Crypto wallet security is understandably at the forefront of many conversations these days. Hackers and exploiters rang up record-setting totals for crypto theft in 2022, making off with as much as $3.8 billion in funds according to a report by blockchain security firm Chainalysis. Those losses occurred in the same year when crypto markets got hammered with protracted price slumps and bankruptcies hit several well-known crypto lenders and centralized exchanges.
Where does that leave people who are new to crypto or are contemplating their first crypto investment? The major storylines that emerged from 2022 should engender caution, but not despair. Because with each sensational headline around crypto hacks or another crypto exchange going bankrupt, more attention gets paid to ways that investors can control and safeguard their own crypto.
If you haven’t already gone over the basics of “What is a crypto wallet and how does it work?,” then we recommend you head over to our Learn section and check out that resource.
How to secure your crypto wallet
Hackers and scammers are constantly coming up with schemes to try and access crypto investors’ funds, ranging from guessing passwords to impersonating government employees. Here are six of the easiest ways for crypto holders to keep their crypto wallets safe.
1 Use a hardware crypto wallet
The “cold” storage crypto wallet is a type of hardware crypto wallet that isn’t connected to the internet. This is the first layer of security to keep your crypto from prying eyes. Cold storage wallets can take a few shapes, but they’re usually the size of a USB thumb drive or credit card. You’ll need to create a private key to access the crypto on your cold wallet. Keep this crypto key in a secure place and never share it with anyone.
Beware of the costly mistakes that can result in losing access to the funds on a cold wallet. A crypto investor once sent millions of dollars worth of bitcoin to the dump when he threw out an old computer. The computer’s hard drive was the only place where he had his private keys stored, so when it got tossed, he lost access to the crypto he had purchased. Don’t be like that guy: write down your private keys and keep them in a secure place (where they hopefully don’t get thrown in the trash). A fireproof safe or locked filing cabinet are good places to securely store sensitive info like private keys.
2 Use a self-custodial wallet for your digital option
Many users prefer to supplement their cold wallet with a digital (or “hot”) version that allows more liquidity and faster access to buying or selling. A self-custodial, or non-custodial, wallet, such as those you will soon be able to sign up for on Olliv, enables users to hold their private keys (and therefore any crypto they own) themselves, versus leaving them on an exchange, which takes the crypto control away from the holder.
More reading: Avoid the 5 most common crypto scams
3 Avoid public Wi-Fi when buying or selling cryptocurrency
Wi-fi is available in many public places. And while it makes it very convenient to check emails or share updates over social media, public Wi-Fi can be a potential problem when it comes to crypto. It’s easy for hackers to eavesdrop on traffic over unsecured Wi-Fi networks. And this can leave valuable information, including investors’ private keys, vulnerable to theft. Using a virtual private network (VPN) is a way to protect data on personal devices if you’re connecting to an unsecured Wi-Fi network in a public setting.
4 Update passwords frequently and don’t reuse passwords
Passwords can be a headache. But that’s not an excuse to take shortcuts when it comes to safeguarding the passwords to your crypto. Make sure to change passwords frequently and never reuse a password that you use for another online service when it comes to your crypto wallet. Hackers are adept at breaching databases and gaining access to troves of sensitive profile information, including passwords. It’s a good idea to change your password twice a year to keep your personal information safe.
5 Use 2FA, or two-factor authentication
Sometimes a strong password on its own isn’t enough. Using a secure second layer of authentication will add more security to your crypto wallet. The idea behind two-factor authentication (2FA) is to both know your password and have proof that you’re really the person who should be accessing your private information. With 2FA, a passcode is sent to a separate service like an authentication app when you attempt to login with your password. Type in the passcode that’s generated in the authentication app and you’ll have access.
6 Don’t share crypto wallet info with anyone
Boasting about gains is a common phenomenon within crypto circles on social media platforms. While it is tempting to show off your savvy investment skills, bragging about your huge crypto wins on a public forum like Instagram or Twitter can invite unwanted attention from hackers. It's okay to push pause on the FOMO button and avoid sharing which crypto wallet or crypto exchange you’re using on social media. After all, if your portfolio is going up then that’s a reward in and of itself.
Keep your crypto wallet secure
Hopefully these tips are useful if you’re just starting to dabble in crypto or if you’ve been investing for a while. Remember, no one is immune to cybersecurity threats. It doesn’t matter if it’s your first crypto purchase or you’ve been in crypto since 2009 – hackers are looking for any weaknesses that they can exploit to gain access to your crypto wallet.
Having trouble with your crypto purchases and don’t know where to turn? You can always pick up the phone and speak with a real human being on Olliv’s customer support team by calling 1-877-757-2646.