The Ultimate Guide to Keeping Your Crypto Safe in 2023

The Importance of Good Cryptocurrency Security Practices for Keeping Your Coins Safe

In recent years, as cryptocurrency has become more popular, it has naturally attracted the attention of scammers, hackers, and fraudsters. Last year was the biggest year for cryptocurrency hacking – $3.8 billion was stolen from crypto users. This included crypto stolen from wallets, exchanges and DeFi protocols.

With this in mind, its imperative that investors learn how to keep their crypto safe from the myriad of threats and bad actors that exist in the eco-system.

It’s essential for investors to understand the fundamentals of cryptocurrency storage and security. For beginners, cryptocurrency investing may seem particularly overwhelming. However, if you’re new to crypto it’s important for you to gain a firm understanding of the different types of cryptocurrency wallets (cold vs hot wallets), what private keys and seed phrases are, how to protect them, how to ensure that you don’t lose your crypto to scammers, and how to securely transfer your assets from an exchange to your own self-custody. We will cover these topics and more in this article.

Inadequate security measures can lead to severe consequences, including the loss or theft of your cryptocurrency. There have been many, many examples of users losing their crypto to scammers and unfortunately, some of the techniques used by crypto thieves have become more sophisticated and harder to spot.

The first rule of keeping your crypto safe is to know your enemy, so let’s take a look at some examples of how scammers may try to steal your cryptocurrency or NFTs.

The Most Common Crypto Scams and How to Avoid Them

Cryptocurrency scams are unfortunately prevalent in the digital landscape. Understanding the most common scams and knowing how to avoid them is essential to protect yourself and your investments. Let’s explore some of the most common crypto scams and effective strategies to avoid falling victim to them.

Fake Websites

Scammers often create fake cryptocurrency trading platforms or counterfeit versions of legitimate crypto wallets. This is one of the most important crypto scams to be aware of. Thankfully, there are a number of steps you can take to keep yourself safe from this type of cryptocurrency scam.

• Always double-check the website’s URL and domain name for any slight variations or misspellings. Sometimes scammers will even push their fake website to the top of the search by using Google ads. Be vigilant and
• Use reputable sources, such as official websites or trusted app stores, to download wallets and trading platforms.
• Be cautious of unsolicited emails or links and never enter your private key or financial information on unfamiliar websites.

Phishing Scams

Phishing scams target your sensitive information, such as private keys and passwords, by tricking you into visiting fake websites or clicking on malicious links. To keep your crypto safe from phishing scams take the following into consideration.

• Be wary of unsolicited emails or messages asking for personal information or asking you to take urgent action. For example, some scammers may try to steal your cryptocurrency by sending you an email posing as a wallet or exchange and telling you that your wallet or account will be suspended if you don’t take some urgent action. Before clicking on any links in the email verify that it is legitimate. Examine the sender’s address, or reach out to your provider before clicking on any of the links (they may be malicious links).

• Enable two-factor authentication (2FA) on your cryptocurrency wallets and exchange accounts just in case you do inadvertently click on a malicious phishing link.

Fake Apps

Scammers create fake cryptocurrency apps that mimic legitimate ones, aiming to trick users into revealing sensitive information or transferring funds. To avoid becoming a victim of this type of crypto scam and

• Download apps only from official sources, such as Google Play or the Apple App Store.
• Read reviews and ratings before downloading any cryptocurrency app. One red flag that might alert you that a crypto app is fake is that it doesn’t have a significant number of downloads.
• Check the app developer’s official website or social media accounts to check that it is legitimate. If still in doubt, reach out to the developer before attempting to download the app.

Giveaway Scams

This type of cryptocurrency scam has unfortunately become quite prevalent in the past few years. You may come across this type of crypto scam on social media sites like Twitter and Telegram. Giveaway scams promise to multiply or match the cryptocurrency sent to the scammers, preying on people’s greed and desire to make a quick buck.

As a rule of thumb, if something seems too good to be true, it probably is!

In order to keep your cryptocurrency safe from fake giveaway scams:

• Be skeptical of unsolicited messages or social media posts offering giveaways.
• Legitimate giveaways are typically conducted through official channels and verified accounts.
• Never send cryptocurrency to unknown individuals or addresses in the hope of receiving more in return. This is almost always going to be a scam and will result in you losing your cryptocurrency.

