Originally published on December, 2020 and updated on November 7, 2024

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As a general rule of safety, anyone invested in digital assets should prioritize keeping their crypto wallets safe.

Today, crypto security isn’t just about having the right tools – it’s also about being smart online by taking proactive measures to deter potential breaches. Combining good technology with intelligent practices can significantly reduce the risk of losing digital assets like Bitcoin. Hackers and scammers are always looking for ways to steal, so protecting your wallet is crucial. A report from TRM labs put this into perspective: Between January and June 2024, hackers had managed to steal up to $ 1.38 billion, a significant jump compared to $657 million in 2023.

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Key takeaways

• To secure your Bitcoin wallet, enable Two-Factor Authentication and set unique passwords for different accounts.
• For hardware wallets, keep them safe by encrypting, backing them up regularly, using multi-signature features, keeping your software updated, and protecting your private keys.
• You can prevent hacks by not clicking unknown links and not connecting to public WiFi.

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1. Choose a crypto wallet that fits your needs

Picking the right crypto wallet is vital to keeping your digital coins safe. There are many types to choose from, each with pros and cons.

• Hot wallets are easy to use and great for quick trades. They’re always online, so you can access your funds anytime. But this also makes them less secure.
• Cold wallets, on the other hand, stay offline. They’re harder to hack, making them perfect for long-term storage. But they’re less handy for everyday use.

Some people like to use both. They keep most of their crypto in a cold wallet and just a bit in a hot wallet for trading.

Think about what you need. Do you trade often? A hot wallet might work best. Are you holding for the long term? Go for a cold wallet.

Also, check what coins the wallet supports. Not all wallets work with every type of crypto.

Lastly, look at extra features. Some wallets let you buy and sell crypto right in the app, while others offer ways to earn interest on your coins.

Take your time to compare options. The right wallet will keep your crypto safe and make your life easier.

2.. Enable Two-Factor(2FA) Authentication

Two-factor authentication (2FA) is a must-have security feature for crypto wallets. It adds an extra layer of protection beyond just a password.

To set up 2FA, users must download an authenticator app like Google Authenticator or Authy. These apps generate unique codes that change every 30 seconds.

Next, they should find the 2FA section in their wallet’s security settings. Most wallets have a clear option to enable 2FA.

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“Two-step verification via SMS can prevent 100% of automated attacks, 96% of bulk phishing attacks, and 75% of targeted attacks”. – Google research

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The wallet will show a QR code or provide a secret key. Users can scan the code or manually enter the key into their authenticator app.

Once set up, the wallet will ask for the current 2FA code and the password for logins, making it much harder for hackers to break in.

It’s important to save backup codes in a safe place. These come in handy if the phone with the authenticator app is lost or broken.

Some wallets offer additional 2FA options like SMS or email verification. However, authenticator apps are generally more secure.

Remember, 2FA isn’t foolproof but is a big step toward better security. It’s a simple way to add extra safeguards to crypto assets.

3. Encrypt your Bitcoin wallet

Encrypting your Bitcoin wallet adds a crucial layer of security. It’s like putting a strong lock on your digital safe.

To encrypt your wallet, you’ll need to set up a password. Choose one that’s hard to guess but easy to remember. Mix upper- and lowercase letters, numbers, and symbols for the best protection.

Most Bitcoin software wallets offer encryption as a built-in feature. Here’s how to do it:

1. Open your wallet app
2. Go to settings or security options
3. Look for “Encrypt Wallet” or similar
4. Enter your chosen password
5. Confirm and save

Once encrypted, you’ll need to enter the password each time you want to send Bitcoin. This extra step helps keep your funds safe from unauthorized access.

Remember, you might lose access to your Bitcoin if you forget your encryption password. It’s smart to write it down and store it somewhere secure, away from your computer.

Encryption isn’t foolproof, but it’s a strong defense against theft. It’s essential to keep your wallet on a device that could be lost or stolen, like a phone or laptop.

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Learn more: How to create a strong Bitcoin wallet password.

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4. Backup your entire wallet regularly

Keeping your crypto safe means backing up your whole wallet often. It’s easy to forget, but it’s super important. Think of it like making copies of your house keys.

To start, find the backup option in your wallet’s settings. It’s usually called “backup wallet” or “export keys.” Click that and follow the steps.

You’ll get a file with all your important info when you back up. This includes your private keys and transaction history. Store this file in a few different safe places. Here are some good options:

• USB drives (keep them in separate locations)
• Paper copies in a fireproof safe
• Cloud storage (but be extra careful with security)
• Safety deposit box at a bank

Don’t just do this once and forget about it. Set a reminder to update your backup every few months. This is especially important if you’ve made new transactions or added new cryptocurrencies to your wallet.

Remember, if you lose access to your wallet and don’t have a backup, your crypto could be gone forever. It’s better to be safe than sorry. Regular backups are a simple way to protect your digital assets.

5. Utilize the multi-signature feature

Crypto owners can boost their wallet security with multi-signature technology. This feature requires multiple private keys to approve transactions.

Multi-signature wallets act like a shared safe. Instead of one person having full control, several people hold keys. You need a set number of these keys to open the safe.

