ear-round, users experience crypto hacks with billions lost annually. Most people, especially new do not know how to securely store their cryptocurrencies and that’s why in this article, I will share the best security measures to follow for storing your crypto assets.
When you are your own bank, you must provide your own security.
Having full control over our assets comes with ultimate perks but comes with many risks that we can't ignore. There are thieves in all walks of life. They want what you have, but the only way they will have it is by taking it from you! Let’s prevent any such mishappenings.
Table of Content
- Centralised Exchange (CEX) Security
- Devices & Cryptocurrency Security
- Seed Phrase (Private Key) Security
- Burner Wallets
- DeFi (Web) Wallets
- Hardware Wallets
- Safety dApps & Websites
- Conclusion
Centralised Exchange (CEX) Security
Firstly, I shouldn’t have to tell you this, but NEVER store your cryptocurrencies on a Centralised Exchange (CEX). It’s just as bad or even worse than having your assets in a bank. You haven’t got any control within a CEX. They can freeze and obtain your CEX assets in a flash…
Devices & Cryptocurrency Security
Next, let’s cover which Devices we recommend using when you explore the world of decentralised finance (DeFi).
Always use a computer or laptop. Only use your personal desktop. Never use a public desktop. There could be malware ready to snatch your seed phrase.
It’s always recommended that you never store large amounts of crypto on a mobile device, unless of course it’s got an in-built hardware wallet, like the new Solana Mobile! If you do use a Mobile Wallet, it should only be used as a burner wallet.
Seed Phrase (Private Key) Security
Talking about seed phrases, how do you store them?
A seed phrase is the KEY to your entire wallet. The seed phrase is the MOST important aspect of crypto security. Every single DeFi wallet provides its users with an exclusive set of 12-24 words, known as a seed phrase.
Where and how you store your seed phrase will determine how good your crypto security is. Depending on your net worth, you may not have to follow every single security measure. There are many advanced methods, but like Bruce Lee said “Simplicity is the key to brilliance”.
I personally follow the strictest security measures. Here are my recommended essential and advanced seed phrase procedures, there will be a reason for every security method:
Essential Seed Phrase (Private Key) Tips
- NEVER store your seed phrase on a digital device. Many people make the error of writing down their seed phrase on a note, document, email or even password manager. Everything online and accessible via the internet can be compromised by a hacker.
- Store your seed phrase offline. Your seed phrase is best kept on a piece of paper or a steel sheet and kept in a well-hidden spot.
- Divide your seed phrase into multiple parts, e.g. 4 words on different paper/steel sheets and hide them in different locations.
- Use a hardware wallet! Hardware wallets like Trezor (LINKKKKKKKKKKKK) & Ledger store crypto offline, in cold storage. Your hardware wallet will also store your seed phrase offline with specialised firmware that prevents any external access.
- Memorise your seed phrase.
- Never put all your eggs in one basket. That is a saying that has always stuck with me. You should have as many wallets as possible. Divide up your assets. If one wallet gets drained, it might suck but at least you haven’t lost everything!
Advanced Seed Phrase (Private Key) Tips
- Use a Multisignature (multisig) Wallet. Multisig wallets offer extremely powerful security as they require 2 or more seed phrases/private keys to sign off any transaction! To access the wallet or to use it in any way, requires the action of every user/private key that is associated.
- Store your seed phrase in a fireproof vault/safe. If someone were to break in, a high-security safe can prevent the burglar from taking your seed phrase!
- Bury your seed phrase. It might sound crazy, but who would ever find it? Don’t forget to protect it before burying it!
- Safety deposit boxes. Many banks have safe deposit boxes where you can put almost anything in them, obviously a paper with your seed phrase is acceptable. They are fully guarded, however out of your own hands.
- Have multiple homes? Divide your seed phrase onto separate steel sheets and plant them in safes/vaults across a variety of your homes.
Burner Wallets
Now you understand the importance of keeping the seed phrase/private key of your main wallets extremely secure. You are probably now wondering how to buy micro-cap cryptocurrencies such as MemeCoins without risking your wallet security. Simply, create a burner wallet!
A Burner wallet is just a new account (Wallet) set up in your DeFi wallet such as Metamask and is a separate wallet to your main account wallet which you are trying to protect. The Burner wallet will have a unique seed phrase (private key) that is also different to your main account/wallet.
Having a burner wallet is crucial. As I mentioned, you should have multiple wallets to safely store your valued assets. However, a burner wallet has the primary use of buying high-risk assets and interacting with risky smart contracts. Most people use them to buy MemeCoins.
