Ever heard of people losing thousands of dollars’ worth of cryptocurrencies? Surely, you wouldn’t want to find yourself as the next victim. In most cases, however, these losses are due to silly mistakes which you could easily avoid. If you know how to store your digital assets, you don’t have to worry about lost, scammed, or stolen coins.
The Biggest Mistake of Beginners
The easiest way to convert fiat money to digital coins is by using a cryptocurrency exchange platform. Most beginners, however, do not know that this is also the easiest way to lose their coins without them realizing it. Many cases have already been reported involving users of cryptocurrency exchanges seeing their coins disappear due to hacking incidents. Also, it’s possible that the platform you’re using can go down suddenly.
It doesn’t matter how big or popular the platform is. You should never keep your coins in an exchange if you want to keep them safe. History shows that even major exchange platforms can be hacked. If you’re using cryptocurrency trading robots such as Bitcoin Code, it’s also prudent to move your profits into an offline wallet. This doesn’t only keep your coins safe but also helps you resist the temptation of trading more coins than you can lose.
What to Do with Your Recovery Seed
Now that you know the importance of using an offline wallet, the next step is to find out what you should do with the recovery seed. During the initial configuration of your wallet, you’ll receive a recovery seed containing 12 to 24 words. This is used for recovery purposes in the event that you lose your wallet, or it gets stolen. Your first order of business is to get a piece of paper and write down your recovery seed. This may be old school, but it’s an excellent way of ensuring that nobody else can access the recovery seed.
In a similar vein, avoid keeping copies of your seed online or on your devices. What if your smartphone or computer gets hacked? You wouldn’t want the hackers to get your recovery seed and take all your coins, right? This is something you can easily avoid if you only take the simple step of removing any copies of your seed from your phone, computer, and cloud storage platforms.
It’s also recommended to invest in a hardware wallet, particularly if you already have a substantial investment in cryptocurrencies. A hardware wallet functions similarly as an online wallet, but as the name suggests, you can still use it even when offline. What’s great about this type of wallet is that you can gain access to your coins without worrying about exposing the unique keys to your smartphone or local computer.
If you choose, you have the option of creating a unique recovery phrase to add an extra layer of protection. Some people even memorize their recovery seed. This may sound like overdoing it, but it’s still a reasonable way of ensuring that nobody else can access their digital coins. Just remember to act right now and transfer your coins from the exchange and into an offline wallet.
Jim Bevin is a passionate writer, guest blogger, and a social media enthusiast. The primary focus is writing high-quality articles after in-depth research and make sure it is a readers delight. Information is key and he abides by the rule of writing articles that will appeal to a broader audience.