Strong Passwords and Two Factor Authentication

Creating Strong Passwords to Protect Your Cryptocurrencies

Creating strong passwords is vital for protecting your cryptocurrency. In this section, we will discuss the importance of strong passwords and explore best practices to ensure robust security.

Importance of Strong Passwords: A strong password acts as a robust barrier against unauthorized access to your accounts. With the increasing sophistication of hacking techniques, it’s crucial to create passwords that are resistant to brute-force attacks. Strong passwords significantly reduce the risk of unauthorized access and help protect your cryptocurrency and personal information.

Best Practices for Creating Strong Passwords

There are a number of steps you can take to ensure that your password is strong enough to protect your crypto wallets and accounts.

• Length: Opt for passwords that are at least 12 characters long. Longer passwords are more secure against brute-force attacks.
• Complexity: Include a mix of uppercase and lowercase letters, numbers, and special characters in your password.
• No personal information: Avoid using information that might be easy to guess. For example, don’t use your name, birth date, or commonly known information about yourself.
• Use unique passwords: Use a unique password for each cryptocurrency account or wallet you use. This will help minimize your loss in the event there is a breach.
• Regularly update passwords: Change your passwords periodically. Security experts recommend updating passwords every 3 to 6 months.

Using Password Managers to Protect Your Crypto Accounts

Keeping track of numerous passwords is virtually impossible, as it’s inevitable that you’ll be signed up to numerous exchanges and have various different wallets. Password managers are an essential tool to keep track of all your different passwords.

What are password managers?

Password managers are encrypted digital vaults that securely store your passwords. They provide a convenient and secure solution for managing multiple passwords across various cryptocurrency accounts.

Here are some key things to consider when using password managers:

Choosing a Password Manager

• Do your research: Look for well-established password manager solutions with strong encryption protocols and good user reviews.
• Consider features and compatibility: Evaluate password managers based on features like cross-platform compatibility, secure password generation, autofill capabilities, and synchronization across devices.
• Assess security measures: Ensure the password manager uses strong encryption algorithms, such as AES-256, to protect your data. Look for additional security features like two-factor authentication for accessing the password vault.

Best Practices for Password Managers

• Master password strength: Create a strong and unique master password for your password manager. Remember that this is the key to accessing all your stored passwords, so make it complex and memorable only to you.
• Enable two-factor authentication: Whenever possible, enable two-factor authentication for your password manager. This will provide you with an extra layer of security.
• Avoid storing private keys or seed phrases on password managers: While password managers are secure, it’s advisable not to store highly sensitive information like recovery phrases or private keys within them. Instead, store these separately in secure offline storage options like hardware wallets or steel wallets.

By implementing a password manager and following best practices, you can efficiently manage your cryptocurrency account passwords while maintaining a high level of security. Remember to regularly review and update your passwords and keep backups of critical information to ensure a seamless and secure experience.

Get 30% off Keeper Password Manager:

Two Factor Authentication

Two-factor authentication (2FA) adds an extra layer of security to your cryptocurrency accounts by requiring a second (or third) verification step in addition to your password. In this section, we will explore how to implement 2FA for wallets and exchanges effectively.

2FA combines something you know (your password) with something you have (a verification code or physical device) to confirm your identity. It provides an additional level of security to keep your cryptocurrency safe, even if your password is compromised.

If you enable 2FA on your cryptocurrency account, this means that you’ll have to put in a code each time you want to log in to your account or transfer cryptocurrency (for example from an exchange to your personal wallet). While this may seem like an inconvenience at times, it could be the difference between losing your crypto if any of your accounts are hacked. In this sense, 2FA is an essential step you need to take if you’re serious about keeping your cryptocurrency secure.

Types of 2FA

• Time-based One-Time Password (TOTP): TOTP is a widely used 2FA method that generates a temporary verification code on your smartphone or a hardware token. Popular authenticator apps like Google Authenticator or Authy support TOTP.
• SMS-based Verification: Some platforms offer 2FA via SMS, where you receive a unique code on your registered mobile number.
• Hardware Tokens: Hardware tokens are physical devices that generate verification codes, offering an offline and highly secure 2FA option.

