7 Tips for maintaining the safety of your crypto wallet
In this article
— Generate strong, long passwords
— Store multisig wallet seed phrase(s) across the different locations
— Opt for Cold Storage
— It is advised to try not to store your digital tokens on a centralised exchange
— Pick a secure software or hot/ warm wallet
— Enable 2FA
— Transact with known parties
— Additional Tip
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No matter the worth of your crypto-holding, security is essential. It is critical to set up best-in-class protection and security protocols – even if you hold a fraction of bitcoin in your favourite, the best cryptocurrency wallet.
The following multisig wallet safety and security protocol/ tips will help you in your crypto journey.
Tip 1: Generate strong, long passwords
It is a good practice not to use birthdays, street addresses, song lyrics, best friend’s names, and other personal information as your password. Just to attain randomness, numerous users prefer mashing random keys on the keyboard; even after applying such a creative technique, most users can’t achieve randomness when it comes to password generation. Even the best cryptocurrency wallet passwords can be cracked if the password is not random enough. When opting for the best crypto wallet, employing random mnemonics generator to generate a passphrase is the ideal choice for security purposes. On top of that, a multi-signature wallet adds an extra level of security.
Tip 2: Store multisig wallet seed phrase(s) across the different locations
BIP 39 allows the best cryptocurrency wallet to generate a set of mnemonic codes or deterministic keys, or mnemonic sentences. The multi-signature wallet employs these mnemonic codes to create encryption keys that execute and sign cryptocurrency transactions. When you opt for the best crypto wallet, the best-suggested practice is to write down your seed phrase on paper, produce two copies of the seed phrase, and save both in two different locations. On top of that, it is ideal to use both analogue and digital mediums as well as meticulously record your steps so that the existing owner and the future owner can recreate the seed phrase.
Tip 3: Opt for Cold Storage
Most users are aware of the “cold wallets” that are designed to help protect funds but isolate funds in an offline hardware wallet. One of the well-known pieces of advice shared across the crypto community is: if your digital token holdings are worth the equivalent of one month of salary – then storing your funding using a multisig wallet and cold storage is the wisest choice. But what is a cold crypto wallet? Cold storage is a crypto wallet that is not online or not connected to the internet. The best cryptocurrency wallet that offers cold storage services typically provides a dedicated hardware wallet which is a small device that can be directly connected to your computing device. It makes your cryptocurrencies secure.
Tips 4: It is advised to try not to store your digital tokens on a centralised exchange
For most users, setting up a fully functional cold storage wallet can be a bit complicated process, especially if you’re new to the crypto space. There have been numerous high-profile hacks on exchanges that have led to serious loss of funds. Hackers are consistently targeting widely used crypto exchanges. So, leaving your coins in a wallet generated by your exchange is not a good idea because the associated risk of losing your funds is very high. You will also lose funds and assets if the centralised crypto exchange gets compromised.
Tips 5: Pick a secure software or hot/ warm wallet
Typically, software or hot/ warm multisig wallet is available on all three major platforms – desktop, web, and mobile. The security features, user experience, and storage services are pretty much similar across the board, no matter the application you opt for. But, as a user, it is excellent to do your research first and pick the best crypto wallet that meets your requirement.
Tips 6: Enable 2FA
Multi-factor authentication, also known as MFA or 2-factor authentication, is among the best ways to safeguard your password. The 2-F Authentication is an access control mechanism that requires two different methods of identification or authentication. The first factor of authentication is something you already know, for example, PIN. The second factor of authentication is something you have, for example, a smartphone, where you receive a text SMS/ message to verify it’s you. For extra security, enable two-factor authentication to each and every online account that is directly linked or associated with your multisig wallet. Enabling 2FA might slow down your login process, but the extra layer of security it provides is worth the pain.
Tips 7: Transact with known parties
A lot of things can go wrong when you’re trying to send crypto to a wallet address, especially if it’s your first time. So, it is in your best interest to find complete information about the address or the wallet you’re about to send your hard-earned crypto-tokens. The best crypto wallet that allows crypto transactions over blockchain typically has a public ledger. Or else numerous other websites allow users to gather information related to the wallet addresses – from the IP address of the transaction, current balance, number of transactions, and history to fund volume.
It is highly recommended to avoid publicly available free Wi-Fi. It is important, while establishing a connection, to ensure that the internet connection is secure. Additionally, it is also suggested to employ a trusted VPN provider that helps you hide your actual IP address and prevent your computers from DNS leaks. With VPN, users can securely connect to their multi-signature wallet. With VPN, no malicious actor would be able to figure out exactly where you are. The VPN is built to safeguard your devices and wallet from potential online threats and hackers, plus allowing you to access region-locked services.