Beginners in the crypto sphere have to deal with a lot of decisions from the very start, one of them being the question of how to secure your crypto portfolio while it grows in value.
You need a robust and secure system if you plan to stick to the cryptocurrency sector and be successful.
Luckily, it’s never been easier to stay secure when investing in crypto coins. But there are some starting cryptocurrency mistakes that you’ll wish to avoid in securing your assets.
Here’s the rundown of those cryptocurrency mistakes:
1. Do not Utilize a Brain Wallet
When you create your crypto wallet, you are often offered a 12-, 16- or 24-word recovery phrase.
This phrase or mnemonic plays a role in recovering your wallet and any funds it has in it in case you lose the wallet or the device where it was stored.
Sure, even though it’s probably a mnemonic, don’t rely just on your brain to remember the phrase unless you got a physical backup, too. Because if you can’t remember the mnemonic, you got no chance of getting to your funds.
In the same way, you could be tempted to come up with your own phrase with the help of well-known quotes or just a sequence of words that you are more likely to remember. Don’t do this. The wallets are really easy to hack and are not safe enough to store heftier sums of any crypto.
Rather, utilize a randomly created recovery phrase and safeguard your backup in an offline environment.
2. Don’t Go for Custodial Wallet Choices
Self-custody of your funds is one of the main tenets of cryptos. After all, they are a non-centralized alternative to central bank-secured fiat currencies like the US dollar and the euro.
In spite of this, a big proportion of the most well-known crypto wallets can be called ‘custodial’. This means that the company that made the wallet safeguards your private keys for you, meaning that you can’t just utilize your own funds without their authorization, and your funds will be unapproachable if the service is not available for some reason.
What’s even more significant is that custodial platforms have a horrible reputation for getting hacked often. Nearly $800 million was stolen from exchanges in 2018!
If you cannot directly access your recovery phrase or private keys, the chances are that you are utilizing a custodial wallet platform. Although they may have some advantages when it comes to usability and ease of use, you are putting the trust for your funds’ security to someone else. This rarely works out perfectly.
3. Do not Pay for Your Wallet
A big number of crypto wallets are available at no cost!
Although there are also a big amount of crypto wallets that are not free, while lots of them provide extra characteristics that could justify this expense. Others provide just the basic characteristics that you can get for no charge whatsoever from a number of free wallets out there.
As someone just starting out, the chances are that you won’t need any professional wallet tools that could lead to some extra expenses. Rather, try out one of the many free wallets offered; you’ll usually be in the position to find one that provides the characteristics you require.
Generally, some of the fundamental characteristics you need to be searching for in a zero-cost crypto wallet are multiple crypto support, a vast scope of safety characteristics; built-in exchange functionality; and simplicity of use.
Some of the most well-known no-cost multi-asset wallets are Coin Wallet, Exodus, and Jaxx Liberty.
Do This Rather
While just starting out, you will understandably want to go for something costly to ensure that your money is secure.
This can even mean cashing out more than $100 for a crypto hardware wallet or keeping the assets on some of the wallet platforms that incur subscription expenses. And you may go for those just because they are frequently rendered as user-friendly.
You don’t have to do this. You have heaps of options because the crypto space has bloomed so much in the past decade. And free options with characteristics that were seen as premiums not that long ago.
Coin Wallet is probably the best instance of this. Even with being totally free and offered on virtually every big operating system, it has characteristics you’d expect from a premium wallet option; like a built-in crypto exchange tool, smart miner expenses, no address reuse, and robust safety options. It’s one of the lone wallets that supports FIDO U2F gadgets like the YubiKey, offering users optional hardware-grade safety.
Never go straight to purchasing some service or gadget without previously carefully examining the alternatives.