Secure Cryptocurrency Exchanges and Trading

Choosing Reputable Cryptocurrency Exchanges

Before signing up and using an exchange, it’s essential that you conduct thorough research. Some exchanges have practices in place that ensure that your cryptocurrency will be more secure while trading. Here are some of the things you should consider before using an exchange:

• Does the exchange use cold storage to protect customers’ crypto?: While all exchanges can be victims of hackers, try to use reputable and well-known exchanges. Look specifically for exchanges that use cold storage to protect their customers’ funds. Your cryptocurrency is likely to be more secure on exchanges that use cold storage and less vulnerable to hackers.

• HTTPS Certificate: Also, only use exchanges with an up-to-date and valid HTTPS certificate. Look for the exchange’s HTTPS certificate near the top left of your screen. You should see a locked padlock symbol just before the site’s URL. This protects you against bad actors who may try to capture the data you’re sending to the web server.

• Read reviews of the exchange: This will give you a good idea of customers’ experience with the exchange. As well as this, conduct your own research to see if the exchange has been hacked in the past, how much was lost, and whether the exchange made customers whole.

• Regulatory Compliance and Asset Insurance: Check whether the exchange is licensed, or whether it has some sort of asset protection insurance in place. Sometimes exchanges will have insurance in the event of a hack, which will help protect any crypto you are keeping with the exchange in the event of a hack.

Minimize your risks: Only keep minimal cryptocurrency on an exchange

We don’t recommend storing all your crypto on an exchange – only keep the amount of cryptocurrency you intend to trade. While exchanges are probably the easiest and fastest way to buy and sell crypto, they’re susceptible to being hacked.

There have been a few high-profile incidents over the years – from the infamous Mt. Gox to more recent hacks like Liquid Global. This is something that’s not going to change anytime soon. According to Russian cybersecurity specialists Group-IB:

Cryptocurrency exchanges will be a new target for the most aggressive hacker groups usually attacking banks. The number of targeted attacks on crypto exchanges will rise.

As we mentioned above if using or keeping any funds on an exchange it’s essential to use a strong password and enable 2FA to keep your crypto secure.

As well as this, you don’t really hold the crypto in the true sense of the word – because it’s the exchange who holds the keys, not you. Maintaining control of your own keys is the ultimate step to keeping your cryptocurrency safe. We’ll look at crypto self-custody and the different types of wallets available to secure your cryptocurrency in the next section.

Cryptocurrency Wallets: A Guide to Crypto Self Custody

There are various types of wallets you can use to secure your cryptocurrency and NFTs. In this section, we’ll take a brief look at the main types of crypto wallets used today and how they work.

Hot Wallets and Cold Wallets

Hot Wallets

Hot wallets are software-based crypto wallets that are connected to the internet. These are convenient as they give users quick access to their crypto. However, as with anything there are trade-offs, and while being convenient hot wallets are also at risk of being hacked because they are connected to the internet.

Recently, a number of hot wallets have been compromised, which led to users losing some or all of their cryptocurrency. We would only recommend keeping smaller amounts of cryptocurrency on hot wallets.

Cold Wallets

Cold Wallets, also known as hardware wallets, keep your crypto keys on a physical device and, most importantly off the internet. We recommend using cold wallets for storing more significant amounts of cryptocurrency as they are by far the best method for keeping your crypto secure and safe from attacks. In the next section, we will look at cold wallets in more detail.

Cold Wallets: The best way to secure your cryptocurrency investment

If you’re serious about protecting your wealth, the safest way to store your cryptocurrency is on a hardware wallet (or what’s often referred to as a “cold” wallet). Cold storage is the best method to keep your cryptocurrency safe and secure because it keeps your private keys on a device that isn’t connected to the internet. This makes it more difficult for hackers to steal your crypto.

How do cold wallets work and how do they keep your cryptocurrency safe?

Cold wallets do not store the crypto itself; instead, your private keys are stored locally on the device, usually protected by PINs or passwords, and cannot be extracted without physical access to it.

The cryptocurrency you own actually lives on the blockchain. Your keys, which are stored in your wallet, give you access to transact with those coins.

When you hold crypto, you own both public and private keys. A public key is sometimes compared to an email address. You would give this address to somebody if they wanted to send you some crypto. Your private key is like your password. Only you should have access to this.

