How to secure crypto funds

Written by AnjiEco Anjinator Pro: Francesco

Cryptocurrency security is an important topic for anyone holding digital assets. In today’s blog, we will discuss how to keep your funds secure, including ways to protect your hot wallet and the benefits of using a hardware wallet (also known as a ledger).

First, let's define a hot wallet. A hot wallet is a cryptocurrency storage solution that is connected to the internet. This means that it is convenient for making transactions, but it also means that it is vulnerable to hacking attempts. Hot wallets are best for holding small amounts of cryptocurrency that you plan to use for everyday transactions.

To keep your hot wallet secure, there are a few precautions you can take:

1. Use a strong, unique password: Make sure to use a password that is difficult to guess and not used for any other accounts.
2. Enable two-factor authentication (2FA): This adds an extra layer of security by requiring you to enter a code sent to your phone or email in addition to your password when logging in.
3. Keep your software up to date: Regularly updating your wallet software can help protect against vulnerabilities and security threats.
4. Be cautious of phishing attacks: Be wary of suspicious emails or links that may be trying to steal your login information. Only log into your wallet from a trusted device and avoid clicking on links from unknown sources. Also, download apps only from official sources. Never download APKs or .exe files from the internet as they could be hacked files. Do not approve degen contracts you do not trust. Use this tool to check the contracts you approved -> Token Approvals | BscScan & Token Approvals | Etherscan

While hot wallets are convenient for everyday use, they may not be the best option for long-term storage of large amounts of cryptocurrency. This is where hardware wallets, or ledgers, come in.

A hardware wallet is a physical device that stores your cryptocurrency offline (also known as "cold storage"). This means that it is not connected to the internet, making it much more secure against hacking attempts. Hardware wallets are considered to be one of the safest ways to store cryptocurrency. Make sure to buy hardware wallets ONLY from the manufacturer. Don't buy from third-party sellers as it could be manipulated.

Would you rather get it 20$ cheaper or lose your life savings?

Example:

• X-company sold a ledger with the seed phrase already created.
• X-newbie_user thought this is how it works.

Conclusion: Funds got stolen.  

One of the main benefits of using a hardware wallet is that you have control over your private keys. Private keys are a string of characters that allow you to access your cryptocurrency. If you store your cryptocurrency on an exchange, the exchange holds the private keys and has control over your funds. With a hardware wallet, you are in control of your own private keys and therefore have full control over your funds.

However, there are also some negative aspects to consider when using cold storage: 

1. Inconvenience: Cold storage can be inconvenient for everyday use because it requires you to physically access the hardware wallet in order to make transactions. This can be time-consuming and may not be practical for those who need to make frequent transactions.
2. Risk of loss or damage: Hardware wallets are physical devices, which means that they can be lost, damaged, or stolen. This can be a major issue if you are storing large amounts of cryptocurrency in cold storage and do not have a backup.
3. Risk of hardware failure: Hardware wallets can also fail due to technical issues or wear and tear. If your hardware wallet fails and you do not have a backup, you may lose access to your cryptocurrency.
4. High upfront cost: Hardware wallets can be expensive.

In summary, keeping your cryptocurrency secure is important. For small amounts of cryptocurrency that you plan to use for everyday transactions, a hot wallet with strong passwords and 2FA can be a convenient option. However, for long-term storage of large amounts of cryptocurrency, a hardware wallet is a safer choice.

By following these tips and using the right storage solution for your needs, you can ensure that your funds are well protected.

Finally, there are risk associated with both types of storage:

A seed phrase, also known as a recovery phrase or backup phrase, is a sequence of words that is used to restore access to a cryptocurrency wallet. It is important to keep your seed phrase safe and secure because it is the only way to access your cryptocurrency if you lose your login information or hardware wallet.

Here are some tips for keeping your seed phrase secure:

1. Keep it private: Do not share your seed phrase with anyone, not even with friends or family.
2. Store it in a secure location: Do not store your seed phrase on your computer or any device that is connected to the internet. Instead, consider writing it down on a piece of paper and storing it in a secure location, such as a safe or a lockbox.
3. Use multiple copies: Consider making multiple copies of your seed phrase and storing them in different locations. This can help protect against loss or damage to a single copy.
4. Don't do copy-paste: Phones and computers keep track of the copied words, even for longer time. If the device you are using got hacked, a malicious software could read the clipboard and steal the seed phrase. 

And you? Do you already own a cold storage for your cryptocurrencies and in particular, Anji?

The Anji team wishes you a happy New Year!