Everybody’s heard how the blockchain is far more secure than the cloud. And it is. But, people end up with a false sense of security and don’t take measures to protect themselves and their cryptocurrency as a result
Even though the blocks in the blockchain are immutable and cannot be changed that doesn’t mean there aren’t ways for some sneaky criminals to get a hold of your currency. Sure, they can’t hack the blockchain and take your coins, but there are some other ways that they’ve figured out
To keep you a step ahead of these crooks, here is a list of the ways to keep your cryptocurrency safe from would be thieves.
1 – Pick your exchange wisely
The biggest potential weak link when dealing with cryptocurrency is the exchange. This is the marketplace where you convert your fiat money into cryptocurrency. Most exchanges operate in the cloud and not on the blockchain so this has the potential to be vulnerable. Unless you are converting crypto to crypto, as in if you are looking to trade Ripple to USDT which would take place entirely on the blockchain, you are using a middleman to make the trade.
Use a reliable and proven exchange like Paxful to make sure that you are operating in a safe environment. There are a few new exchanges that are not established and you don’t really know how secure their network is. By using a bigger name exchange then you know that they are taking the proper safety measures.
2 – Use a cold wallet
Your cryptocurrency will be held in a sort of wallet called a digital wallet. Though that isn’t entirely accurate as the coins have a permanent address on the blockchain and the wallet is simply where you store the information where the Bitcoins are.
There are two types of wallets: There’s a hot wallet and a cold wallet. These are strange terms to describe them but in essence the hot wallet means that it is online all the time so you have quick access to the coins and can make purchases directly from the wallet in a matter of minutes. The cold wallet, on the other hand, is like an encrypted USB drive that stays offline so nobody could potentially hack into it.
3 – Keep your keys safe
In addition to the wallet, you are given a set of codes called keys. This is the address on the blockchain where the actual cryptocurrency is. Without this address, you can’t make any other transactions at all. If you were to lose the keys, for instance, then you lose all of your access to the coins with no chance of recovering them.
Make sure to write these keys down and keep them in a safe place as they are the most important part of your security. A bank deposit box is a logical place for this in case anything happens.
4 – Be careful who you trade with
When you are making a private trade or are looking to buy something with your coins, make sure the address you are given to send them to is legitimate and is for the person you intend to pay. If you send the coins to the wrong address, then there is no way to reverse the charge and those coins are lost forever.
*This article has been contributed on behalf of Paxful. However, the information provided herein is not and is not intended to be, investment, financial, or other advice.