So, in summary, you own the keys to your cryptocurrency. For this reason, it’s vital that you keep your private keys safe and ensure that no one else has access to them.

Air-gapped Cold Wallets

Air-gapped wallets are cryptocurrency wallets that go one step further. As well as being disconnected from the internet, air-gapped wallets generally do not use Bluetooth, WiFi, or NFC (near-field communication).

What are the best hardware wallets for keeping your cryptocurrency secure?

Keystone Hardware Wallet

Keystone is certainly one the of best hardware wallets on the market at the moment. The Keystone Hardware Wallet team has delivered a well-thought-out suite of products, that takes various crypto investors into consideration.

Keystone Wallet Pro, their premium product, is an air-gapped cold wallet. Being air-gapped means that Keystone Pro users are protected from Bluetooth and USB attack vectors.

As well as being air-gapped the Keystone Hardware Wallet comes with a number of other important security features.

QR Code Verification

Keystone Wallet uses secured QR codes for transaction signing, ensuring that your funds remain fully offline and protected from potential threats.

Offline Firmware Updates

Firmware upgrades are performed via a MicroSD card, minimizing attack vectors and enhancing the overall security of the device. Additionally, crucial data required for transaction decoding and ENS support is securely stored within the MicroSD card.

Shamir Backup

To safeguard your recovery phrase, Keystone supports SLIP39, enabling you to create a Shamir Backup. This feature mitigates the risks of theft and destruction associated with protecting your seed phrase. It does this by allowing you to split your recovery seed, which then must be combined to access the device hardware wallet. Part of the phrase on its own would not be sufficient to gain access to the wallet.

Multi-Sig

The Keystone Wallet offers multi-signature support for both teams and individuals. For Bitcoin users, the wallet’s Bitcoin-only firmware is compatible with various top Bitcoin wallets that offer multi-sig functionalities.

The Keystone team has co-authored BIP-129, a widely adopted standard for setting up secure Bitcoin multi-sig wallets across different protocols.

For Ethereum users, Keystone is compatible with Safe (Gnosis) and supports multi-sig transactions for ETH and various EVM chains such as BSC, AVAX, and Optimism. Keystone is proud to be a member of the Safe Guardian team.

Keystone Pro Self Destruct Mechanism

To protect against physical tampering, the Keystone wallet features an in-built self-destruction mechanism. If any attempts at physical disassembly are detected, the device triggers the self-destruction mechanism, wiping all sensitive information, including the recovery phrase and private keys, to ensure the utmost security.

Compatibility with Web3

Keystone’s compatibility with popular web3 wallets like MetaMask, including support for MetaMask Mobile, allows users access to various dApps launched on Ethereum and other EVM chains like Polygon, BSC, and OKC.

Keystone has also integrated with various chain native wallets such as Solflare, Keplr, Fewcha, ArConnect, Sender, and SubWallet, enabling support for non-EVM chains like Solana, Cosmos, NEAR, Aptos, Polkadot, and Arweave. This broadens the wallet’s compatibility and usability across different blockchain networks.

We would hope to see Keystone expand to become compatible with more alternative blockchains in the future. This would enable them to compete with the likes of Ledger, who have done well in this respect.

Keystone Wallet: Pros and Cons

SafePal S1 Hardware Wallet

SafePal is another great air-gapped hardware wallet option for investors looking for a cost-effective way to secure their crypto offline. In this section, we’ll review some of the main features of the SafePal S1 Cold Wallet and outline what makes it a great choice for security-conscious crypto investors.

Compact Size

One of the standout features of SafePal’s Hardware Wallet is its compact size, equivalent to that of a credit card. This makes it highly portable and convenient to carry anywhere you go.

Security Features

Being an air-gapped wallet, SafePal avoids connection to Bluetooth, WiFi, or NFC. The wallet also has a built-in camera and uses a QR code for transaction verification.

Extensive Range of Blockchains

Despite its compact size, SafePal boasts a comprehensive range of functionalities. You can manage an unlimited number of tokens from various blockchains. SafePal currently supports over 58 blockchains and their respective tokens, with the intention to add further functionality in the future.

