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How to protect your cryptocurrency wallet?

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By cyphershieldtechPublished about a year ago 4 min read

Together with its volatility, one of the concerns against cryptocurrencies is the possibility of fraud or hacking. Those who are unfamiliar with the world of crypto assets may find it difficult to figure out how to preserve their bitcoin wallet. Yet, it is important to note that security risks to digital currencies are not particularly connected to blockchain technology. They are connected to interfaces used by outside parties to access your network. Namely, hardware used to hold wallets and private keys, as well as online marketplaces for cryptocurrency.

It should be noted that neither governments nor central banks have any control over cryptographic assets. Hence, it is up to us to take the appropriate precautions to protect our money. Also, there is a very slim chance that lost money can be recovered.

It's not a good idea to base your decision on whims, paranoid pictures, or anything else similar while deciding how to protect your cryptocurrency wallet. Instead, it stands for an activity in line with the necessity to look after and defend our assets from dangerous hackers. This post will show you how to safeguard your wallet against hackers. Here's how to keep your cryptocurrency, though, before that.

How to store cryptocurrencies?

The device that enables our access to bitcoins is a virtual wallet. Our crypto assets do not physically dwell in a wallet, unlike the conventional wallet we keep in our pants pockets; instead, they are stored on the blockchain.

How is the method progressing? The private key, public key, public address, transaction history, and balance of our coins are all stored in the digital wallet. The private key, on the other hand, serves as the foundation of the entire crypto asset custody system. This key generates the public key which, in turn, produces a public address.

The opening remarks: It can be shared with any user, as the name would imply. Hence, we share our wallet's public address, which functions like a bank code, if a friend wishes to give us bitcoins.

The private key: It needs to be guarded with care. And it is because of it that we can only offer cryptographic confirmation of the source of a person's bitcoins and allow transactions from our wallet to theirs.

How therefore can you safeguard yourself?

Given the foregoing, we may suggest certain actions you can take to increase your security when using this currency, keeping in mind the need to safeguard both your identity and your wallets from potential online theft.

safeguard your identity

You should use caution while disclosing your transaction data in open areas like the internet. This enables you to keep your identity and cryptocurrency address private.

Make use of a "escrow service"

You can utilise a "escrow service" when you need to buy or sell something but are unsure of who is on the other side. In such circumstances, the party that must make the payment submits their bitcoins to the escrow service in the hopes of receiving the sought item.

The seller dispatches the agreed-upon item at this stage knowing that his money is secure with the custodian. The buyer notifies the custodian of the circumstance after receiving the product so that he can complete the transaction.

encrypt your wallet

Encryption of wallets is essential, especially when stored online. It goes without saying that using a strong password is always required. To do this, we can encrypt files that contain sensitive information using technologies like DESlock +.

Much better if the entire system disc or user space, where these files are stored, can be encrypted.

Don't forget double authentication

In order to identify the online storage services that are actually reliable, a thorough screening method must be used. And even then, it's important to remember that any vendor's systems could be shown to contain flaws.

Thus it is advised to use two-factor authentication and, if at all feasible, online services that permit the use of hardware wallets.

Avoid using wallets on mobile devices

You should steer clear of using mobile devices since they could be stolen or compromised, especially when working with significant amounts of money. Additionally, it is preferable to keep the wallet on PCs without an Internet connection in these circumstances.

Consider the use of multi-signature addresses

Use numerous signature addresses for commercial transactions or transactions requiring a high level of security. This requires the usage of numerous keys, which are typically kept on distant computers that are in the custody of authorised persons.

By doing this, a hacker would have to gain access to every computer hosting the keys. His duty will become harder as a result.

Update systems, always

Updates are required for the operating system, other products that operate on it, as well as the Bitcoin clients because, of course, no application is fault-free.

Every sort of virus that is hosted on the computer has the potential to disrupt software wallets, thus it is advisable to have an up-to-date security solution that can produce frequent mass scans.

Delete a virtual wallet when you no longer use it

When a virtual wallet is no longer needed, it must be deleted carefully to ensure that it has been totally destroyed. To replace the wallet file with random data before removing it, run the shred command on a Linux system.

The same procedure must be followed after making the effort to find any duplicates that may have been made, either by a user or a system.

Conclusion

Cyphershield is a blockchain security and smart contract auditing company with experienced professionals and we solve problems through our audit services. We identify vulnerabilities in smart contract code, ensuring the safety of both you and your users. Cyphershield is the first line of digital defense, protecting your smart contract from hacks and exploits. We also provide detailed audit reports so that you can establish trust with your users.

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