How To Keep Your Crypto Hot Wallet Safe
A crypto hot wallet is one of the most convenient ways to quickly and easily access your crypto assets.
Installing a hot wallet app, software, or extension is straightforward and quick. And the creation of a hot wallet takes just a few steps.
Anyone can start interacting with the blockchain and web3 within minutes.
But, without having digital safety knowledge and following digital safety good practices, hackers and scammers can take advantage of you and steal your crypto assets.
Hot wallets are very convenient and easy to use.
But they are vulnerable to hacks and scams.
Digital safety knowledge and digital safety good practices are a must for any hot wallet owner.
Hackers and scammers are looking for the easiest targets—those who bring them the most significant profit with the minimum effort.
You are an easy target if your crypto digital safety knowledge is poor and you don’t follow digital safety good practices.
But hackers and scammers are not the only threat to a hot wallet. Think about accidents, fires, robberies, and earthquakes,…
If the device where your hot wallet is installed is lost, destroyed, or robbed, you lose your hot wallet as well. But if your seed phrase is safe and secure, you can recreate your wallet again.
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Hot Wallet Safety Quiz
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Crypto Hot Wallet Safety 101
In general, two significant situations will lead to the permanent loss of cryptocurrencies and crypto assets.
– Knowledge –
If someone gets access to your seed phrase, through phishing or hacking, it is nearly 100% certain your cryptocurrencies and crypto assets will be stolen.
So you need to learn about the techniques used by hackers and scammers and keep your knowledge up to date so as not to fall for their scams and hacks.
– Knowledge –
If the device where your hot wallet is installed is lots or permanently damaged, and you don’t have a seed phrase to recover the private key, you will lose access to your cryptocurrencies and crypto assets forever.
Hot Wallets Safety Good Practices
It is essential to know the good practices you can follow to protect your hardware wallet. But it is even more important to follow them.
Do not cut corners or think ‘…it will not happen to me, because if you are sloppy, sooner or later, it will happen to you.
Use a Strong and Unique Password to Lock your Hot Wallet
A strong password must contain a combination of 8 upper and lower case letters, numbers, and symbols:
– Make sure your password has at least one upper case letter, one lower case letter, one number, and one symbol.
– Be aware that hackers know there is a high probability that the first letter will be upper case. It is human psychology.
– Be aware that hackers know there is a high probability that the last letter will be a symbol, most probably ‘!’ or ‘?’.
It would be best if you avoided the following on your passwords:
– Do not use sequential numbers or letters.
– Do not include your birth, month, or year in your password.
– Do not use words that can be found in a dictionary.
– Do not include any personal or traceable information.
And because you are using your passwords to keep crypto funds safe, you should try your best to have a unique password for each crypto account. If your username and password become compromised, your other accounts will remain safe.
And, while having unique names and passwords may be a nuisance, there are ways to make it easier to remember them.
Strong and Unique Passwords
Use 2FA as an Additional Layer of Security
Your username and password are NOT sufficient to protect your assets.
– Usernames, like email addresses, are reused far too often. And the more often a username is used, the bigger the chance it has been leaked after a data breach.
– Passwords, the same as usernames, are reused very often. And even if the password is long and complex, it will not matter if it becomes public due to a data breach.
Hackers and scammers are willing to pay for a list of usernames and passwords that they can use to narrow their efforts to find their next victim.
If you want to know if your emails or passwords have been made public, look at haveibeenpwned.com.
Make sure you don’t check your email address first and then your password immediately after. After all, NO site is hacker-proof, and even sites with good intentions can be used by bad actors.
A unique, long, complex password plus a 2FA method should protect your crypto accounts from most hacks.
No hacker will spend hundreds of hours targeting a crypto account with two layers of security (username, password, 2FA) to find that it holds crypto with very little value.
Unless you make it easy for them…
If You are not Using Your Hot Wallet, Lock it
Keep your hot wallet safe by locking it when not in use.
It is like fastening your car seat belt; you do it even though the chances of having an accident are very low.
Because when it happens, if it happens, you will be glad that you acquired the good habit and applied it automatically every time that you were not using the wallet.
Use a VPN to Keep Your Crypto Data Safe
When you use an online crypto wallet, you want to ensure that third parties cannot see or steal your data.