SafePal App

The SafePal hardware wallet can be paired with the SafePal App. This integration enhances crypto and NFT management capabilities, enabling secure storage, easy transfers, and seamless trading of your crypto. The wallet’s DApp gateway allows users to connect to a growing ecosystem of decentralized applications.

Furthermore, the SafePal wallet offers a one-click solution for yield farming and earning rewards. It enables users to earn a yield on their crypto, by connecting to applications such as Binance earn (who are an investor in SafePal).

SafePal Hardware Wallet: Pros and Cons

NGRAVE ZERO Hardware Wallet

Offline Key Generation

NGRAVE ensures maximum security by generating and protecting your keys offline. It is air-gapped and doesn’t rely on USB, WiFi, Bluetooth, NFC, or 4G connections. All communication is facilitated through transparent QR codes.

Biometric Security

Adding an extra layer of protection, the NGRAVE Zero hardware wallet incorporates a biometric sensor for fingerprint scanning. An access key is created by combining your fingerprint with a solid 8-digit PIN code, ensuring secure access to your device.

Custom NGRAVE OS

NGRAVE has developed its own operating system (OS) from scratch, eliminating any vulnerabilities associated with relying on existing mobile phone operating systems.

4-inch Touchscreen

As well as being a great device for keeping your crypto safe, the NGRAVE Zero is also a very attractive device. It has a 4″ touch screen which offers a user-friendly experience. You can conveniently store up to 100 accounts and navigate through them effortlessly with just a swipe and tap.

Supported Cryptocurrencies

NGRAVE Zero currently supports a wide variety of blockchains, including Bitcoin, Bitcoin Cash, Ethereum, Litecoin, BNB, XRP, Dogecoin, Tezos (XTZ), MultiverseX, Solana, Stellar (XLM), Polygon (MATIC), and Avalanche.

BitBox Hardware Wallet

The BitBox hardware wallet is a Swiss-made secure and privacy-focused device designed to protect your cryptocurrencies. It combines advanced security features, a user-friendly interface, and open-source transparency to provide a reliable solution for storing and managing your digital assets.

BitBox Security Features

The BitBox cold storage wallet incorporates a number of advanced security features. These include:

• Dual Chip Security Architecture: BitBox uses a dual chip setup, combining a microcontroller chip and a secure chip (ATECC608B), providing robust protection against various attack vectors.
• Wallet Seed Storage: The encrypted wallet seed is stored with three secrets, making it highly resistant to unauthorized access or theft.
• Open-Source: BitBox embraces transparency by open-sourcing its firmware, BitBoxApp, and even hardware X-rays, allowing the community to verify its security measures.
• Secure Bootloader: Only firmware signed by Shift Crypto, the company behind BitBox, can be installed, preventing downgrades or installation of firmware meant for different BitBox editions.
• Physical Protection: BitBox employs measures such as epoxy potting and breaking pins to deter physical tampering and ensure the integrity of the device.

Functionality

• User-Friendly Interface: BitBox features a secure display and touch confirmation, allowing you to verify transactions and addresses directly on the device.
• Wallet Backup: The device supports instant backup to a microSD card, ensuring the accuracy of your wallet seed. Additionally, you can verify backups at any time and display recovery words if needed.
• Advanced Features: BitBox offers secure multi-sig functionality, firmware hash verification, and the ability to create custom wallets using external sources of randomness.

Supported Blockchains

BitBox currently supports over 5000 tokens. Many of the most prominent and popular blockchains are supported (as well as their associated tokens), including Bitcoin, Ethereum, Cardano, Litecoin, Polygon, and BNB.

BitBox App

The BitBoxApp is a companion application designed to work with the BitBox hardware wallet. It provides a user-friendly interface for buying, securing, and using cryptocurrencies.

The BitBox app is available for both desktop and Android.

Your Recovery Seed Phrase and How to Keep it Safe

When you’re setting up your cryptocurrency wallet (either hot or cold) for the first time, you’ll be provided with what’s called a recovery or “seed” phrase. This typically consists of a string of 12 or 24 words.

Your recovery phrase is the only backup you have if your wallet is lost, gets corrupted, broken, or stolen. It’s vital that keep it in a safe place. Never store your recovery phrase on your phone or computer and never keep it in the same place as your hardware wallet!

