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The demand for crypto assets keeps growing, and today, they have become a prized possession. However, a prized asset has its own risks. People will try to steal and misguide you, and you stand to lose out on your assets. So, knowing how to store your assets and where to store and protect them for the long term is necessary.
Crypto assets will continue to appreciate in value, and if you are unsure how to protect them, these simple tips will help you.
NOTE: Crypto investments involve significant risk. Do not take the views mentioned here as financial advice. Please conduct thorough research before making any investment.
Keeping your crypto assets protected
Understand the value of keys
Owning and safekeeping of the keys that grant you control over your digital funds is of utmost importance. Unlike a bank account, where you can restrict the transfer of assets in case you lose your ATM card with private keys, there is no such provision with crypto. Whoever owns the keys has access to the assets.
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Learn about the different types of wallets
The wallet is where you store your crypto assets. However, there are different types of wallets. There are hot wallets, which are connected to the internet. In many cases, crypto exchanges offer free, ready-to-use hot wallets, which are great for those who wish to carry out spot trading activities.
Apart from hot wallets, there are cold wallets, which are not connected to the internet, and these are the ones best suited for long-term holding of crypto assets. So, storing cryptos in the wrong type of wallet will inadvertently expose you to internet-based risks, such as phishing.
Protect the seed phrase
The seedphrase is a code, which usually looks like a series of twelve random words. However, those twelve random words are your key to recovering your crypto wallet. If you lose the seed phrase, there is no option to press a "forgot password" option to regenerate the seed phrase.
So, when you get the seed phrase, store it in a safe place and keep it protected. Protect it by storing it offline and not as a screenshot on your mobile phone. Finally, keep in mind that your seed phrase does not change when you change your passcode.
Protect the device that has your wallet
In most cases, your mobile phone will have your wallet, so protecting the phone in turn protects your wallet.
So, have a strong password to unlock your phone, avoid using public WiFi on it, and do not download any applications from non-official sources.
Be cautious while granting permission
Most people use their crypto assets to earn passive income, play NFT-based games, or use them in applications that need access to wallets. Any DeFi application you proceed with will require you to grant permission to your wallet or to link your wallet to that application to proceed.
Be cautious while granting permission, and revoke permission when you are not using an application for a long time.
Learn to spot a fake airdrop
Fake airdrops mimic legit token distribution programs to misguide gullible users. Quite often, people are lured by the thought of getting a free token that can later be exchanged for a more stable token. However, with airdrop scams, a token is deposited in your wallet, and the fraud happens only when you try to exchange it with another token.
When trying to exchange the token, you may see an error sign, or you may be directed to malicious pages via problematic links. So, it is a good idea to check for token detection when receiving tokens via airdrops. If the wallet detects the token, proceed with any further transaction.
Run a check before transferring a big amount
It is a good practice to transfer a token amount and do a check before transferring a large volume of crypto assets.
Use different wallets for different purposes
It may be tempting to hold all your crypto assets in one wallet and plug that single wallet for different applications. However, it is a bad practice, and it is best to use a dedicated wallet for DeFi applications, another one for NFTs, another for crypto gambling, and so on. The rationale for doing this is simple: even if one wallet gets compromised, you do not lose all your crypto assets at once.
