When the founder of QuadrigaCX, Gerald Cotten, died on December 9, 2018, investors lost a cool $190 million of cryptocurrency because they could not access the platform. Investors can lose their cryptocurrency investment through hackers, loss of the storage device, or loss of password. To avoid loss of digital currency to such events, the following are the best ways one can keep their digital currencies safe:
Use reputable wallets
Reputation is an important quality for any investment platform. It beats logic to trust a wallet that has a little reputation when it comes to managing customer investments. Moreover, with the rise in popularity of cryptocurrency, many fraudsters have come up with strategies to scam investors, hence the need to be extra vigilant in choosing the right wallet or trading platform.
Spread out your investment
One of the smartest ways an investor can increase the safety of their investment is to divide and spread out their portfolios. This minimizes the potential losses just in case of an unfortunate eventuality. Spreading out investment involves both investing in multiple cryptocurrencies and using multiple storage services.
Use strong passwords and two-factor authentication
Strong passwords can help keep your cryptocurrency safe. You must avoid using simple, common words/names or figures like date of births in passwords because intruders can easily guess possible passwords when they are on a mission to steal your cryptocurrencies. Two-factor authentication is also useful as it adds a second layer of protection to your existing passwords.
Backup your keys
Keeping a backup of your private keys is one of the best ways of ensuring the safety of your wallet. Backups are important because when you lose the primary storage facility you can always access the keys from the backup. One of the best ways to do this is to use an offline wallet alongside cloud data to back up your private keys.
Make use of a cold storage wallet
Offline crypto cold storage wallets are considered the best for cryptocurrency. This is because hackers primarily target online exchanges, hence offline wallets tend to be safer because they have all the necessary security shell to prevent any unauthorized access.