If you wish to trade or invest in cryptocurrencies, you need somewhere to store them. You can do this using either a hot or cold wallet. While a hot wallet is not the most secure option, it is the option that many people get started with before switching to a more secure cold hardware wallet. Because you still have to use a hot wallet to buy and sell crypto, you need to ensure it is as secure as possible. We have put together a few tips you can use to achieve this.
Keep Only a Small Amount in the Hot Wallet
Maintaining a large amount of cryptocurrency in your wallet means you are accepting a huge risk should your account or the exchange get attacked. You also attract the attention of a hacker if they ever get hold of your address and can see how much your wallet holds.
Many exchanges allow you to freely exchange your cryptocurrency for fiat currency, and this is something you should be doing regularly. You should consider moving all but a small amount you use for trades to a cold wallet.
Also, consider converting this amount to fiat currency and moving the money to a more secure bank account. To get started, you should look at the crypto-fiat exchange rate. You can find out this exchange rate by using a converter such as the OKX crypto converter at https://www.okx.com/convert which shows you how much your cryptocurrency is worth in fiat currency.
Use a Secure Password
Just like you would use a strong and secure password for your other accounts, you should use one for your hot wallet. Remember that the password will be used to encrypt your wallet and should therefore be strong enough. Consider using a password with at least 16 characters and use a mix of numbers, special characters, and uppercase and lowercase letters for added security.
You can use a secure password manager to store this password, ensuring that the password manager is also secure.
Use Two- or Multi-factor Authentication
A password does not provide enough security which is why many exchanges allow two- or multi-factor authentication. These authentication options let you secure your wallet using more than one method. For example, you can use a password together with a one-time password option for additional security.
You can use apps that generate one-time passwords for better security, but there is also the option of SMS 2FA which you should only use as a last resort.
Update Your Software
You should always keep your cryptocurrency services software up to date to ensure it remains safe and secure. Malicious actors are always trying to break this software, and the latest updates remove known vulnerabilities as they are discovered while also strengthening its security.
Use Multi-signature
Multi-signature utilizes multiple wallets in a single group. Each transaction performed on one of these wallets needs at least three signatures to complete which makes it impossible to steal crypto from one wallet in the group.
You can never be too careful and safe when it comes to securing their hot wallet. Use as many options as possible that are available to you to ensure your cryptocurrency remains safe.
