your Cryptocurrency Keys Safe and Private
Cryptocurrency accounts are always prone to hacks. Therefore, ensure that your account keys are sophisticated and challenging for hackers. According to experts, to minimize chances of fraud, use multi-signature or more than one key to accredit any cryptocurrency transaction. Furthermore, use a strong two-factor authentication technique in your dealings.
5. Use Strong Passwords
Always secure your wallet and backups with an uncrackable password or a set of keys. A good password should have 64 characters. The characters should be composed of numbers, uppercase and lowercase letters, and symbols. Also, know the backup seed phrase and, if possible, keep it in a safety deposit box.