Securing your wallet… now that’s a good idea! After having explained to you which were the best Cardano wallets, it was logical that we explain you how to secure your wallet! And yes, it would be silly to have accumulated a lot of crypto and NFT and suddenly you have nothing left… To avoid this (very) embarrassing situation, it is therefore advisable to properly secure your wallet. In this article, we explain how to do it.
Some basic principles: how a Wallet works
First of all, a few reminders are in order. If you are not familiar with the functioning of digital asset wallets, we advise you to read the following lines carefully, in order to understand the rest.
A crypto wallet works a bit like a bank account. In a classic bank account, you have a part that you can share (your IBAN, to receive money) and a part that you must keep confidential (your access codes). Except that in the world of blockchain (editor’s note: and cryptography), we talk about private and public keys.
To better understand this story of keys, imagine your mailbox (you must have one, even if you are a minor!). The public key is what allows you to put mail in your mailbox (in this case, crypto). The private key is the key that allows you to access this mail.
So far, nothing too complicated. Except that… you have to distinguish between “hot wallet” and “cold wallet”.
Digital wallets like Metamask are hot wallets because they are connected to the Internet. They are therefore sensitive to attacks.
On the contrary, cold wallets are not connected to the Internet, they are physical wallets (that you can actually hold in your hand). Only you have access to them, and this is what makes your account secure.
Another little technical word: the seed phrase. This is your recovery key (editor’s note: not your private key). It often consists of a series of 12 or 24 words, taken randomly. You need to keep this seed phrase to have access to your wallet if you lose your computer for example. This is your back up. Obviously, you must not communicate it to anyone, not even to your cat (editor’s note: or your dog, no discrimination at Coinpri).
To make transactions from one wallet to another, to buy cryptocurrencies or NFTs, or to mint free NFTs, you must use your hot wallet. Similarly, to receive crypto funds, you need to use a hot wallet and your key (which one? public, of course!)
Securing your Wallet: why is it important?
Let’s get to the heart of the matter: “Why?” Why is it important to secure your wallet? As you have understood, the point of failure is the hot wallet. It is also important to remember that the world of crypto and NFTs is still the Wild West. And Cowboy, if anything happens to you, you can’t turn against anyone. No turning back, game over.
The crypto world is still unfortunately (or fortunately, depending on your point of view) a lawless world, with no intermediaries to turn to.
Even the most experienced can be fooled and have the contents of their wallet stolen. Some people have had millions of dollars stolen in… two clicks. Imagine their reaction upon discovering their wallet balance. 😥
There are two major dangers to your cryptocurrencies. The first danger is scams. A Scam, a trick, a forgery, a trickery, a deception, a swindle… In short, a good big carrot 🐰.
And, this carrot, the scammers shake it well so that a charming rabbit (or a pigeon, as the case may be) points the tip of its nose to eat it! And scammers, especially during Bull Run, are always lurking around, looking for their prey! In order to satisfy their hunger (editor’s note: end), they compete with ingenuity to gain access to your wallet, and thus to the goose that lays the golden eggs. Real little foxes… (#Metamask the loop is closed).
And the worst thing is that they are not idle in bear market, on the contrary!
Here is a small selection:
- Free money: scammers may offer you, in all sympathy of course, to send you free money in exchange for simply your private key (seed phrase) to confirm that it is indeed (um, um) your wallet. Of course, don’t fall into the trap.
- The fraudulent link:aAnother slightly more subtle trap is scammers who pretend to be “official”. This is particularly the case on Twitter with fake accounts. They send you a fraudulent link that automatically authorizes the transfer of all your digital assets to the scammer’s address. Once you click on the link, it is often already too late. And you’re left with nothing but tears in your eyes.
The problem of centralized exchanges
The second danger for your cryptocurrencies is the fact of storing your crypto on a centralized exchange. Yes, Binance, FTX, Kucoin, same battle, although they are not the worst in terms of security.
The security flaws come from the flock of other small exchanges that had the good idea to launch their own exchange, because well… it’s still quite profitable (editor’s note: it’s better to be the shovel seller than the gold digger). Except that their security system is not as advanced as the big exchanges, and they can be hacked.
