Are cryptocurrency wallets secure?
When you purchase cryptocurrencies, you tend to use cryptocurrency wallets in order to store them. However, all the people who store cryptocurrencies like this wonder whether it is a secure method of storage or not. It is important for you to have a clear understanding about it, before you start using a one. Then you will be able to keep peace of mind because you know the level of security and protection that is offered to the coins you purchase.
As the first thing, you need to keep in mind that the security of cryptocurrency wallets vary from one wallet type to another. In other words, the exact type of cryptocurrency wallet you use, such as online wallet, mobile desktop, hardware or paper, offer a different level of security to you. In addition, the service provider would also create a major impact on the level of security that you will be able to get at the end of the day.
Storing your cryptocurrencies in an online server can be risky. That’s because the online wallets are exposed to a variety of vulnerabilities. If a hacker gets hold of the server, there is a possibility to gain access to your digital coins as well. On the other hand, the offline wallets cannot be hacked. That’s because the offline wallets are not connected to any network. They are not relying on any third party to ensure security.
Due to this reason, the service providers who offer online wallets have taken appropriate steps to ensure the security associated with them. Therefore, the vulnerability linked with hacking has been reduced by a great extent. As a result, you will be able to keep peace of mind when you are using an online wallet. All you have to do is to select a reputed and a reliable service provider. Then you don’t need to worry about losing your money or private keys.
If the online wallet is hacked and if a hacker transfers the coins in your wallet to another one, you will never be able to get them back. Due to this reason, you need to be extra careful about the security of the coins that are stored in a digital wallet.
How to stay safe when storing coins?
To overcome the negative consequences, there are some precautionary steps, which you can take in order to store the coins safely. Here is a list of some of the most prominent precautionary steps out of them.
- Update your software
You need to keep your software up to date at all times. If you can do it, you will be able to introduce the newest security enhancements to your wallet. Therefore, you must regularly check for the updates that are available in the online wallet software. In addition, you should also update the software that you use to store the coins in your mobile or computer as well.
- Take backups of the wallet
It is a good habit to take backups of your wallet on a regular basis. You should only store a small amount of digital coins for your day to day use on an online wallet. Then you can keep the rest of the wallets in an environment that has a high security. Offline storage or cold storage is a good method to keep the rest of the coins securely. However, you need to take backups of it on a regular basis.
- Add extra layers of security
You can also add additional layers of security, such as complex passwords to provide maximum protection to the digital coins that you store.