Tips to Safely Own Cryptocurrencies

Cryptocurrency ownership by American adults has grown from 30% in 2023 to 40% in 2024. According to Security.org, almost 93 million people in the US now own crypto assets, and over the coming year, 63% of crypto owners want to add to their holdings. But it is essential to do this in a safe, smart way. In this article, we explore the most important things to know to own and safely hold cryptocurrencies.

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Understand the Different Ways to Hold and Store Crypto

Digital Wallets: For the most effective asset security, consider using a digital wallet, which grants you total control over your assets via private keys. Digital wallets come in these main types:

• Hot Wallets: A hot wallet is a digital wallet that is connected to the internet and actively used for storing and managing cryptocurrencies. It can be an appealing starting point for newcomers to the crypto world as it is online and easy to download so you can buy and sell crypto quickly. A notable example of a hot wallet is RockWallet.‍
• Cold Wallets: Offline storage options like hardware wallets (e.g., Trezor and Ledger) provide security by protecting your private keys from online hackers. Still, cold wallets can sometimes be less convenient to access, requiring a physical connection to a device and additional steps for transactions. Plus, if you lose access to your hardware wallet or forget the recovery seed, you risk losing access to your funds permanently. ‍
• Self-Custodial Wallets: Self-custodial wallets, also known as non-custodial wallets or self-hosted wallets, are digital wallets where users have complete control over their private keys, enabling them to manage their cryptocurrency assets independently. Unlike custodial wallets, users are responsible for the security of their private keys, typically stored as a seed phrase or a hardware device. Self-custodial wallets prioritize user autonomy, offering heightened security against third-party breaches or malfeasance. RockWallet is a notable example of a self-custodial wallet emphasizing privacy, security, and user control. It provides a seamless and user-friendly interface while enabling users to retain full ownership and control over their digital assets, making it a compelling choice for individuals seeking a robust and trustworthy self-custodial wallet solution.‍
• Custodial Wallets: Custodial wallets are digital wallets where a third party, typically a cryptocurrency exchange or a financial institution, holds and manages the users' private keys on their behalf. Users entrust their cryptocurrency assets to these custodians, who provide services like secure storage, transaction facilitation, and sometimes additional features like trading. While custodial wallets offer convenience and often better user experience, they also introduce a degree of centralization and counterparty risk since users do not have direct control over their private keys. This means that users may risk losing access to their funds if the custodian experiences any security breaches or malfunctions. Therefore, users should carefully weigh the trade-offs between convenience and security when choosing to use custodial wallets.

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Activate Two-Factor Authentication (2FA)  

For new crypto accounts, always activate two-factor authentication if available. 2FA enhances security by requiring verification from two sources, often involving a six-digit, time-sensitive code generated by apps like Google Authenticator. 

To enable 2FA, download a 2FA app, navigate to your digital asset account's privacy settings to enable 2FA, and follow the prompts to scan a QR code and enter the password provided by your 2FA app.

Store Sensitive Information in a Safe Place

Hackers might strike at any time, so, if possible, avoid storing sensitive details like passwords, seed phrases, or backup codes in digital formats. This means no screenshots, emails, or notes on your devices. Instead, opt for writing them on paper and keeping them in a safe place offline. Some people even etch them onto metal cards and store them in a vault.

Utilize a Secure Device

Private data is just as important as financial asset ownership. Avoid the risk of fraud by using a personal computer and a VPN when accessing your crypto accounts. Public networks and computers expose you to hackers who may target your sensitive financial information. Opt for a secure connection to keep your data safe from potential threats.

Know the Most Common Crypto Scams:

Everyone has heard the terrifying tales of users who fell victim to fraud. And to avoid the same traps, it is advisable to know which are the common ones:

• Fake Crypto Giveaways: Often found on social media, these scams promise to double your crypto if you send an amount to a specified address. They often pose as influential people to seem credible. Spot them by checking for minor username changes and verifying account authenticity.
• Trading Bot Scams: These websites often claim high returns that resemble Ponzi schemes. They lack detailed information about the bot and usually contain spelling errors. Research and verify credentials before you act.
• Phishing Emails: These emails often mimic reputable companies, aiming to install malware or steal information. To avoid these, ensure the sender's email is legitimate by verifying official websites and accounts, avoiding clicking unsolicited links, and never sharing sensitive information.

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Bottom Line

So here are some takeaways for you for safe ownership of cryptocurrencies:

1. DON’T send money or cryptocurrency to unsolicited wallet addresses; always keep your passwords and private keys confidential to protect your assets.
2. DON’T trust websites without secure (HTTPS://...) connections; verify their authenticity before proceeding, and take your time making decisions, as there are no reversals in the crypto world.
3. DON’T hold your digital assets in a cryptocurrency exchange; use a self-custody wallet like RockWallet.
4. DO use Two-factor Authentication when setting up your accounts.
5. DO know which scams to avoid by understanding the common crypto scam types and terms scammers use.
6. DO be careful with how you store your passwords and sensitive information and make sure to keep both in a safe place.
7. DO use a secure device and network when accessing your accounts.

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