Crypto investors cringe when they hear about wallets being compromised. This has been a death rattle for many crypto traders. If this happens, all your funds can be stolen and many times there is nothing that can be done. There are ethical hackers that can restore your wallet, but why leave it up to a stranger? Crypto theft is a reality in 2022 so let’s arm ourselves against this threat.

If you are using a crypto wallet to store your digital assets, then it is important to take steps to ensure the security of your funds. Before you make your first trade, you want to first understand exactly what a crypto wallet is and the different types of crypto wallets. Once you understand the differences between cryptocurrency wallets, the security tips for keeping your cryptocurrency wallets safe and secure will make more sense. Toward the end of the discussion, we’ll review some of the best cold, hot, and hardware wallets, so stick around!

Crypto Wallets Explained

What is a Crypto Wallet?

A crypto wallet is a digital wallet that can be used to store, send, and receive cryptocurrency. Crypto wallets are usually built on blockchain technology and can take the form of either a software program or a physical device. Software wallets can be further divided into hot wallets and cold wallets. There are also hardware wallets that take the form of USB devices that come in various forms. Crypto wallets typically provide users with a seed phrase, private keys, and public keys. These keys are used to access and manage crypto assets. Some crypto wallets also offer additional features such as multi-signature support and two-factor authentication (2FA).

Hot wallets are connected to the internet and can be used for more convenient tasks such as buying and selling crypto assets and sending/receiving funds, all with little effort or investment. Cold wallets are offline and not connected to the internet, which makes them more secure. Hardware wallets are physical devices that can be connected to your computer with a USB cable or to your phone using Bluetooth technology. If you are serious about security, you should store most of your crypto funds in a hardware or cold wallet. Some crypto traders use a hot wallet for particularly risky investments and a cold or hardware wallet for holding more stable assets such as Bitcoin, Ethereum, and stablecoins.

Security Tips

Disconnect From dApps

Disconnect from websites/dApps when you aren’t using them. Perform your trades, then disconnect MetaMask or any other hot wallet from that website. There’s no need to stay connected. At a minimum, each night go into wallet settings and disconnect from ALL connected sites. Do this every day and you’ll reduce the likelihood of being hacked.

Lock Your Wallet

Most wallets come with an option to log out or lock the wallet. Make sure you do this every time you walk away from your computer. It’s common to step away for a minute or two and then forget you were trading, only to come back the next day and see your wallet is still logged in. Don’t be that person. Be an information security warrior.

Make Sure You Use a Strong Password

A strong password should be at least eight characters long and include a mix of uppercase and lowercase letters, numbers, and symbols. Never store your password on a digital device or in a physical location where it could be stolen or lost. Instead, memorize your password or keep it stored in a secure location such as a locked safe. Never share your password with anyone. Not even your crypto wallet provider or exchanges. If someone else knows your password, they could access your funds without your permission. Never use the same password for your crypto wallet as other applications.

Enable two-factor authentication (also known as two-step verification) whenever possible. Two-factor authentication adds an extra layer of security to your account by requiring you to enter a code that is sent to your mobile phone in addition to your password. This makes it much harder for someone to hack into your account and steal your funds. By having this extra layer of security, you can help protect your crypto assets.

Keep Your Software up to Date

Crypto wallets are constantly evolving and improving their security features. It is essential to keep your wallet software up to date to ensure that you have the latest security features. You can usually do this by downloading the newest version of your wallet from the provider’s website. Additionally, many wallets will let you know an update is available when you log in to the wallet. This is important so that a hacker doesn’t gain access to your wallet through outdated software versions.

Don’t Share Your Crypto Wallet Details With Anyone

Your crypto wallet is like your bank account. It should be kept private and only shared with those who you trust. If someone else knows your wallet address or seed phrase, they could access your funds without your permission. So, make sure to keep this information safe and secure. The best way to do this is by memorizing your wallet details or storing them in a secure location. By doing this, you can help keep your funds safe and secure. With a little bit of care, you can help protect your crypto assets from theft or loss.

