How do I secure my cryptocurrencies?
To secure your cryptocurrencies, you can implement several solutions, such as the Cold Wallet, the Hold Wallet and the Paper Wallet.
Cryptocurrencies can be used for various purposes. They can be used to make investments, conclude transactions, make purchases, etc. They are also a source of concern for their many holders. Indeed, in recent years, the number of cryptocurrency theft operations has increased considerably. So how do you secure your cryptocurrencies? Several solutions exist; here are some of them.
Why should you secure your cryptocurrencies?
We can never emphasize it enough: security is essential in the world of cryptocurrencies . Without security, it is difficult to get the different players in the sector to interact. But this security is relatively fragile!
Indeed, users of digital assets can decide to store their assets on an exchange platform. The problem is that the huge amount of cryptocurrencies stored by the platform can attract malicious people. They will then carry out cyberattacks in order to seize the coffers of the stock market. As a result, you could lose all your assets.
Electronic currencies can be leveraged for trading. For this, you need to register on a platform, open positions, etc. Apart from fiat currency, several trading sites offer to trade with digital assets. However, here too there is a problem. The platform can also be the victim of an attack. You could then have your wallet of Bitcoin (BTC) , Ethereum (ETH) , Cardano (ADA), Solana (SOL), etc. stolen .
Some people simply decide to store their cryptocurrencies on their computers . After all, it's (perhaps) not a bad idea. However, we must not lose sight of the fact that a computer is a good that can be lost. It can also be stolen. If it falls into the hands of a hacker, the latter will be happy to find the user's personal data there. He will make the computer his goose that lays the golden eggs to enrich himself with digital assets.
So no matter what angle you look at cryptocurrencies, however convenient they are, they are susceptible to theft. Does this mean that there are no means to protect them? Not at all ! On the contrary, solutions that can be exploited abound. Among them is the use of the Cold Wallet . What is it about ?
The Cold Wallet, the safest method
What is the Cold Wallet? It is a virtual wallet that is not connected to any Internet network . As a result, it is theoretically inviolable. It cannot be attacked by a hacker . Still known as the Hardware Wallet, the Cold Wallet works with a physical object that can have various forms depending on the brand.
Whichever form is chosen, the private key is not visible to the network, which offers optimal protection to its user. The private key is physical. On the other hand, cryptocurrencies are stored online. Therefore, to have access to it, the owner must use his Cold Wallet.
The Cold Wallet signs each transaction to certify that the owner agrees to carry it out. So the only constraint - which is not really one - with this system is that you have to confirm each time the cryptocurrency transfer transactions using the private key.
There are several types of physical wallets that can be used. For example, Ledger from the French company of the same name is one of the popular solutions for cryptocurrency users. Next to it, there are also other companies: CoolWallet, Trezor, CoinPlus, etc.
As we have said, the use of the Cold Wallet requires the use of a physical object. However, not everyone likes having this constraint. For these people, it is possible to use Paper Wallets.
Paper Wallets, relative security
A paper wallet can be generated offline, which is convenient. Once it is generated, the user writes down his public key and his private key on a medium that he must not lose. His wallet can receive the electronic money that corresponds to him, even when he is not connected to the Internet network. It is therefore a convenient and secure way to store cryptocurrency.
However, the paper wallet has a major drawback. With it, it is not possible to make outgoing transfers of digital assets. Corrigendum: it is THEORETICALLY not possible to do so! Indeed, in practice, there is a workable solution. It consists of importing your private key into a wallet: computer, smartphone , web client, etc.
But this technique also has a flaw: it exposes the owner to computer attacks, since his private key is now connected to the Internet. Any well-skilled hacker can gain access to it. However, there is a parade. This involves recreating a paper wallet for each transfer made. It's restrictive, but it's for safety.
Please note, with a paper wallet, it is not possible to find cryptocurrencies when they are lost. Unlike other storage methods, there is no recovery technique such as backup or PassPhrase . Hence the importance of keeping your key safe.
The Hot Wallet, even more relative security
Not tempted by the Cold Wallet solution? In this case, to secure your cryptocurrencies, you could opt for the Hot Wallet. It consists of storing cryptocurrencies on a computer, smartphone or tablet by securing the private key there.
The advantage with the Hot Wallet is that the owner has full control over their digital assets. He disposes of it as he wants...unless a hacker enters the scene.
Indeed, since the private key is on the computer, it is likely to be attacked by a computer virus . Result of the races: by wanting to keep his cryptocurrencies, the owner exposes them to pirates!
Another difficulty with the Hot Wallet is that you have to do regular monitoring. Regular updates are made, and it is important to integrate them into your system, otherwise it becomes even more vulnerable.
That said, if despite everything you opt for the Hot Wallet, you can benefit from a certain flexibility. Functional desktop wallets are: Bitcoin Core, Exodus and Jaxx. Of course, there are several others. As for smartphones, it is possible to use applications such as Samsung Wallet and Mycelium. The ideal is to try several applications to find the one whose interface suits you.
Securing your cryptocurrencies is a challenge for all owners of digital assets. At a time when hackers proliferate and sharpen their methods regularly, it can be difficult to put your electronic currencies in a safe place. However, there are various options that can be implemented: Hot Wallet, Paper Wallet, Cold Wallet, etc. But of all these solutions, the Cold Wallet remains the most practical. It guarantees optimal protection and reduces the risk of falling victim to hackers.