And the problem is that the funds you put on it, in reality… they don’t belong to you. They belong to the exchange. And yes! If we take our example of the letters, your funds would be the letters still in the hands of the letter carrier before they drop them in your mailbox. Except that… he doesn’t even drop the mail (why bother?). He just delivers the information to you.
In this case, what you see on your Binance account is your money that you have graciously left in the hands of CZ, the CEO of the company. If an exchange is hacked, it is your money that is at stake.
As you can see, it’s crucial to secure your wallet to avoid these problems.
At this point, you should ask yourself: “Ok, but how do I secure my wallet!?”
How to secure your Wallet?
The first thing to do is to keep your seed phrase (your private key) safe and not reveal it to anyone (okay, you can reveal it to your cat).
Would you ever think of giving your house key to a complete stranger, just because they told you to do so to verify that it is your house? I don’t think so. Well it’s exactly the same with your private key. You can still give your home address to receive your mail there (i.e. give your public address), but it shouldn’t go any further than that.
The second thing to do is to protect yourself against all forms of scams. For that, you have to learn about the techniques used (we will soon write an article on the subject) in order not to fall into the traps.
You must also be extremely vigilant when you connect your Metamask (or any other hot wallet), and check that it is the official site. Don’t hesitate to go back to the Twitter account or to Coinmarketcap to get the right link.
It is better to be too sure than not sure enough, because as you know, there is no room for error in this world.
The third thing to do is to follow Coinpri daily (do I need to explain why? 😎).
The fourth thing to do is to back yourself with a cold wallet. As you already know, because you read carefully, a cold wallet is not connected to the Internet. Only you have exclusive access to it, not even the company that sold it to you. Even if a hacker accesses your hot wallet, but doesn’t have access to your cold wallet, he won’t be able to do anything, because you have to give authorization with your cold wallet to make a transaction. This is an essential security measure.
“Okay, the cold wallet is like ultra important. Okay. But how do I get one?
Buy your cold wallet: where to go?
Ledger was founded in 2014 by Eric Larchevêque and Thomas France, after co-founding “La Maison du Bitcoin” in Paris a year earlier. Ledger quickly became popular to the point that the brand became a household word, much like the fridge, which was originally a brand.
The Ledger is a cold wallet, which allows you to store your private keys in the device itself. The device is not connected to the Internet, so it is guaranteed not to be exposed like a hot wallet.
You don’t need to depend on a third party entity for your crypto and NFTs, everything is in your hands (literally). You keep control of your digital assets.
Ledger has an app, Ledger Live, that is user friendly and easy to use. Once you purchase your Ledger, you’ll need to install the app to add crypto or NFT to your Ledger.
There are several versions of the Ledger: Ledger Nano X, Ledger Nano S and Ledger Nano S Plus. It’s up to you to make up your own mind about each model. Prices range from 79 euros to 149 euros (but when it comes to securing your wallet, it is better to invest this amount). It’s a worthwhile purchase, so if you’re into adventure, let’s go.
Trezor arrived the same year as Ledger on the market, in 2014.
SatoshiLabs is behind this wallet and it was originally the first hardware that was dedicated solely to Bitcoin storage. The beginnings date back to 2011 after a Bitcoin conference in Prague.
Pavol Stick Rusnak and Marek Slush, the two founders, thought it was a good idea to be able to store Bitcoin off the Internet without a paper wallet. In 2013, SatoshiLabs was born with a crowdfunding campaign.
As with Ledger, the wallets are completely offline, which helps protect against external threats. There are two models: the Trezor model T and the Trezor model One (we’ll let you make up your own mind about each model). Both are in the form of a USB key. The main difference is that Trezor does not have a mobile application. It is in fact a web extension called Trezor Bridge. This one is of course compatible with Chrome and Mozilla browsers.
As you can see, securing your wallet is a crucial step, not to say vital (let’s not be afraid to exaggerate the words!). Use a cold wallet, check that the links are official, read what you sign with your wallet: so many good reflexes to avoid bad surprises to keep your cryptos and NFT. See you in a future guide on Coinpri.
Coming from a teaching background, I’ve become passionate about the world of Blockchain. I’m eager to learn more and share the fruit of my research through my articles.