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Cryptocurrencies have grown more and more popular over the last few years. For some people, they’re the best thing to invest in, while for others, they’re the future of money.
Many people are drawn to the decentralized nature of cryptocurrencies, believing that it offers them more privacy, security, and control. However, when dealing with crypto, you need to take certain precautions if you want to make sure it doesn’t all go wrong.
There are various security issues you need to think about, on top of the financial matters that are also important to consider. If you’re thinking of investing in cryptocurrency or you’re just getting started, these precautions will help you to keep your money safe.
Understand the Technical Stuff
If you want to do well with cryptocurrency, you need to be able to understand it. You can’t jump into it if you’re not in any way technically-minded and can’t get your head around basic tech concepts. You don’t need to be a genius, but as it stands, cryptocurrency isn’t the most user-friendly or accessible of things to invest in. You need to be prepared to do some research and to keep up with developments in the cryptocurrency world. Before you do anything else, you should make sure you can get to grips with the basic concepts and how it all works. You won’t get far if you can’t do that.
The Financial Side of Things
It’s not all about tech when you’re dealing with cryptocurrencies. You’re still risking your finances and perhaps using currencies that are officially recognized as money in some countries. Whether your cryptocurrency is legally recognized as money or not, it’s still an asset that you’re investing in. Whenever you invest your money in anything, you need to be familiar with the financial risks and pitfalls, as well as the benefits. You can be a tech expert, but that doesn’t mean much if you’re not able to understand the best times to buy and sell cryptocurrencies and which ones are best to invest in.
The number one rule of dealing with any kind of data is that you need to back up everything. There are many ways you could end up losing your data, from a computer crashing to a hard drive refusing to work. If you only have your data stored on one device and you can’t recover it, you have no hope of getting it back. To avoid losing your cryptocurrency forever, you need to create several backups. Backup your wallet as soon as you can, and keep doing it at regular intervals too. Don’t just rely on one backup because you never know if you might have a run of bad luck. Use different methods to create backups, and make sure they’re all adequately protected too.
Use Cold Storage
There are always extra steps you can take to make your cryptocurrency more secure. Cold storage is a method of storing your private keys for cryptocurrencies so that you can access them when you want while keeping them secure. At Bitcoin Safes, you can see a range of products that can help you do this, such as the KeepKey. You can also get hardware wallets like the Ledger Blue, which you can use to manage your money and transactions more easily and securely. Some devices have more sophisticated functions than others, ranging from the size of a USB pen drive to smartphone-sized.
Encrypt Your Data
Data encryption offers another layer of security to help you protect your money. Sensitive data should be encrypted so that even if someone can get access to it, they won’t be able to read it. When you encrypt your cryptocurrency data, make sure you don’t store your passwords or keys on the same devices as your wallets. Use different passwords for different files stores too, so that it’s more difficult to get into them. Try using an application like VeraCrypt to carry out encryption more easily.
You can also make your cryptocurrency more secure by using two-factor authentication. This method of securing data means that you have two levels of security to protect your assets. As well as having a password, you’ll also have another method of getting into your information. It’s likely that you already use this form of security in other aspects of your life. Maybe your bank requires you to have a username and password when banking online, along with another code if you want to log in or carry out any transactions. You can do this on your phone by adding the right software, like Google Authenticator.
Don’t Keep a Lot of Money in Mobile Wallets
Mobile wallets can be handy, especially if you’re able to use them to pay for things in stores or on the move. However, it’s not a good idea to use mobile wallets all the time or to keep too much money in them. If you use a mobile wallet, it’s useful for keeping a bit of spending money in it for everyday purchases. However, you should make sure you don’t keep large amounts of money in it because it won’t be as secure as you need it to be. Your smartphone shouldn’t be the primary place where you store your cryptocurrency.
Keep Software Up to Date
It’s essential to keep any software you use to handle and secure your cryptocurrency up to date. Out of date software isn’t going to provide you with the security you need and could leave any devices vulnerable. Some applications, like cloud-based software, will update automatically so that you don’t have to pay much attention. However, there are other applications that will require you to manually approve updates and perhaps even check to see if there are any new ones. It’s also worth occasionally reviewing the software you use to see if there are any better tools you should be using.
If you’re going to use or invest in cryptocurrency, you need to be careful. Take some precautions to protect yourself and avoid losing your money.