And without a VPN, you should never use public Wi-Fi while logging into your crypto accounts and making any transactions.
Your home Wi-Fi may be safe, and maybe the Wi-Fi at your friends and family can also be secure enough; but most certainly, the Wi-Fi at hotels, pubs, cafes, and airports,… is not.
Virtual Private Network (VPN)
Beware of Scams and Scammers
Scammers are probably one of the biggest threats to crypto users.
The good news is that once you know about the different types of scams and how to avoid them, it is quite improbable that you will fall for one if you have learned and applied some good practices.
Keep Your Seed Phrase Safe from Hackers, Scammers, and Accidents
It does not matter how well-protected your hot wallet is if you fall for a scam and give your seed phrase away. Because the scammer will restore your wallet, access the crypto assets, and then transfer them.
Or, even if your seed phrase is safely stored but recorded on paper or a USB drive, it may be gone forever, along with your crypto wallet, in case of a major disaster like a house fire.
Learning about the risks and threats to protect your seed phrase would be best. And also, the good practices to keep it safe and apply those good practices.
Hot Wallets Safety Knowledge
The more you know, the better you can prepare yourself to protect your crypto hot wallet from hacks, scams, and disasters.
Be ahead by learning about this four key topics:
Wallet Private Keys
Cryptocurrency Wallet Public Key
Cryptocurrency Wallet Public Address
Crypto Hot Wallet Horror Stories
Many crypto users think that crypto hacks, scams, and accidents only happen to other people.
The following stories are cases reported by real people who unfortunately lost their assets because they lacked digital safety knowledge or didn’t follow digital safety good practices.
We cannot go back in time and prevent their financial loss, but we can learn from the same situations, so they do not happen to us.
Hot Wallet Browser Extension Scam
While hot wallets are convenient, they are also the target of many online scams.
Fake browser extensions are one of the scams that are being used to steal crypto assets.
Most blindly trust that the apps from popular stores are safe because they are verified before being made available.
But the reality is different, and that is why you need to know that the threat does exist so you can follow good practices to ensure you don’t fall for it.
Scammers and their scams are one of the biggest threats to crypto users.
So, you need to learn about the different scam types, be able to identify them, and apply good practices to make sure that you don’t fall for them.
Hot Wallet Lost Seed Phrase
If both the wallet and seed phrase is lost, there is very little chance that anyone will be able to recover it.
There are a handful of cases of a person with very advance cryptographic knowledge being able to recover a wallet containing considerable amounts of crypto.
And there are a lot of cases of people asking for online help to recover their wallets and being scammed by malicious people who pretend to be there to help.
Some good practices to keep the hot wallet and seed phrase safe will save you a lot of stress and pain.
Crypto Hot Wallets Frequently Asked Questions
The questions from other people are windows to knowledge that maybe we need, but we never consider we missed.
What Are Better, Hot Or Cold Wallets?
There is no straight answer to this question.
While cold wallets are generally safer than hot wallets, they are not convenient enough for those who make small and frequent transactions.
And while hot wallets are convenient for small and frequent transactions, they are more prone to hacks and accidents.
You must decide what type of wallet is better for you based on your crypto knowledge or the good practices you can follow, given your situation.
Are Hot Wallets Safe?
Hot wallets can be very safe if the owner has sufficient safety knowledge and follow good safety practices.
No wallet, and it doesn’t matter if it is cold or hot, is safe from negligence.
Can You Restore a Hot Wallet?
Yes, if you recorded the seed phrase and you still have the seed phrase available.
What Is the Difference Between a Hot Wallet And a Cold Wallet?
Cold wallets are installed on dedicated and specialized hardware devices and are kept offline until the owner needs to make a transaction.
Hot wallets are installed on standard hardware devices like cell phones or laptops and are kept online most of the time.
Cold wallets tend to be safer but less convenient to use, and hot wallets are very covenient to use but are vulnerable to more risks and threats.
I Need to Repair My Phone, Is My Hot Wallet at Risk?
Yes, it is at risk.
It is your decision, but you may consider to deinstall the wallet from your phone and reinstalling it after receiving it back.
But be very careful because you need the seed phrase to reinstall the wallet. If you didn’t record the seed phrase or recoded it incorrectly, you will lose your wallet forever if you deinstall it from your phone.
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