Based on its technical merits, cryptocurrency is inherently safer than traditional currency. Being decentralized, it is not subject to the poor decision making of central banks. By using the blockchain, the integrity and the security of cryptocurrency transactions far surpass those of traditional financial institutions which are still susceptible to unsophisticated cyber and human attacks.

That said, however, there are still best practices that holders of cryptocurrency should adhere to in order to stay safe.

— Securing Your Devices —

One of the weakest points in any cryptocurrency transaction resides with the device that you use to connect to your cryptocurrency wallet or exchange. You should make certain that your computer and smartphone are always kept up to date. Failure to do so can create security vulnerabilities within your system. These, in turn, can be exploited by hackers to gain access to your digital currency.

Updating your operating system in a timely manner and using anti-virus software mitigates this threat.

— Be Wary of Public WiFi —

Even if the device that you use to access your cryptocurrency is properly updated and secure, there is another point of vulnerability that often goes overlooked. This concerns public WiFi. While it can be very convenient to access your exchange account or wallet through a public WiFi connection, it is also one of the riskiest behaviors that you can engage in when it comes to managing your cryptocurrency.

Traffic that goes through a public WiFi connection can easily be intercepted by those with nefarious intent. The best practice would be to avoid using public WiFi connections for any sort of cryptocurrency transaction. This includes public WiFi found in coffee shops, airports, hotels — even your workplace.

If you must use a public WiFi connection, then you should at minimum use the services of a reputable VPN service. These services create a virtual and secure tunnel between your computing device and the opposite end of your connection. That means that would be hackers would not be able to gain access to your information and your digital funds.

The use of a VPN service should not be limited solely to when you use a public WiFi connection. It should be used whenever you are connecting from a network that you do not control. This includes connecting directly to a LAN connection that is not your own.

— Use Offline Wallets —

While the majority of cryptocurrency exchanges and wallets offer superb levels of protection, some people may feel safer having their cryptocurrency wallets held offline. While this may remove the risk from ultra-sophisticated hackers, it could expose you to other risk factors. These include everything from physical loss or theft of your wallet to compromised data occurring from damage to your device.

If you do decide to use an offline wallet make certain that you keep it on a device that is encrypted. That way, in the event of loss or theft, your wallet data should be secure. Likewise, you should frequently back up your offline wallet data in the event that recovery was to become necessary. An excellent choice for beginners is the Ledger Nano S.

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— Strong Passwords —

In securing your cryptocurrency it is important to have strong passwords securing your accounts. you should consider using passwords that are 25 or more characters in length. These should consist of a mixture of alphanumeric characters and special symbols. Relying solely on your memory to create and remember these passwords is not realistic. This is why you should use a password manager to help you create and store your passwords.

Using a password manager will also make changing your passwords a much easier task. Changing your passwords regularly offer another layer of added security.

The use of two-factor authentication — a system which requires you not only to enter your password but also a specific code that is generated each time that you want to access your account — is also highly advisable.

The most basic form of two-factor authentication involves receiving your one-time access codes via an SMS message on your cell phone. While this type of two-factor authentication is better than nothing, the fact that it relies on SMS text messages does make them slightly less secure than those using other methods.

Third-party solutions, such as Google Authenticator and FreeOTP, provide you with a stronger option. Of course, if you want the highest level of two-factor authentication security, you would have to bypass software-based solutions and use hardware-based two-factor authentication devices.

This involves purchasing and setting up an individual two-factor authentication unit. This type of unit generates the one-time access codes every few seconds. It is synced to your cryptocurrency accounts based on the exact time of the day. This removes the step requiring you to receive the one-time code since it’s being generated automatically on your device.

— Use Dedicated Devices —

One of the best methodologies to secure your cryptocurrency involves using dedicated devices to access your accounts and wallets. This involves using computers and cell phones dedicated exclusively to the management of your cryptocurrency accounts.

This means that those devices should not be used to access any other type of service. They most definitely should not be linked to any sort of social media account or email service. Their sole purpose is to access and manage your cryptocurrency. They should remain offline or powered off when not in use for that exclusive purpose.

This, of course, creates a dilemma. After all, one of the purposes of using cryptocurrency is to purchase goods and services. If that commercial process is made cumbersome by limiting yourself to only being able to use one or two specific devices, then what’s the use?

The solution to this would be to utilize a system that uses dedicated devices in conjunction with multiple accounts and wallets.

As an example, you would have the bulk of your cryptocurrency holdings held in exchanges and wallets which you would only access from your dedicated devices. You would also have one or two wallets which could be classified as your “everyday” or “general circulation” wallets. These you would not access from your dedicated devices — you would access them from your normal cell phone or computer.

You would transfer funds from your more secure cryptocurrency wallet(s) to your everyday wallet(s) based on your anticipated needs. This way you are mitigating your exposure to potential loss. Your primary wallets would only interact with your “everyday” wallets, which in turn would be the only ones used to transact business with others.

Think of it as keeping the bulk of your fortune in one or two highly secured safes buried in the basement of your home. You would only take out and carry in your wallet what you expect to spend on any given day. That way, if the worst happens you only lose what you had in your wallet and not everything that was in the safe.

— Be Alert, Don’t Become Paranoid —

Common sense is your strongest ally when it comes to securing your cryptocurrency. Much of the same measures that you already use with traditional online banking translate well when it comes to securing your cryptocurrency wallets and exchange accounts. However, you need to remember that the fact that cryptocurrencies are decentralized means that you need to be more aware of what takes place in their ecosystem.

This does not mean that you should be paranoically following every perceived threat, but you should monitor your accounts with greater regularity. Make it a habit to check your balances on a daily or, at least, weekly basis. Also, whatever security process you decide is best for you — stick to it. Don’t become the person that is gung-ho about securing their accounts one day and at the first moment of inconvenience decides to violate their own security measures and takes shortcuts. With cryptocurrency, the bulk of the burden of securing your asset rests with you.