This setup has big benefits:

• It stops one person from misusing funds • It protects against theft if one key is lost • It allows shared control of business accounts

Setting up a multi-sig wallet is easy. Most major crypto platforms offer this option. Users pick how many keys are needed and who gets them.

You might have three keys for personal use. You keep two, and a trusted friend has one. This way, you’re covered if you lose a key.

Businesses love multi-sig wallets, too. They can give keys to different team members, spreading out control and reducing risk.

It’s smart to use a multi-signature wallet. It adds a strong layer of protection to your crypto funds and is flexible enough for both personal and business needs.

6. Keep your software updated

Keeping your crypto wallet software up-to-date is crucial for security. Developers often release patches to fix bugs and address newly discovered vulnerabilities.

Regular updates help protect against the latest threats. This applies to both software wallets on your devices and firmware for hardware wallets.

Updating your wallet software is a simple yet effective way to enhance security. It’s like putting a stronger lock on your digital safe.

Remember your computer’s operating system and antivirus programs. They play a big role in your overall digital security.

Here’s a quick checklist for software updates:

• Wallet software
• Hardware wallet firmware
• Operating system
• Antivirus program

Set up automatic updates whenever possible. This way, you won’t forget to install important security patches.

If your wallet doesn’t offer automatic updates, create a reminder and check for updates at least once a month.

Before updating, always verify you’re downloading from the official source. Hackers sometimes create fake update files to trick users.

After updating, double-check that your wallet is working correctly. Ensure you can still access your funds and that no unexpected changes have occurred.

7. Use different passwords for different accounts

One key way to protect wallets is to use unique passwords for each account. This makes it harder for hackers to access multiple wallets if one password is compromised.

It’s tempting to reuse passwords, but that’s a big no-no. If a hacker cracks one account, they could gain entry to all of them. Instead, create a strong, unique password for every wallet and exchange account.

Password managers can be a huge help. They generate and store complex passwords, so users don’t have to remember them all. This tool makes it easy to have different passwords without the headache of forgetting them.

Here are some tips for creating diverse passwords:

• Have a 12+ characters long password, both upper and lowercase letters, numbers, and symbols
• Steer clear of common words or phrases
• Avoid using personal information

Don’t forget to change passwords regularly. Set reminders to update them every few months.

8. Never give your private key away

Your private key is like the password to your crypto wallet. It’s super important to keep it safe and secret. Nobody but you should ever know it.

Scammers might try to trick you into sharing your private key. They may pretend to be customer support or offer to help fix your wallet. Don’t fall for it! Legitimate companies will never ask for your private key.

Here are some key things to remember:

• Keep your private key offline
• Don’t share it with anyone 
• Be wary of phishing attempts 
• Use a hardware wallet for extra security

If someone gets your private key, they can steal all your crypto. It’s that simple. Treat it like your most valuable possession.

Some crypto owners split their key into parts and store them in different places, making it even harder for thieves to get the whole key.

Remember, once crypto is stolen, it’s usually gone for good. There’s no bank to call or insurance to claim. Protecting your private key is protecting your money.

Stay alert and keep your crypto safe!

9. Don’t click on unknown or suspicious links

Crypto scammers often use fake links to trick people. They might send emails or messages that look real. But these links can lead to trouble.

It’s important to be careful online. Don’t click on links from unknown sources. This simple rule can protect your crypto wallet.

Scammers get creative. They might send small amounts of crypto to your wallet. This can seem exciting, but it’s a trap. They want you to click a link to claim more.

Here are some tips to stay safe:

• Check the full address of any link before clicking
• Be wary of unexpected crypto deposits 
• Don’t download programs from unfamiliar sites
• Use trusted sources for crypto information

Safe web browsing habits are essential. If a deal seems too good to be true, it probably is.

Remember, clicking the wrong link can put your crypto at risk. It’s better to be safe than sorry. When in doubt, don’t click!

10. Use a secure internet connection

Your internet connection plays a big role in keeping your crypto wallet safe. Public Wi-Fi can be dangerous for crypto transactions. Hackers love to hang out on these networks, looking for easy targets.

Using your home internet or a trusted mobile data connection is best. These are much harder for bad guys to sneak into. If you must use public Wi-Fi, don’t access your crypto wallet or make any transactions.

A Virtual Private Network (VPN) can add an extra layer of security. It encrypts your internet traffic, making it tough for others to see what you’re doing online. This is especially helpful if you’re always on the go.

Here are some quick tips for a secure connection:

• Use a reputable VPN service
• Keep your home Wi-Fi password strong and unique
• Update your router’s firmware regularly
• Enable WPA3 encryption on your home network if available

Strong passwords are crucial for all your crypto-related accounts. Use a mix of letters, numbers, and symbols. Refrain from using passwords across different sites or wallets.

Remember, a secure connection is just one piece of the puzzle. It’s part of the bigger picture in keeping your digital assets safe.

Practice these security tips today

The crypto world changes fast, so ongoing learning is key to staying safe. Stay alert and informed about the latest crypto security practices. Finally, a friendly reminder: Paxful will never ask for your login details. Keep these tips in mind and stay vigilant against potential cyber-attacks. Stay safe!