How to Safely Store Crypto in 2024

Cryptocurrency theft is more rampant than ever; with over $3 billion worth of cryptocurrency stolen in 2024 alone, protecting your digital assets is more critical than ever. Phishing, frauds, and more complex hackers and malware attacks suggest that the real question here is not how safe your crypto is but how secure enough it is.

The increasing risks to Crypto-security

Cryptocurrency has changed the financial industry, but with innovations comes the question of risks. Crypto is relatively free from the constraints of typical financial systems, making it susceptible to attacks. 

No central authority can protect or recover your assets if they are stolen; hence, the burden is upon you. In 2023, hackers stole billions of dollars in cryptocurrencies and other digital assets through basic vulnerabilities like passwords and phishing. 

One of the most worrisome trends is the emergence of state-sponsored cyber criminals focused on crypto customers. These organizations are far more equipped than regular hackers, and because of this, the stakes are much higher. Knowledge of these threats is half the battle.

Choosing the Right Wallet: Custodial and Non-Custodial

The first principle of safekeeping cryptocurrencies is selecting the appropriate type of wallet. There are two primary categories: custodial and non-custodial. Both have advantages and disadvantages, depending on your security concerns and preferences.

Custodial Wallets

Custodial wallets are held by third-party services like exchanges or crypto service providers who act as custodians. These wallets are portable, often easy to use, and backed by customer service. 

However, they also mean trusting a third party with one’s private keys—which is not good if that service gets hacked.

Pros:

●      Ease of Use: They are easy to use, especially for beginners, and most have integrated help menus.

●      Integration: Most often tied to exchanges, trading is made more accessible.

●      Recovery Options: Custodial services allow recovery if you lose access to your wallet.

Cons:

●      Lack of Control: Your private keys have to be managed, which means that the security of your assets is in someone else’s hands.

●      Risk of Compromise: If the custodial service gets hacked or goes out of business, you could be left without assets.

Non-Custodial Wallets

These wallets allow you to keep your private keys and, therefore, your cryptocurrencies in your possession and not in the hands of any third party. These wallets can be of two types: ‘hot’ wallets, which are software-based and include mobile wallets, and ‘cold’ wallets, which are physical hardware wallets.

Pros:

●      Complete Control: You have your private key, so you are the only one who can spend your money.

●      Enhanced Security: Your wallet is not controlled by any third party, so there is no chance of a centralized attack.

●      No Custodial Fees: You will not be charged for fees common with custodial wallets.

Cons:

●      Responsibility: You are on your own regarding safeguarding and storing your private keys.

●      Complexity: These are more difficult to navigate, mainly if the user is a cryptocurrency beginner.

Hot Wallets vs. Cold Wallets: Which One is Right For You?

In addition to the custodial and non-custodial choices, you must choose between hot and cold wallets. Each has its role and function and associated strengths and weaknesses.

Hot Wallets

Hot wallets are online wallets that can be accessed from the internet, which makes them suitable for frequent use. However, this also means they are more exposed to cybercrime attacks.

Pros:

●      Ease of Access: This is especially suitable for active traders who may require frequent use of their money.

●      Integration: Frequently linked with exchanges, allowing easy trading and managing your funds and securities.

●      User-Friendly: Anyone, including field beginners, can easily install and operate.

Cons:

●      Security Risks: Due to the availability of the internet, hot wallets are more vulnerable to hacking and malware incidences.

●      Not for Long-Term Storage: Because of security risks, it is recommended that people hold limited amounts of cryptocurrency in hot wallets.

Cold Wallets

Cold wallets or cold storage are offline wallets used to store cryptocurrencies. They are the most secure option since they are not internet-connected.

Pros:

●      Maximum Security: Cold wallets are secure because you store your private keys online.

●      Ideal for Long-Term Storage: This is the most suitable solution for creating secure storage for a large amount of digital currency for an extended period.

●      Variety of Options: It comprises the hardware wallet, paper wallet, and even an air-gapped computer.

Cons:

●      Less Convenient: It is not ideal for day-to-day transactions because the wallet must be accessed physically.

