The security of wallets varies from wallet to wallet. The level of security depends on many factors:
- Type of wallet used:
- Hardware, and;
- The service provider.
A web server is inherently riskier to keep your currency compared to an offline solution. Online wallets expose users to the possibility of being exploited by hackers. It is virtually impossible to hack offline wallets because they aren’t connected to an online network and are not relying on a third party for security. With any wallet, diligent security precautions should be implemented and followed. No matter which wallet solution you use, mishandling private keys will result in lost revenue. Once your coins have been stolen, there is no way to reclaim them or reverse the transaction. You must be judicious and very careful.
- Backup – It is important to keep only small amounts of cryptocurrency for daily use online or on your computer or mobile wallet. It would be best if you keep large amounts in a highly secure, offline environment. Offline storage, sometimes called “cold” storage, like Ledger Nano, paper ledgers, or a USB wallet, will help to protect you against hacking and computer failures and allow you to recover your wallet’s contents should it be lost or stolen.
- Update – Regular software updates will ensure that you have the latest security enhancements available. Regularly update your wallet software, the software on your computer, and that of your mobile wallet.
- Add – Multiple layers of security will provide peace of mind. Using long, complex passwords and ensuring any transactions require a password is very prudent. Additionally, use reputable wallets that offer extra security layers, such as two-factor authentication and additional pin code requirements for each time a wallet is accessed.