Don’t Store Large Amounts of Crypto in Your Wallet

If you are holding a large amount of crypto in a hot wallet, it is best to store it in a hardware or cold wallet. This is because hot wallets are connected to the internet and can be more easily hacked. Hardware and cold wallets are offline and not accessible by hackers. For example, it’s nearly impossible for a hardware wallet to be hacked because the user must physically interact with it. So, if you are holding a large amount of crypto, it is best to store it in a hardware or cold wallet to keep it safe.

Use a Reputable Crypto Wallet Provider

When choosing a crypto wallet, make sure to select a reputable provider. There are many scams in the crypto world, so you need to be careful when selecting a wallet. Make sure to do your research and only use wallets from trusted providers. We discuss several reputable crypto wallets toward the end of the article. The most important thing is to ensure you download or buy the wallet from the authorized seller, and not a scam site.

How to Spot Crypto Wallet Scam Sites

When looking for a crypto wallet online, be sure to do your research to avoid falling victim to a scam. There are a few key things to look out for that can help you spot a general scam site:

• The site looks unprofessional or has grammar mistakes
• There is no contact information listed
• The URL is not secure
• The site is asking for too much personal information
• There are red flags in the user reviews

You also need to be cautious of phishing scams. This is when someone tries to trick you into giving them your private keys by sending you a fake email or website that looks like a legitimate crypto service. They will often use the same logo and branding as the real service to make their scam look more convincing. Some of these scams are extremely difficult to spot.

One technique to avoid phishing scams is to immediately bookmark the correct website. This eliminates the amount and types of websites you’ll be connecting to. If you want to experiment with risky dApps, it’s best to have a burner wallet where you don’t care if it gets compromised. Phishing scams are one of the most common ways that people lose their crypto wallets, so it’s important to be aware of them.

Here are some additional tips to avoid falling for a phishing scam:

• Only use official websites and apps for your crypto wallet. If you’re not sure if a website or app is legitimate, do some research on it before using it.
• Be careful of emails and messages that claim to be from your crypto wallet provider. If you’re not sure if an email is legitimate, contact the crypto wallet provider directly to ask. Watch out for scams on Twitter as well, they’re everywhere.
• Never give your private keys to anyone. Your crypto wallet provider should never ask for your private keys. If someone asks for your private keys, they are likely trying to scam you.

Be sure to take the time to research any crypto wallet you’re considering using. A little bit of extra effort can go a long way in protecting your crypto assets. If you have any doubts about a site, it’s best to err on the side of caution and find a different wallet.

Install Anti-Virus Software on Your Computer

If you are going to store your crypto wallet on your computer, it is important to install anti-virus software. This will help protect your computer from malware and viruses that could steal your funds.

Again, don’t click on links in emails or messages if you even remotely suspect the site, link, or email is from a hacker. If you receive an email or message with a link, don’t click on it unless you are 100% sure it is safe.

To further mitigate against hackers, try this antivirus software stack to keep you safe from malicious software:

• rKill – stops any actively running malware programs. This is free software available for download at any time.
• Malwarebytes – removes viruses and malware after they’ve stopped running. I use this anti-malware personally and it works great. There’s a free version but I’d recommend the paid version for the added functionality. It only costs $3.99 per month, but it’s money well spent.
• Adwcleaner – Also removes viruses and malware. There is a free download option.

Do Not Store All Your Crypto in One Wallet

If you have multiple crypto assets, it is best to spread them out across different wallets. This way, if one wallet is hacked, you will not lose all your crypto. So, make sure to diversify your holdings by using different wallets for different assets. For example, you could use a MetaMask wallet for high-risk trades and a hardware wallet to hold your valuable coins like Bitcoin or Ethereum. Or you can link a hardware wallet to your MetaMask wallet PRIOR to interacting with any dApps.

Crypto Wallet Reviews

Trezor Hardware Wallet

The Trezor crypto wallet is a popular choice for those looking for a safe and secure way to store their crypto assets. The Trezor is a cold hardware wallet that is not connected to the internet, making it more difficult for hackers to access. Additionally, the Trezor provides multiple layers of security, including a PIN code and passphrase. The Trezor software suite is intuitive for anyone with computer experience. The Trezor has a touch screen, making it a good choice for those new to the crypto world. There are two models of the Trezor; the Trezor One and The Model T. The Trezor One is the base model and costs $72. The Trezor One is the upgraded version and has an interactive touch screen, costing $260. I personally use a Trezor One and it has performed well and gives me added peace of mind.

