How To Protect Your Cryptocurrencies

Please note that I own a Ledger Nano s and include affiliate links in this article. I was not hired/paid to write this article.

Whether you are new to cryptocurrencies or not it is important to safeguard your savings. When buying cryptocurrencies you typically go through an exchange such as Coinbase, Binance or Bittrex. An exchange is fine for buying and selling but if you plan to keep cryptocurrency for a long time it would be much safer to store it on a hardware wallet such as the Ledger Nano S or the Trezor. I wanted to write this article to outline some of the things that any user should be aware of.

Tips For Keeping Your Cryptocurrencies Safe

Make sure to protect your passwords, seeds and keys. As with any website you should never use the same password for multiple logins. The best way to keep you protected is to use an offline program like KeePass to store all logins in an encrypted file. Because I know that this is not optimal for everyone I would at least recommend to manage different passwords with your browser or a service like LastPass. Note that these types of services become targets of attacks and are sometimes hacked. The safest way to protect your passwords is to store them offline in an encrypted file.

Seeds for wallets are usually a bunch of words that you are told to write down. It is extremely important that you protect these words as they act as a master key for your wallet. That means that anyone with these words can transfer your cryptocurrencies without any other information. I highly recommend that you keep seeds offline, never copy these words. Write them down on a piece of paper and put it in a safe place. I personally like to keep two physical places, perhaps you keep one at home and one at your parents house or a safety deposit box. Never ever take a picture as a backup. Remember, services like Dropbox or Apple have been hacked in the past and it can happen again.

Phising Is Still A Problem

Beware of spoofed domains, domains that look like they are the real deal but are actually phising sites. Something that has become a problem lately is that scammers register domains such as Bì or Binanç If you look closely you will see that the i and c in the above examples are actually special characters and therefore a completely different domain. Please note that Binance was simply an example, it could happen to any domain. These sites look exactly like the real deal and it is hard for even an expert to tell the difference. My recommendation for protecting yourself against these scams is to simply type in the domain name yourself. Never go to a website via Google search results or links from pages on other website.

Hardware wallets

As I mentioned in the beginning of my article, one of the best ways to protect your cryptocurrencies is with a hardware wallet. There are two hardware wallets that I feel safe recommending at the moment, the Ledger Nano S or the Trezor. I personally use the Ledger Nano S for my own cryptocurrencies. Similar to a software wallet you will have a seed, a bunch of words that you will need to protect. As stated before, put it in a safe place and make a copy to put in a safety deposit box. Never take a picture of your seed words and never store it on your computer. I cover two hardware wallets but I want to note that there are more options out there.

Now, you might wonder how a hardware wallet works. You simply connect it to your computer via a USB cable. On my computer I run a small application that talks to my ledger. This will allow me to view my balance and transactions as long as a input my pin. I can initiate transactions using the software but will need to approve the transaction using my ledger.

I highly recommend that you buy the Ledger Nano S directly from Ledger as there have been reports of scams via places like email. Some have reported premade seeds (your seed card should be blank) or in a rare case the hardware may have been tampered with.

A Final Word

These are some focus points that I have personally picked out. I assume that you already keep yourself protected from viruses by keeping your system and applications up to date. If you are dealing with large amounts of cryptocurrencies I would suggest that you might consider having a dedicated computer to handling your cryptocurrencies and nothing else.

I hope you find this article helpful and I would love to hear feedback, I am sure I missed something that would be good to mention.