This is how you keep cryptocurrencies safe
However, securely storing your cryptocurrency is easier than it may seem at first glance. This guide will show you the best way to keep crypto safe. Getting cryptocurrency is one thing while storing it securely requires a whole different set of skills and knowledge. This guide will show you how to protect your money, choose the right wallet, and avoid the most common crypto security pitfall
How to Identify a Safe Exchange to keep crypto safe
There’s no guarantee that you won’t fall victim to another high-profile hack, but choosing a reputable and highly secure exchange will reduce your chances significantly. The best and most reliable platforms are open to the level of security they offer and offer you a wide variety of tools to help secure your account. Here are the most common security practices to look for when choosing an Exchange.
HTTPS. Secure exchanges have a valid HTTPS certificate. Your browser will automatically confirm this by displaying a lock in the address bar. HTTPS is an encrypted version of the HTTP protocol. It prevents the collection and modification of data that you send to a web server. Every reputable cryptocurrency exchange should have it.
A good exchange doesn’t allow you to set a weak password. A strong password prompts you to use a mix of uppercase and lowercase letters, symbols, and numbers to make sure no one can raw enforce it.
Two-factor authentication (2FA). Having your accounts protected with 2FA is crucial. Most exchanges offer multiple 2FA methods including software, SMS, and hardware devices. If there isn’t a way to secure your account with 2FA then the platform is pretty insecure. Also, hackers can forge your phone number, so the weakest form of 2FA is SMS authentication. Try to avoid this when more secure options are available. The most common practice is to set up two-factor authentication using the Google Authenticator. It’s a simple, but safe and effective approach.
Cold storage. Check if the exchange is using cold storage to save users money. It is much more difficult to steal funds that are locked offline than those that are kept in a hot wallet. These are considered as the best way to keep crypto safe.
Possibility of whitelisting IP and withdrawal address Check whether you can whitelist certain IP addresses for the connection to your stock exchange account. When activated, it automatically blocks logins from other locations. Alternatively, some exchanges offer a way to whitelist your payout addresses. If you can do this, the exchange will only allow your money to be withdrawn to the previously approved addresses.
Other Precautions: Exchanges use many other security tools such as multi-signature, suspicious behavior alerts, email encryption, phishing protection, and others. Extra security measures certainly won’t hurt you, and as long as they’re implemented well, they make the exchange a pretty safe cache for your cryptocurrencies.
Cryptocurrencies are still completely unregulated so most platforms are not required to follow FDIC reporting regulations or investor protection procedures. Still, some exchanges take extra precautions and ensure their funds against theft. While this is a great marketing point, most of these insurance policies do not protect individual accounts and only apply to the exchange as a whole.
Well-known platforms that insure their funds are Coinbase and Coinbase Pro, Circle, Gemini, and Xapo.
The safest crypto exchanges of 2019
So which exchange should you trust? According to the Exchange Security Report, the most secure cryptocurrency exchanges are:
- Kraken (security grade – A)
- Cobinhood (A)
- Poloniex (A-)
- BitMEX (A-)
- Bitfinex (A-)
- Bitlish (A-)
- BitMart (A-)
- BtcTurk (A-)
- Coinbase Pro (A-)
- GOPAX (A-)
- HitBTC (A-)
- KuCoin (A-)
Regardless of all the security measures put in place by exchanges, it is still foolish to trust them unconditionally. As the history of exchanges shows, no platform is hackproof, and problems always arise when you least expect them. So it’s better to take matters in hand and secure a private digital wallet. As a renowned cryptanalyst and security entrepreneur, Andreas Antonopoulos says:
Keep cryptocurrency safe through Bitcoin Wallets
In the case of cryptocurrencies, participants use a wallet as an electronic purse in which they store the bitcoins. Every wallet is unique. It is a long string of characters that indicates the number of bitcoins in the owner’s virtual wallet. The personal data of the owner are not saved, each wallet is kept anonymously. Users can choose one of these wallets:
- Mobile wallet on your smartphone or tablet
- Desktop wallet for the PC
- Online wallet
- Hardware wallet as a USB stick or hard drive for storing bitcoins
- Paper wallet as a document with copies of public and private keys
The address of the wallet consists of a public key. With this public key, Bitcoins can be sent to other participants. Ownership of the digital currency is expressed by a private key. Every user should keep this private key safe or save it. As soon as another person knows this key, they can dispose of the digital money in the associated wallet.