You should know how to protect your cryptocurrency from hackers. Whether you’re a huge investor or you use a little bit of crypto to shop online, you can use the steps in this article to safeguard your funds as much as possible.
In this article, I’ll share my personal strategy for protecting my funds. Even my strategy isn’t 100% guaranteed to protect your cryptocurrency. However, doing something is better than not doing anything. If you don’t take any steps at all and you lose your funds to hackers, you’ll regret it for the rest of your life.
Store your Crypto Assets in Different Locations
The first thing is to not keep all of your crypto funds in one place. Diversification is always good. Put it on different exchanges. You can also split it through different devices.
Later in this article I’ll show you how I personally split my cryptocurrencies. I track everything on my portfolio with my spreadsheet. So in one column I keep track of my wallets. I can also monitor my ledger device.
I also store some of my crypto on Crypto.com and some on Binance.com. Additionally, I have some on Gate.io. So, pretty much, I keep my cryptocurrencies on these exchanges.
However, I also put some of my long-term crypto investments in a ledger device. That’s a hardware device that you can use to protect your cryptocurrency. I have to pay for it. Usually, the price range for a Nano X ledger is about ЛВ 300 in Bulgarian levs or $170 US dollars.
Since you keep the Nano offline, it’s relatively safe from hackers. You can connect to it via an app on your mobile. If you decide to get it, make sure you buy it through the official website.
Protect your Cryptocurrency by Using a Ledger Device for Long-Term Investments
Your ledger device or any other hardware crypto wallet will keep your long-term investments safe. If you’re planning to hold crypto investments for the rest of your life, it’s best to keep them on a hardware wallet. Keep them off the exchanges.
However, crypto that you’re trading and keeping for the short term can be kept on exchanges. I keep mine on Binance.com, Crypto.com and Gate.io.
If you keep your short-term investments on a hardware wallet, every time you transfer money for a trade, you’ll have to pay fees. So you’ll end up losing money from a lot of trading. It’s not profitable to transfer crypto from a hardware wallet every day.
Protect your Cryptocurrency by Selecting Exchanges that Protect your Funds
You can improve the safety of your crypto by staying on exchanges that have some kind of protection. Your options for protecting your crypto on an exchange will vary depending on the country that you live in.
For example, many of the exchanges in the United States guarantee funds for US citizens. However, if you live in the rest of the world there aren’t any such safeguards.
Crypto.com offers protections to international clients. They have an account protection program that was announced right after they had a huge hack. During that hack, there were unauthorized withdrawals for around 5,000 Ethereum and 500 Bitcoin.
Crypto.com compensated their clients after the hack. They also developed the account protection program to help protect your cryptocurrency. If you are a Crypto.com customer, you should enable multifactor authentication for all of your transactions. You should also set up an anti-phishing code.
Don’t Use Jailbroken Devices
The third tip is that if you want to protect your cryptocurrency, you should not use any jailbroken devices. If you’re affected by hacking, you should also file a police report. However, that might be difficult because some policemen might not know a lot about cryptocurrencies or what forms they should use for filing that type of report. So, this step might not always be appropriate.
Crypto.com customers should complete a questionnaire to support the investigation. All of these steps would be taken by Crypto.com clients. However, some traders wonder what would happen with a smaller exchange.
A smaller exchange might not have the resources to compensate their clients. That’s why, at the beginning of this article, I stated that you should split your cryptos among several exchanges.
Always Protect your Cryptocurrency
Even if you only have a few minutes to do so, you should always take a few steps to protect your crypto. Always aim to stay on several major exchanges, since they can afford to compensate you if they’re hacked. Choose exchanges that offer the maximum protection for your funds based on where you live.
If you have a few thousand dollars worth of crypto that you’re investing for the long term, you should get a ledger device to protect your cryptocurrency. It’s worth it to grab a hardware device so that you can protect your money. It’s better to spend that money then lose all of your crypto in a moment.
If the exchanges that you use offer multi-factor authentication or anti-phishing codes, you should use them for your protection. Always use whatever the exchange provides as a layer of security.
I hope you enjoyed this article. Please share your ideas on how to protect cryptocurrency from hackers in the comments below.