Yes! we all are moving into the digital world at a rapid pace. Cryptocurrencies galloped their own space in the world of digital technology.
The traditional way of making the payment is already moving out of space and most of the payments are going cashless via digital payment. Soon cryptocurrency will be in an ultimate form to replace this traditional way of making payment.
Now you may ask yourself how will you save this digital money? Normally you keep in wallet or deposit in the bank account to save money but in case of digital money, it is a crypto wallet.
What is a Crypto Wallet?
Crypto wallet is a digital wallet to save cryptocurrencies. It is also used to transfer digital money. You can receive and send cryptocurrency via crypto wallet.
Now, whether it is digital money or not, you always need to keep it safe for your future use. Normally you keep your physical money safe in your personal bank account or wallet. In this article, we will see how to keep your crypto wallet safe and backed up.
Before looking into ways to keep your crypto wallet safe, we will see the types of crypto wallet in brief. There are two types of crypto wallet.
Cold Wallet – Cold wallets are the wallets which cannot be accessed through the internet.
Hot wallet – Hot wallets are wallets which can be accessed through the internet.
The different ways to keep your crypto wallet safe and backed up
Avoid overloading the wallet
What happens when you overload your physical wallet? You may lose all your money if you lose your physical wallet. Similarly, it happens with crypto wallet. Always keep only a few crypto coins in your crypto wallet. By any chance, if you lose your crypto wallet, you may not lose all your crypto coins.
This is a basic thing to be known while maintaining your digital wallet as well as your physical wallet. Once you finish all your crypto coins in your crypto wallet, you can load your wallet as per your requirement.
Be cautious about the online wallets
When your digital wallet is online wallet then it is definitely through some online service. You always need to be aware of the online service supporting your online wallet. It is possible that the service providers may possess the private key of your online wallet where they can have access to your online wallet.
There are many online wallet services suffered the security breaches in the past and it is always best to analyze the online services before adopting the online wallet. Always choose the best online wallet service to keep your crypto wallet safe.
Frequently perform wallet backup
If your crypto wallet is saved in your mobile, have you ever thought what happens if you lose your mobile? Yes, it is always recommended to have a backup of your crypto wallet. Similarly, if it is stored in your computer, you can take a back up of it and it will be useful in case of any computer crash. You can also recover your wallet if it is encrypted.
Always perform the entire backup of the wallet.
Digital wallets will have a secret number and that is called the private key of the crypto wallet. There will be multiple private keys for the wallet. Take the backup of all the private keys of the wallet so that the crypto wallet can be easily recovered
Always prefer encryption technique
Though you have taken the backup of the crypto wallet, there is a chance of hacking the backup itself. Always make use of the data encryption technique to encrypt the data and so that you can prevent it from hacking
Make use of multi locations
Once the backup is performed, you need to save the backup in a safe and secure place. At the same time save the same backup in multiple locations. Saving in a single location is highly vulnerable to hacking.
Make use of encryption
To be more secure and safe, you need to prevent unauthorized access to your wallet. This can be done by following encryption techniques to encrypt the data while transferring data from or to the wallet
Always remember your password
Try to always remember your password or you may not be able to access your cryptocurrencies so see to it that you make a note of the password or keep it in a secret place so that it is not accessible to any third person.
Prefer a strong password
Always prefer a strong password so that it is not easily tried by any hacker. Create the password in such a way that it consists of at least 10 to 16 alphanumeric characters with special symbols. There is software available to create your password, you can make use of it and try to remember the same You can memorize your password so that it safer to keep in mind than to keep the password in some place.
Use wallet offline
I have already discussed using wallet offline and yes it is the cold wallet. As already discussed, it is a wallet not connected to the internet and this type of wallets is not easily accessed by the hackers. Online wallets are more vulnerable when compared to an offline wallet and offline wallets are not prone to theft. Wisely choose a safe place to keep your offline wallet so that you can avoid unauthorized access. Check whether any cold storage facility is available for your digital wallets.
Switch on to updated software
If you are using any software wallet, switch on to updated software. It will add more security features to your software. Updated software may have the changes updated to enhance the performance, security, stability of the software. If it is not updated, it becomes more vulnerable to security theft and may have performance issues too. Keep your software updated to avoid all kind of security threat.
Protect with multi-signature authentication
Multi-signature involves multiple levels of authentication and can be used to verify the transactions sent from or received to a crypto wallet. It ensures that the verified transaction undergoes multiple approvals i.e. the authorization is done by more than one authorized person. Multi signatures will make use of multiple keys and these keys are required to verify the transactions. With multi-levels of digital signatures, it ensures secure transactions via crypto wallet
Be prepared with the testament
Hope you all know that in your absence, the asset or money that you have earned throughout your life will be given to your intestate heirs if nothing is mentioned in your testament. Testament is a will or a document written or prepared with respect to your asset. But here in case of crypto wallet, the earned cryptocurrency will not be provided to your intestate heirs.
You need to provide the password and location for accessing your crypto wallet.
In your absence, without password and the location, it is very difficult to recover the crypto wallet so always be ready with your testament by providing the credentials to a most trusted person.
Finally, in this article, you will be able to understand how to keep your crypto wallet safe and backed up. Hope it is very simple to follow the above tips. Like your physical wallet, it is very important to protect your crypto wallet and save your cryptocurrencies in the crypto wallet.
Make use of the best online crypto wallet service to protect your crypto wallet.
About the Author
Jeseena. K is a senior content writer at Infinite Open Source Solutions LLP, a leading Direct Selling Software provider. She is a voracious reader and she spends her free time reading a broad spectrum of subjects ranging from fiction to the latest software technology.
This is the Dragon Blogger Guest Bloggers account for author’s who want to submit articles and only have credit in the post instead of having to manage their own WordPress profile.