How to Secure your Crypto, Create Back Ups, and Avoid Scams

Updated: Oct 20, 2021

For new investors in cryptocurrencies a major concern is how to keep your investment safe. There are lots of different ways to secure your cryptocurrency and other assets. Most people I know have kept their cryptocurrency on the exchanges they have purchased it on. This might be ok for the most part, but there is always a risk the exchange can get hacked and your assets will be lost. Another more common risk is that exchanges can prevent you from withdrawing your crypto when you want it, they can do this whenever they want to and not even offer any reason why, this has happened to me many times.

The most secure way to store your crypto is with hardware wallets like Ledger and Trezor, these are very popular and have been used by many people for a long time now, they have a good track record. Basically the "secret key" is stored on the hardware wallet device and you have to plug it in or bluetooth to your phone to access any of your crypto. There is a pin code that you have to set and input it every time you use it. You also have to use the hardware wallet whenever you send or make any other transactions with the cryptocurrency that is stored on the wallet. For back up, there is a 12-24 word seed phrase you have to print out or write down on paper when you first set up your wallet. You have to keep this paper in a secure place. I put mine in a fireproof folder inside another fireproof case. This prevents from fire but if someone were to break in they could steal it. If you have a big fireproof safe that would be even better. Make sure you don't keep a copy of it on your computer, because it can get stolen from hacking your computer. You can use the seed phrase to make another copy of your hardware wallet on another Ledger or Trezor device, and keep one in the bank or separate location if you want.

Another way to store your crypto is with web based wallets like Keplr and Cosmostation wallet for Cosmos tokens, Yoroi and Daedalus for Cardano, and Metamask for multiple tokens on Ethereum or Biance Smart Chain and other chains. There are hundreds of wallets out there, most tokens have their own wallet. These are fairly safe too, usually secured by 2 Factor Authentication (2FA). 2FA is when your log in requires your password plus another factor of security such as receiving a code via Text or Email, or having to confirm it on your Gmail app if logging in through Google. Back up is with a 12-24 word seed phrase again, print it or write it down out and keep it in a safe place, don't store it on your computer.

An alternative way to store seed phrases is to put it on a secured USB drive like this one. You can keep images or scans of your seed phrase on it, keep it in a safe place like a lock box or even a safe deposit box in a bank. It also requires a pin code to access it. Its good to have back up copies of your back ups in case one copy gets lost or destroyed.

Scammers are all over the crypto world right now and they have been successful in stealing crypto from a lot of people. Any messaging app or social media app have tons of scammers. They find ways to trick you into giving up your wallet passwords, seed phrase, secret keys and steal your funds. Usually they will approach you when you ask for help, for example on Telegram, and they will pretend to help you for a while, then ask you to go to a website to enter your secret keys and seed phrases. NEVER give your secret key or seed phrase to anyone! Another way to trick you is by tricking you to give up your 2FA code. Anyone can request a 2FA code if they know your phone number or Email address, all you would have to do is send that code to them and they could gain access to your account. Also watch out for emails that contain links or executable files. The fake emails and fake website look so good now its hard to tell them apart from the real ones. Make sure you find the legitimate website yourself and save the link in your favorites. Watch out for all these scams because you WILL encounter them at some point.

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