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How to Keep Your Cryptocurrency Safe in 2023

how to keep crypto safe
  • by Toby Foster
  • Published 20 months ago
  • 8 mins read

crypto news

As the popularity of cryptocurrencies increases every day and more people jump on the bandwagon, it’s more important than ever to know how to keep crypto safe.

Hackers have been active more than ever, and there were some record losses in previous years. Still, things aren’t as dire as they might seem because there are numerous ways to protect your digital assets.

If you don’t know where to start, don’t worry—you’ve come to the right place! In this article, we break down the most popular ways of storing your crypto and provide you with some valuable tips on keeping it safe.

So let’s begin!

Why Is Crypto Storage Important?

You don’t store your cash in the middle of your room, as anyone can steal it—instead, you place it in a safe with a lock. Similarly, you store crypto in a specific type of storage to ensure it’s safe.

But why would you pay so much attention to keeping crypto safe? Well, consider : $1.9 billion worth of crypto was stolen in 2022 only. Bearing in mind the frequency of such unfortunate events, it’s safe to say you probably don’t want to contribute to this astonishing metric.

To store any cryptocurrencies (, , , and the like), you need a crypto wallet—a special type of storage that acts as a safe for fiat currency.

How to Store Cryptocurrency

As mentioned, because of their , cryptocurrencies require a specific approach to storage. In the following section, we’ll explore three of the most popular ways to safely store your crypto.

Hot Wallets

are the simplest and most popular way to store your crypto. They are software-based crypto wallets that are connected directly to the internet.

There are several types of hot wallets, such as:

  • Mobile wallets. This type of wallet provides a convenient way for you to access your crypto on the go, as they are, like their name suggests, designed to be used on a smartphone or any other mobile device. Some of the most popular mobile wallets include , , and .
  • Web wallets. Accessible via web browsers, web wallets like , , and are usually offered by crypto exchanges. You can access them on any device that has internet connection, and they require a bit more extensive expertise to set up.
  • Desktop wallets. These wallets are essentially computer programs that you can easily download and install on your desktop. They come with increased security and control compared to mobile and web wallets, and some of the most-used ones include , , and .

Keep in mind that even though they are super easy to use, they come with the downside of being easily hackable and susceptible to malware attacks. Still, if you have a small amount of crypto you want to store that you don’t fear losing, they might be the perfect choice for you.

Cold Wallets

Contrary to hot wallets, are completely offline. They are more secure, but they also come at an increased cost. Some of the most popular cold wallets include:

  • Paper wallets. A paper wallet is, quite simply, a printed-out version of your private keys that you store in a secure location, like your safe or a vault. It just contains the string of words you chose as a password and is the least safe of all cold wallets.
  • Sound wallets. This type of cold wallet is the most unique, as it uses a series of tones to store your private keys. Anyone who listens to it can access your funds, but the catch is that nobody except you will know where those funds are stored.
  • Hardware wallets. These wallets store your private keys completely offline. They’re physical devices that can range from specifically designed hardware with custom security features to regular USBs. These wallets are generally considered the most secure option, as they can’t be hacked.

Wondering which cold wallet to choose? Here are our top picks:

Custodial Wallets

A custodial or exchange wallet is a combination of hot and cold wallets. You get one when you create an account on a crypto exchange; the company you opt for stores it and ultimately gives you access through your account.

Now, you might be wondering why handing over your digital assets to a company is a good idea. Basically, they are easy to set up, as the exchange company does all the work for you and hands over the wallet to you when you register. On top of that, some exchanges provide insurance, which, in the worst-case scenario, gives you reimbursement if they ever get hacked.

The downside is that you don’t have full control of your private keys, and if the company goes bankrupt, you lose your crypto. The company can also turn out to be a scam if you don’t choose a legit one, so you should choose a trusted option, such as:

How to Choose Storage

Now that we’ve covered the basic types of crypto storage options, it’s time for you to decide which one is best for you. When opting for a solution, you should consider the following factors:

  • Cryptocurrency type. Most crypto wallets aren’t universal for every coin out there. That’s why you want to find a storage solution that can hold your specific crypto.
  • Platform reputation. Once you narrow down your search by the crypto you own, you should research the storage platforms you’re considering and check their reputation. If there are negative reviews or other users don’t seem to be recommending it, you should probably look for another crypto storage solution.
  • Security features. When choosing a storage option, you should always look for one that has plenty of security features. These can be either biometric authentication, two-factor authentication, etc.
  • Amount of crypto. Last but not least, you should decide on the storage based on the amount of crypto you hold. If you don’t have much crypto, you shouldn’t spend your hard-earned money on an expensive solution.

5 Tips for Keeping Crypto Safe

Here are seven tips to help you keep your cryptocurrency secure:

#1. Generate Strong Passwords

First and foremost, to keep your crypto safe, you should start with the basics and come up with as strong passwords as you can. This means not including birthdays, song lyrics, street addresses, etc.

Considering that hackers can make an astounding , you should also not mash your keyboard when thinking of a password. Instead, get a hardware wallet and use it to generate a powerful key or a signature for you. Then, make it even stronger by adding uppercase letters and symbols.

#2. Use an Authentication App

By using a two-factor authenticator (2FA), you add another step in the login process for your wallet and an extra security layer. A 2FA creates a unique code for you, which you must enter whenever you log in. This way, hackers will have one more bump in the road while trying to breach your wallet.

Some of the most popular 2FA apps include and , both of which you can easily download and install.

#3. Check Websites URL

Although it might seem obvious, you should always check the URLs of the websites you visit because hackers often make fake websites that resemble the real deal. When they do this, they swap a letter or two, tricking people into entering their login credentials and thinking it is a legit website.

So, always double-check the website URLs and bookmark legitimate websites so you can easily access them without typing in the URL every time.

On top of checking the website URL, you can also check the website itself by making a small test transaction. Try to trade/transfer a tiny bit of your funds to test the network before going all in, and you’ll know exactly what you’re dealing with.

#4. Use a Hardware Wallet

Yes, you can use a hot wallet or a custodial wallet for storing your crypto, but the safest wallet is definitely a hardware crypto wallet. This way, your storage will be completely online, making it impossible to hack through.

Don’t want to spend money on a dedicated hardware wallet that comes with all the fancy features and such? Get an old laptop or desktop, remove the network card, and use it as a hardware wallet. Voila!

#5. Use Multiple Wallets

Last but not least, albeit a bit extreme, you should use multiple wallets, especially if you have large sums of crypto. Even if you think your seed phrases are safe and have followed all the previous tips, don’t let your guard down.

Moreover, if you use cold wallets, you should hide your accounts under different hard drive paths. Think of it as the last line of defense: however minor, it’s still a line of defense.

Key Takeaways

No matter how many there are nowadays or how many instances of lost and stolen funds are out there, crypto won’t lose its popularity. But because there are so many malicious attackers out there, it’s super important to keep your crypto safe.

For peace of mind, you can generate strong passwords, use 2FAs, check website URLs, and use multiple hardware wallets.