It’s reassuring to note that if the crypto wallet you choose ceases to exist, you can still recover your cryptocurrencies on any other compatible wallet with your recovery phrase. This is because recovery phrases are part of a standard known as BIP-32.

Most people choose to write their recovery phrases on paper, however, the best way to secure your crypto seed phrase is with a steel or metal wallet. We will look at some of the best steel wallets in the next section.

Steel Wallets to Keep Your Crypto Secure

Steel wallets let you keep your private keys, all different kinds of passwords (not just crypto ones), and wallet recovery seeds offline and engraved in stainless steel (or other metals, such as titanium). These wallets are impervious to hacking, fire, flood, and even electromagnetic pulses (EMPs) and keep your private information safe without any third-party involvement. The characters of your seed phrase are stamped into the tiles to provide maximum longevity.  

Ellipal Mnemonic Metal

Ellipal’s metal crypto wallet is fireproof, waterproof, mold-proof and insect-proof. It allows users to securely store the first 4 letters of each word of their 24-word seed phrase (BIP mnemonic phrases are recognized when the first four letters are entered into a compatible hardware wallet).

The Ellipal Mnemonic Metal is compatible with every BIP39 wallet such as Ledger, Trezor, Ellipal hardware wallets.

The Ellipal Mnemonic Metal comes with a one-year warranty. It retails for $39, or can be bought as part of a bundle along with the Ellipal Titan Hardware Wallet, which is a secure “air-gapped” hardware wallet (meaning it’s never tethered to a device that’s connected to the internet).

Billfodl Multishard

While a reasonably well-hidden steel wallet should be almost impossible to find, Billfodl’s Multishard protects against someone finding the steel wallet and accessing the seed phrase to steal your crypto.

The Multishard protects against this by splitting your seed phrase into 3 separate parts so that a thief will need to find at least 2 of the 3 pieces to gain access to the seed phrase. This is an excellent way to keep your cryptocurrency safe.

• Part one holds words 1-16
• Part two holds words 9-24
• Part three holds words 1-8 and 17-24

The Billfodl Multishard uses a high-grade marine-grade 316 stainless steel and is resistant to temperatures up to 1200C/2100F. It’s also built to withstand over 1,000,000 volts of electricity, which means it would even survive a nuclear strike, or a microwave bomb!

Keystone Tablet 

If you think the above options are over-engineered for your needs and if you want something that just works well and is very inexpensive then check out Keystone Tablet (formerly the Cobo), which at $39 can’t be beaten on price!

The Keystone tablet is designed to withstand temperatures of up to 1455°C or 2651°F. It’s also composed of 304-grade stainless steel, which means that it will not corrode if submerged in water.

The Keystone Wallet comes with the following included:

• four sheets of metal letters,
• two security seal stickers,
• screws,
• a screwdriver,
• tamper evident stickers,
• and a guide on how to set up the Keystone Wallet (which is pretty straightforward – as you can see below).

Cryptosteel Capsule

Cryptosteel styles itself as “the mother of all backups” for your wallet seed phrase.

The characters of your seed phrase are stamped into the tiles to provide maximum longevity. You assemble your own password from the pieces provided and then lock it into your Cryptosteel. 

The Cryptosteel Capsule comes with over 800 stainless steel tiles with up to 123 characters of information. It’s waterproof, fireproof and shockproof. The capsule is essentially a steel tube, in which you stack your seed phrase. There are enough tiles provided to safely store your BIP-39 seed phrases (which only require you to know the first four letters of each word).

CryptoTAG

CryptoTAG is made from titanium making it incredibly hard-wearing, virtually indestructible but some assembly is required! Unlike, the other steel wallets in this review, the CryptoTAG requires you to hammer the letters into the plate yourself.

The CryptoTAG has been tested at temperatures up to 1667 degrees Celsius, put under a pneumatic hammer, and even shot with a 9mm round!

It comes with a heavy-duty hammer to literally pound your seed phrase into these plates. It’s the Lambo of steel wallet options!

See how to set up the CryptoTAG here:

CryptoTAG’s FAQs suggest that as titanium is a much denser metal than steel, it is more likely to be found with detection equipment whereas stainless steel should blend in with other steel items.

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