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How to Secure Crypto Assets and Private Keys

How to Secure Crypto Assets and Private Keys

9 Sept 2022Gridlock

Gridlock cryptocurrency wallet utilizes threshold signatures and social verification to offer the best security in the Web3 wallet industry. 

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How to Secure Crypto Assets and Private Keys

In the past, if you wanted to send or receive money, you had to go to a physical bank and exchange cash or checks. Today, thanks to the advent of digital currency, you can conduct transactions entirely online simply by knowing your private keys. However, this new form of money comes with risks. Because crypto assets are stored electronically, they are susceptible to hacking and theft. That's why it's essential to utilize security tools to ensure you have stored your cryptocurrency safely and that it is accessible by you and only you.

This guide will cover the basics of security for cryptocurrency, including different types of wallets and tips for keeping your assets safe and ensuring you never lose access. We will also guide what to do if your crypto assets are lost or stolen and which security practices security experts recommend. By the end of this guide, you should understand how to keep your crypto assets safe and avoid crypto-related disasters.

The basics of security for crypto assets

When it comes to digital security, there are a few basics that everyone should grab every user's attention. First and foremost, it's essential to understand that governments that print fiat currencies do not typically support digital currencies. Digital currencies have a fundamentally different model wherein there is no central bank to guarantee their value or provide insurance in the event of theft. As a result, it's essential to protect your digital currency holdings. One way to do this is to store them in a digital wallet.

A digital wallet is software that helps you keep track of your digital currency balance and transactions, protecting digital assets. Some wallets also allow you to store other types of digital assets, such as loyalty points or access keys. When choosing a cryptocurrency wallet, it's essential to choose one that offers a high level of security. Many wallets allow you to set up multiple layers of security, such as a PIN code or biometric authentication. In addition, it's also a good idea to choose a wallet that has support from a reputable company.

Digital Assets; Digital Accounts

Another way to protect your digital currency is to store it in a digital bank account. These accounts are similar to regular bank accounts but specifically designed for digital currencies. They offer many of the same features as traditional bank accounts, such as FDIC insurance and multi-factor authentication. However, they also typically offer higher interest rates and lower fees.

Digital banks often have partnerships with major exchanges, allowing you to easily convert digital currency into fiat currency or other assets. Lastly, another way to protect your digital currency is by using a different type of wallet available in the market. Following these basic security measures can help ensure that your digital money remains safe and secure.

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Other Wallet Types, Including Hardware Wallets

There are a variety of wallets available for storing cryptocurrency, each with its advantages and disadvantages. One popular option is the paper wallet, a piece of paper with public and private keys printed on it. Paper wallets are very secure, as they are not susceptible to hackers like online wallets are. However, they can be lost or damaged easily, and users must take care to keep them safe. Another option is the hardware wallet, which stores the user's private keys on a physical device. But can users easily manage hardware wallets? Hardware wallets are also very secure, but they can be expensive and may only be compatible with some types of devices.

Custodial Wallet vs. Non-custodial Wallet

Custodial wallets are another option that allows users to store their funds on an exchange or other third-party service. These wallets are convenient but involve trusting the custodian with the user's private keys.

Nowadays, people prefer mobile cryptocurrency wallets that enable them to keep crypto safe while enjoying non-custodial features, while completely controlling their funds. Finally, users can install desktop wallets and software wallets on a computer or mobile device. Desktop wallets offer a good balance of security and convenience, but they may need to be more secure than hardware or paper wallets since the machine is always connected to the internet.

Many users have multiple wallets to store cryptocurrency safely, which helps mitigate the possibility of a single point of failure, keeping private keys separated and some funds offline. A strategy using multiple wallets, including an online wallet, cold storage (paper wallet), and hardware devices, should all be considered when protecting your crypto.

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What To Do If Your Crypto Wallet Is Lost Or Stolen

If your crypto assets are lost or stolen, there are a few things you can do to try and recover them. First, check your digital security settings to ensure your account is properly secured. If you believe your account may have been hacked, change your passwords and enable two-factor authentication if possible.

Next, check to see if your funds are in a hot or cold wallet. Hot wallets are connected to the internet and, therefore, are more vulnerable to theft, while cold wallets are considered much safer and offline. If your funds are in a hot wallet, you may be able to contact the wallet provider and track them down and recover them. However, if your cold wallet was compromised, it is much harder to trace and the crypto is likely gone for good.

Keeping Your Cryptocurrency Safe

Remember, you are the only person responsible for the safety of your crypto. This single idea is the most important concept to understand when interacting with digital assets. Be sure to take all necessary precautions to protect your crypto, like keeping your hardware wallet or software wallet in a secure location, knowing your recovery phrase or recovery seed, and following all best practices. To secure your cryptocurrency holdings, choose reputable crypto wallets.

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The latest security models on the market involve social verification and distributed keys to assist in recovery should loss-of-access occur. The best example of this is the Gridlock mobile crypto wallet that thousands are using to store their crypto funds and ensure easy recovery in case of loss.