●      Risk of Physical Damage: However, if you use a cold wallet that is damaged or lost, you can lose your assets.

Best Practices for Safeguarding Your Crypto

Storing your cryptocurrency goes beyond selecting the right wallet; it involves adopting various measures to safeguard your investments from multiple risks. By adopting these measures, you will be able to significantly improve the safety of your cryptocurrencies and keep them safe in the growing uncertain world of cyberspace.

Use a Combination of Wallets

Using hot and cold wallets is a good strategy that provides reasonable convenience and security. Hot wallets that are online give fast and convenient access to daily operations. However, this accessibility also makes them more vulnerable to the internet risks such as hacking and phishing attacks. 

On the other hand, cold wallets that store your crypto offline offer strong protection against such loopholes. This way, you can avoid the pitfalls of both hot and cold wallets but reap all the benefits of both wallets. 

This dual approach ensures that your assets are easily retrievable while protecting your investments from some of these risks.

Back-Up Your Recovery Phrase

A seed phrase, or a recovery phrase, is a combination of words that acts as the main unlocking code for your cryptocurrency. This series of words is created while setting up the wallet and is used to recover it in case of loss or hacker attack. For safety’s sake, it’s essential to jot down the recovery phrase and keep it safe and away from hackers and other acts of God. 

Computer storage means, which includes cloud services or any other storage media, should not be used at any cost because they can be hacked easily. It is recommended to store the recovery phrase in a fireproof and waterproof container or a backup metal plate designed for this purpose. 

This extra layer of protection is against the physical and digital risks that may render your cryptocurrency access useless in the worst-case scenarios.

Implement Two-Factor Authentication (2FA)

Two-factor authentication (2FA) is one of the most effective security layers that provides additional protection to prevent unauthorized access to an account. 2FA is the process of using two different factors to verify your identity: something you know, a password, and something you possess: a code generated by an authentication app, thus increasing the security of the crypto accounts. 

SMS-based 2FA is not preferred over authentication apps such as Google Authenticator or Authy because SMS can be intercepted. One also needs to safeguard the available backup codes when creating the 2FA. 

These two codes are handy in case you lose your primary authentication device; they ensure that you can regain control of your accounts.

Stay Vigilant Against Phishing and Scams

Phishing scams are common in the crypto world, in which fraudsters try to lure you into surrendering personal information, including your private keys or login details. They are fake websites, emails, or messages created to look like genuine services. 

To counteract the problem of phishing, always compare the address of any site you are visiting with the one displayed in the address bar. Also, make sure that the website you are browsing is secure by starting with ‘HTTPS’ and having a padlock icon. 

Do not respond to emails or messages requesting your details, and avoid making financial transactions through public Wi-Fi, which is very insecure. By being cautious and knowledgeable, you can prevent these attacks as they become increasingly elaborate.

Regularly Update Your Security Practices

Cryptocurrency security is not set in stone; different threats always appear. To remain a step ahead, security practices need to be updated occasionally. This includes your wallet software and devices to ensure they are updated with the latest security patches and firmware upgrades to solve the existing issues and provide greater security. 

Also, knowing what is trending and what threats exist in the crypto market is crucial so you can prepare for them. This means you should constantly check and update your security measures to fend off today’s and tomorrow’s threats and protect your cryptocurrencies.

Conclusion

In 2024, protecting your crypto is not only about employing appropriate instruments but also about out-competing increasingly complex threats. To guard against theft or loss of your assets, you can take measures, including choosing the right wallet, keeping your seed phrase safe, using two-factor authentication, and being wary of phishing scams. 

As already mentioned, the best approach to securing cryptocurrencies is to apply the necessary measures and constantly be on the lookout for threats. 

Are you prepared for the next level of protecting your digital assets, or are you willing to be the next person to be defrauded? The choice is yours—stay informed, secure, and keep your crypto safe in 2024.

For more elaborate information on cryptographic security, visit the National Institute of Standards and Technology (NIST) for the latest rules and regulations.