DeFi (Web) Wallets
Cryptocurrency wallets such as Metamask, TrustWallet, Phantom etc. are primarily used to interact with decentralised applications (dApps) and this is where you can easily fall victim. There are various ways users can get their DeFi wallet’s drained (hacked), is when they either:
- Sign transactions without reading/understanding the message
- Connect your wallet to malicious websites
- Clicking on malicious links
- Approving malicious smart contracts
- Claiming malicious airdrops/rewards
- Sharing your details (seed phrase)
- So much more…
This is why it is important to have a burner wallet, as we have repeatedly said. Separate low-risk and high-risk wallets. Here is a list of the best and most popular DeFi wallets, alongside our step-by-step YouTube tutorials:
Metamask
Notoriously the most used Ethereum-compatible crypto wallet, which is free to download as a Google Chrome extension or even on mobile (refer back to device security).
Metamask has a great user interface and you will enjoy the Metamask Portfolio section!
How to Set Up Metamask - Easy YouTube Tutorial
Trust Wallet
Some would say Trust Wallet is even better than Metamask. That would all be based on opinion. None the less, Trust Wallet offers an astounding user experience!
Coinbase Wallet
Mostly known for its centralised exchange (CEX), Coinbase is expanding into the delicious world of DeFi, where anything is possible. The Coinbase Wallet has recently become a popular choice, especially for new crypto and DeFi users. This crypto wallet can store everything from Bitcoin, Ethereum and even MemeCoins such as Shiba Inu etc.
Phantom Wallet
Amongst the most popular is the Phantom wallet, which is famous for being able to store and interact with Solana dApps and assets, as well as Ethereum (ERC-20) assets and dApps!
Although there are many other wallets, these are the most popular as it stands.
What we highly recommend and have mentioned a few times in this article, is the need for a hardware wallet. Hardware wallets can be connected to Metamask and your web wallets, therefore you can use your web wallets as the interface of your hardware wallet. This will dramatically increase your crypto security. So let’s take a look at some solid hardware wallets.
Hardware Wallets
We can’t stress enough how important it is to use a hardware wallet. If you ask anyone who has experience with crypto and blockchain technology, they will tell you the same thing. We have compiled a small list of popular and secure hardware wallets that are compatible with 99% of the leading DeFi wallets.
Trezor
Trezor is definitely a favourite in the world of crypto. They are known for their easy user interface, ultra-secure technology and sleek desktop app! There are two versions of the wallet, depending on your budget. If you ask us, the Model T is the best option (it’s also a touchscreen device).
Trezor Model One
Price - €69
Supported Cryptocurrencies - 1,289
Popular for newcomers who want a great first hardware wallet that stores Bitcoin, Ethereum, Litecoin etc. The Model One is a great choice before advancing onto the Model T. Both wallets have immense security.
Trezor Model T
Price - €219
Supported Cryptocurrencies - 1,456
Known as the best crypto wallet in the world with its supreme security with bonus features, 1.54’ Colour LCD Touchscreen and vast interoperability! Most would recommend one to get a Model T when storing cryptocurrencies, especially in large amounts.
Ledger
Once the most popular hardware wallet is now 2nd best. Although still a great option, Trezor is still the best all around. Over 6 million people own a Ledger and they have some good variations for all budget ranges. Once again we will list Ledger hardware wallets that are available to purchase.
Ledger Nano S Plus
Price - €79
Supported Cryptocurrencies - 5,000+
This is the basic Ledger wallet which is not the best in terms of its user interface. It may be confusing to newcmers, but is also good for its value.
Ledger Nano X
Price - €149
Supported Cryptocurrencies - 5,500+
Possibly the most popular Ledger on the market, as it is Bluetooth-compatible, and has access to more cryptocurrencies.
Ledger Stax
Price - €269
Supported Cryptocurrencies - 5,500+
Coming soon is the Ledger Stax, which looks very impressive for its enormous 3.7” Touchscreen display, Bluetooth compatibility, customisability and so much more. Although it’s expensive, the overall user experience will be much better!
Safety dApps & Websites
When it comes to interacting with dApps and buying or selling cryptocurrencies on decentralised exchanges, you will come across smart contracts that will require signing and/or transaction confirmation. It is important to use your network explorers and safety dApps such as revoke cash, which allows you to revoke (disable) old or unwanted smart contracts or signatures.
This can be done on 99% of networks (both Layer 1s and Layer 2s).
Explorers can be found by heading into your wallet, choosing your network, clicking the settings button and heading over to the network explorer page.
Here is a small list of Network Explorers:
For an alternative all-in-one platform, you can use Revoke Cash which allows you to check and revoke any smart contract or signature on almost every network in existence!
Conclusion
There are many alternative ways of securing your cryptocurrencies, however, everything we’ve listed in this article is what most users perform as ‘best practice’. Most importantly, you act cautiously before clicking on any links, approving any smart contracts, signing any signatures or anything else you would consider risky. Don’t forget to use a hardware wallet if you plan on sticking around long-term!
It’s better to be safe than sorry.
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