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Updated as of July 2023

Author: Allister D.

As cryptocurrencies continue their push into the mainstream, the rise of this digital asset class has become too significant to ignore. Their increased popularity also brings an increased risk of cybercrime. Protecting your cryptocurrency requires adopting stringent security measures to ensure your investment does not fall into the wrong hands.

Best Practices to Secure Your Cryptocurrency

1. Use a Hardware Wallet: If you are holding significant amounts of cryptocurrency, consider investing in a hardware wallet. Unlike software wallets that run on your internet-connected devices, hardware wallets are physical devices designed to securely store your private keys offline. This cold storage approach protects your assets from online threats. As always please do your own research when buying a hardware wallet as not all are equal. Generally, open source products are to be trusted more.
2. Guard Your Private Keys: Never share your private keys with anyone and avoid storing them online at all costs. Exposure of these keys can lead to irreversible loss of your cryptocurrency.
3. Secure Your Internet Connection: Ensure your device's connection to the internet is secure when transacting. Avoid public Wi-Fi networks when dealing with cryptocurrencies. If you must use a public network, a reputable VPN can provide a secure encrypted connection. Also ensure no one is watching your screen when conducting transactions.
4. Regular Updates: Keep your wallet software and devices updated. This ensures that the latest security enhancements protect your digital assets and lowers the risks of you being exposed to zero day vulnerabilities that may be left unpatched in older firmware and software.

Why Should You Use a Hardware Wallet?

A hardware wallet offers multiple layers of security for your digital assets. They store your private keys offline, on the device itself, ensuring they never leave the device during transactions. This approach provides protection even when transacting on a compromised computer.

In addition to this, hardware wallets are typically built to withstand a certain level of physical damage, meaning your cryptocurrencies remain safe even if the device is destroyed as long as you have a backup of your seed phrase or private keys.

While hardware wallets are an additional expense, the security benefits they provide make them a worthwhile investment for anyone holding substantial amounts of cryptocurrency.

Protecting Your Seed Phrase

Your seed phrase is a backup of your private keys, usually presented as a list of 12-24 words. If your wallet is lost, stolen, or destroyed, this seed phrase allows you to recover your cryptocurrencies.

Given its importance, protecting your seed phrase is crucial. Here are some ways to do it:

1. Never Share It: Just like your private keys, your seed phrase should be kept private. Sharing it WILL lead to the permanent loss of your cryptocurrencies.
2. Keep It Offline: Avoid storing your seed phrase digitally at all costs to protect against online threats. Writing it down and storing it in a secure location is a good approach.
3. Redundancy is Key: Make multiple copies of your seed phrase and store them in different locations. This way, if one copy is lost or destroyed, you still have others.