When you think about investing in crypto, you might have heard about its incredible security. However, you might not know that over $100 billion in Bitcoin has been lost. And there’s no printing more – that crypto is gone forever.
So with the risk of never seeing your money again, you might hesitate on your purchase. Fortunately, there are ways of adding extra layers of protection to your digital currency. Keep reading to learn how to store crypto safely.
What Is Crypto?
Crypto, short for cryptocurrency, is a digital token representing the value of a transaction. The currency uses encryption and decentralization to skip intermediaries. This allows for safer and quicker transactions.
While this sounds great on the surface, it also means that if your crypto is lost or stolen, there’s no way to get it back. When you think about using it, you’ll have to know how to store crypto safely. Investigating security measures allows you to take advantage of the benefits that crypto brings to your transactions.
What Are Crypto Wallets?
Digital currency works differently than traditional currency. There is no centralized vault where your tokens go, and you don’t have to buy a leather wallet and carry it around. Instead, your crypto is stored on a digital public ledger, or a blockchain, which is secured with a variety of methods.
To access your collection of crypto, you are provided with a public and private digital key. Losing this key means losing access to your money, and without security measures, there is no way to retrieve it. Crypto wallets provide an extra measure of safety in the event your key goes missing.
A few types of crypto wallets exist ranging in level of security and ease of use. The types of wallets include:
- Custodial wallets
- Cold wallets
- Hot wallets
When you purchase crypto on an exchange platform such as Coinbase, you get default storage called a custodial wallet. The platform ensures your crypto is safe in exchange for them having partial access to it. Visit this homepage to learn more about Nested, an exchange that makes using your crypto easy.
There are other ways to ensure your digital currency is secure without giving your key to someone else. Hot and cold wallets are intermediaries that store your crypto online or offline, depending on your preference. They give you sole control of your money and provide extensive security measures.
How to Store Crypto Safely
Even with the use of crypto wallets, you can always add extra layers of security to your digital money. Actions that you can take to further protect your crypto include:
- Enable two-factor authentication on all of your accounts.
- Store sensitive information in a secure offline location.
- Use a variety of passwords.
- Update the security of your email accounts.
In addition to these effective security measures, it is important to know the common scams involving crypto. Never give away your personal information and use caution when entering your password on unknown websites. When in doubt, use trusted service providers.
More on Crypto Security
As currency continues to go digital, knowing how to store crypto safely is imperative. For more on digital wallets and what to do with crypto, check out our Finance section.