How to Safely Store Crypto and Avoid Online Fraud?

Store Crypto

Cryptocurrency investments have grown extremely popular these days. Many people decided to put their trust and money in these promising digital assets. However, given the decentralized character of crypto coins, many also fear for their money’s safety. In the world of crypto, everything takes place online. This is where you buy and sell coins, and generally, most users also store their cryptocurrencies online. So, if you plan on investing money in crypto coins, how can you safely store them? Here are a few ways to secure these assets.

Digital Wallets

Digital or online wallets also go by the name of hot wallets. As their name suggests, these are not physical storage solutions. The data you put in these wallets, in other words, your crypto coins, is stored in the cloud. This might seem a bit unsafe for the layman who has always kept their money in the bank.

Yet, cloud storage is safe. There are multiple security levels these virtual storage solutions rely on. If you are wondering how to get one of these, there are multiple choices. Different trading platforms offer hot wallets. There are also companies that focus solely on this type of service. Therefore, finding one is not a daunting task.

The Benefits

Online wallets are pretty intuitive. To use them, you simply have to create an account and transfer your crypto there. There are mobile wallets you can easily download and access from your phone and software wallets you can access from your computer.

The main advantage of these wallets is their very nature – they are digital. Therefore, they don’t depend on any type of hardware, which means they’re less prone to failure. Furthermore, these wallets are very easy to access at any time. All you have to do to check your balance or transfer crypto is log in by using your credentials. Also, most wallets are compatible with mobile devices, so you can access them even on the go.

The Risks

However, the major concern regarding these wallets is security breaches. Although all these digital storage methods have multiple layers of security, nothing is 100% safe online. Tech-savvy hackers might be able to bypass the security measures the wallet relies on and access your data.

Offline Wallets

The second type of wallets where you can store crypto coins are offline wallets or cold wallets. These are physical wallets where you register your cryptocurrencies. These wallets work like normal ones except that you don’t put paper money inside. Instead, you use different codes and keys to transfer your digital assets there.

The Benefits

Offline wallets are the predilection storage method for skeptical and cautious investors. They work similarly with keeping your money in a safe. Most of these wallets consist of a piece of hardware. They come in different forms. For example, some companies offer wallets that look and behave like external drives. Other wallets look and work like an USB.

Therefore, you only need to connect them to your device when you transfer your crypto. Afterward, the wallet will safely store your money offline. These methods are considered safe because unlike online wallets, they don’t require an internet connection. Consequently, they can’t be traced and attacked by hackers.

The Risks (Fraud And Scams)

However, this doesn’t mean they are devoid of risks. Although these wallets are unlikely to suffer a security breach, they are prone to hardware failure. In other words, if your wallet gets damaged or starts malfunctioning, you’ll have trouble accessing your finances.

Furthermore, these wallets can get stolen. If the thief also gains access to your private keys, they can get your money. Another example of offline wallets is paper wallets. These are precisely what they sound like – pieces of paper. On them, you store your crypto property. You do this by using private keys and QR codes. The paper holds this information. To access your money, you use the codes. With this information, you can log into a cryptocurrency platform where you can trade or transfer crypto coins.

What is the danger related to these wallets? As you might assume, they are easy to access. Anyone who intentionally or accidentally finds the paper and knows what it contains can access your money.

Read more: How Billions of Dollars for Pandemic Aid Were Swept Away by Scammers in 2021 – recommended article by Diamond Shield Management.

Examples

Online wallets are the most popular way to store crypto property these days. Here are a few places where you can find some of the most reputable online wallets:

  • Binance
  • Kraken
  • Coinbase
  • Gemini
  • Electrum
  • Exodus
  • Redot
  • Metamask
  • Coinomi

Other Safety Measures

Finally, to increase your financial safety while owning crypto, do your research before using any wallet. See what other investors have to say about the solution you plan on using. Moreover, keep your money on a platform that’s insured through FDIC insurance coverage. For example, Binance and eToro are insured by the Federal Deposit Insurance Corporation (FDIC).