 

Ledger Hardware Wallet

The Ledger Nano S and X are hardware wallets that provide cold storage for your crypto. These devices are USB sticks that connect to your computer or smartphone and allow you to transact with your crypto. The Ledger Nano S and X support over 30 different cryptos, including Bitcoin, Ethereum, Litecoin, and Cardano. The Ledger Nano S and X are very secure crypto wallets. The devices are tamper-resistant and have a built-in display that allows you to confirm each transaction. Ledger also offers a companion app for your device that allows you to manage your crypto. The Ledger Nano S and X are priced at $99 and $119, respectively. If you are looking for a secure way to store your crypto, the Ledger Nano S and X are great options.

KeepKey Hardware Wallet

The KeepKey crypto wallet is another popular option for those looking for a safe and secure way to store their crypto assets. The KeepKey is a cold hardware wallet that is not connected to the internet, making it more difficult for hackers to access. Additionally, the KeepKey provides multiple layers of security, including a PIN code and passphrase. The KeepKey has been around for a long time but isn’t as popular or widely used as some of the other hardware wallets.

MetaMask Hot Wallet

While MetaMask is one of the most popular crypto wallets around, it’s important to be aware of its limitations. One of the biggest dangers with MetaMask is that it is a “hot wallet”. This means that it is always connected to the internet, and therefore vulnerable to hacking. However, MetaMask does offer several security features, such as a seed phrase and password protection, that can help protect your crypto assets. Overall, MetaMask is a convenient and user-friendly crypto wallet, but it’s important to be aware of the risks involved with using it. The seed phrase, also known as a mnemonic phrase or recovery phrase, is a list of 12-24 words that you can use to recover your crypto assets if your MetaMask wallet is lost or stolen. It’s important to keep your seed phrase safe and secure, as anyone who has access to it will be able to access your crypto assets.

In addition to a seed phrase, MetaMask also offers password protection for added security. Just keep in mind that online wallets, or hot wallets, are convenient but traders must be vigilant for crypto scams when using them. All it takes is to connect to a single malicious website or dApp and a hacker can steal your keys and gain access to your funds. It’s paramount to ensure you are diligent with the dApps you connect to. I’ve had a wallet compromised in the past and trust me, it’s a terrible feeling.

Trust Cold Wallet

Trust Wallet is a crypto wallet that allows you to store multiple types of cryptocurrencies. Trust wallet is a cold wallet, meaning it stores most of its assets (crypto) on cold storage servers and isn’t always connected to the internet, as opposed to MetaMask which is always connected. As such, the Trust Wallet is less susceptible to hacks and theft. It’s also convenient as you can access your cryptocurrencies at any time. If you are looking for a crypto wallet that is both secure and convenient, then the Trust Wallet is a good option. Trust wallet is optimized for mobile so users can enjoy those sites optimized for smaller screens. It’s available for Android and Apple, so there are no worries about availability. Trust wallet is a good option for those who might want to store smaller amounts of stablecoins for quick conversion into other tradeable assets.

Conclusion

Overall, it is important to be aware of the different types of crypto wallets and their features. Hot wallets are convenient but come with the risk of being hacked. Cold wallets are more secure but can be difficult to use. It is up to the individual to decide which type of wallet is best for them. Trezor, Ledger, KeepKey, MetaMask, and Trust Wallet are all popular choices that offer different features. No matter which wallet you choose, make sure to take all the necessary precautions to protect your crypto assets. This includes keeping your seed phrase safe and secure, using multiple wallets, avoiding phishing scams, and using strong passwords. Bitcoin, Ethereum, and Avax are all popular cryptocurrencies that can be stored in these wallets. Choose the wallet that best suits your needs and take the necessary steps to keep your crypto safe. Thanks for reading and happy trading!