Do you own a Bitcoin or some other cryptocurrency? Are you storing it in an exchange? Do you have the private key or passwords stored on your computer? You better be careful! A hardware wallet might be the solution.
Where do you store your money? Most people keep their money in the bank, some keep them under their mattress, and some in a safe in their home. No matter where you keep your money dangers are lurking in the dark, but it is a fact, that some methods are safer than others. The same is true when it comes to storing your crypto-money.
How to lose your crypto-money to hackers and thiefs?
Store your cryptos in an exchange
There are lots of different ways to store your crypto-money. Most people store their money in an exchange somewhere on the Internet. A frequent place to enter the world of cryptocurrencies is Coinbase. This is a very user-friendly website which makes it very easy to purchase Bitcoin, Ethereum, and Litecoin. This is one of few sites that let you purchase these currencies using a VISA or a MasterCard. In other words, Coinbase is a natural place to start your cryptocurrency adventure.
But, what happens to your Bitcoin after you purchase them on Coinbase or any other exchange? It is stored there, by them. You do not have full control because hackers can attack the exchange and steal the money. It can also happen that the exchange (or some employees) steal currency located in the exchange. At Coinbase they have an insurance available for all the money you store with them (in the exchange, not the money in the vault). I do consider this to be safe, but there are better solutions.
Store your cryptos on your computer
Maybe you feel it safer to store the money yourself. It is possible to create online wallets to which you own the private keys, or you can download an offline wallet which you keep on your computer. What is important, is that you own the keys to the wallet. But, where are you storing your keys? Is your wallet protected and encrypted? There are lots of dangers here as well.
- If you have a wallet on your computer, anyone hacking your computer might be able to send money from your private wallet to their address.
- Maybe your wallet is password protected? Lots of hackers use keyboard loggers to see what you type, without you knowing it. In that way, they get access to your passwords, and your cryptos are no longer protected from thieves online.
- Lots of people store they private keys and their passwords on their local computer, or on a cloud storage. It feels safe to have the passwords around in case of trouble, but those documents are easy preys for a hacker with some skills.
There is trouble with all these solutions. What if you store your passwords on a pen drive? Or store your private keys somewhere else on paper in the house? Those are great solutions until someone breaks into your house and steal them or your house burns down. Is there any great solution that will make all problems disappear?
Store your money in a hardware wallet
One option that might be ideal is to store your money in a so-called hardware wallet. This is a real wallet, which means that this is needed to access your wallet and to make any transaction. A hardware wallet makes it almost impossible for hackers to access your money. To use your hardware wallet you need it to be plugged into your computer, and you need to use your actual pin code for it to work. It is easy to use, but hard to hack!
But, what if my hardware wallet is stolen or lost?
If you have lost access to your hardware wallet, you can still get access to your money using your private key, something you have stored safely somewhere in your house, or maybe in a vault somewhere in a bank. Your private keys will give you access to your stored money, even without your hardware wallet.
Which hardware wallet to use?
There are two hardware wallets considered to be the best and most popular. The first is called Trezor, and the other is the Ledger Wallet. They are quite similar when it comes to price, but the Ledger Wallet supports more currencies than Trezor. Visit both websites and pick one for yourself.
There are even more solutions for how to store your crypto-money, but the hardware wallets are considered to be among the safest and best solutions.
A VPN can make you even more secure
You should not forget about securing your Internet connection with a VPN. If you access your wallet on an open WiFi network, hackers might easily snap up sensitive information. Why not use a VPN to encrypt all your online activity, and thus make it even harder for anyone to steal your information, passwords and private keys? You can read more about VPN services here in the IP Address Guide.
Do you have any final comments?
Do you have any comments related to what you have read? How do you store your crypto money? Write a comment and let us know!