As crypto assets gain popularity, crypto wallet holders aim to keep them in more safe. Crypto assets — such as digital currencies and NFTs — there’s nothing physical to hold onto. Often, you must depend on a code, known as a key, to gain access to your holdings. And if you lose that key, or somebody has stolen it, you lose your assets. Are there any solutions? Sure and XEROF is sharing them with you with great pleasure.
1. Wallet type and Security
You may have come across the concepts of cold and hot storage or wallets. In short, hot wallets are connected to the internet, while cold wallets are not. Hot wallets are the most commonly used since they are simple but are vulnerable to theft or hacking. Cold wallets are considered much more secure since you only connect them to the internet when executing a transaction.
Mobile, desktop, web, and most exchange custody wallets are categorised as hot wallets. In simple words, hot wallets are online wallets that run on internet-connected devices like computers, phones, or tablets. Hot wallets are easy-to-use as they enable users to access their funds at any time and make transactions quickly. But they lack security. These wallets generate private keys on internet-connected devices, which creates a vulnerability.
When choosing a wallet, consider a hybrid approach. It means you hold a small amount of cryptocurrencies in a hot wallet while keeping the bulk of your investment in a cold wallet. Or with a trusted, independent custodian.
XEROF has a next-generation digital asset security. And this is one of the essential priorities for XEROF and its customers. Wallet technology MPC-CMP with hardware isolation to create a multi-layer security technology. So, you don’t need to worry about safety of your cryptocurrency during the transaction.
2. Strong, Unique Passwords
It seems like evident, but many people use their “dates”. When creating passwords, consider using a unique password generator, making them completely random. You may also wish to use a password manager to ensure you keep track of your unique passwords and recovery phrases. Ultimately, you will want to make sure that your passwords are stored securely.
3. Back It Up
Having a solid redundancy plan in place for your digital assets is critical. Protect digital assets with a reliable backup plan, and perhaps even a backup for the backup!
4. Centralised Cryptocurrency or Decetralised?
The majority of crypto users prefer to store their crypto holdings on centralised crypto exchanges, and for good reasons. Crypto exchanges constitute the easiest and most user-friendly ways to buy cryptocurrencies. There are many crypto exchanges that provide users with hundreds of trading pairs. And they create an easy-to-use and freindly platform.
However, these exchanges are always prone to security breaches and hacks, as centralised crypto exchanges hold their users’ private keys. As a result, popular exchanges have billions of dollars worth of digital assets. It makes them an attractive option for hackers.
5. Reputable provider
Exchanges, brokerages, mobile apps… cryptocurrency service providers abound! There’s an important and growing volume of providers and it can be difficult to know where to start.
Unless you plan on trading on a daily basis, choose to keep your cryptocurrency with a reputable and unconflicted custody provider.
For instance, XEROF is a swiss regulated exchange that provides the custody solely for the crypto exchange transaction. It is usually conducted within a few days. The wallet address is under the clients name, where the client can send the amount in crypto. We hold cryptocurrency on on-chain segregated wallets on behalf of the client before the exchange.
6. Estate Planning
The rise of investments in cryptocurrencies is leading to some disruption in estate planning. Unlike traditional or physical assets (like your house, jewelry, and bank account), planning to leave your digital investments to your next of kin requires a new type of attention. To ensure your loved ones can access your assets in an emergency or in the event of your death, you may wish to set up some form of conditional access to your password manager to a trusted person and include instructions for asset retrieval in your succession planning documents. While not legally binding, this may prevent your digital assets from being lost.
7. Beware Of Crypto Scams
The crypto industry’s eye-popping growth has attracted a horde of scammers and defrauders who are constantly trying to discover new and creative ways to trick crypto users and steal their assets. While their techniques evolve every day, their principle is almost always the same: they promise considerable returns within a short amount of time.
Some traders prefer to avoid the custody of digital assets altogether by turning to various derivatives trading as a means of access to cryptocurrencies. There are several different ways you can achieve it, from futures to options, and even trading binary options contracts. However, all of these represent a sophisticated means of trading and should only be undertaken by experienced traders.
For those who prefer to buy, store, and trade cryptocurrencies directly, a general rule that can help avoid scams is to abstain from new and non-reputable crypto firms, particularly those that offer well-above-average returns. Furthermore, investors should always keep two golden rules in mind, to be safe: only invest what they can afford to lose, and, if it’s too good to be true, then it usually is.
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