Whether buying, storing or investing, it is imperative that you always keep your cryptocurrencies safe and secure. In most cases, lost coins and tokens can never be recovered.

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If you trade cryptocurrencies on a centralized exchange, choose a trading platform that complies with regulations for KYC and AML checks. Audited peer-to-peer and decentralized trading platforms are the safest.

In this article, we will look at various ways to store your cryptocurrency securely. Storing your cryptocurrency on a regulated exchange is ideal for beginners and traders. However, the keys to your wallet are not owned by the user.

Non-custodial wallets have higher security because the private keys are kept by the user. It is safer to store the currency in an offline wallet such as a cold storage device. Both methods require the private keys to be properly stored in a safe place offline.

Use audited DApps to improve security, and regularly check which DApps have access to wallets. After using a DApp, the permissions should be revoked immediately.

Introduction

At the heart of cryptocurrency is the concept of self-sovereignty, where users can act as their own personal bank. If you can keep your funds safe, they are better than even the most heavily guarded bank vault. But if you can’t, the assets in your digital wallet are at risk of being stolen remotely.

Learning how to properly protect your cryptocurrency is a critical step in your cryptocurrency journey. Storage is only one aspect of security. Today, many cryptocurrency holders interact with DApps in the decentralized finance (DeFi) space and should also learn how to spend their currency safely.

Just like you shouldn’t trust your money to a company of questionable reputation, you shouldn’t use DApps to trade tokens. The same goes for exchanges where you buy and trade cryptocurrencies. In this guide, we’ll discuss the best tips for keeping your crypto assets safe, no matter where you store them.

Buy Cryptocurrency Safely

Nowadays, there are many platforms for buying cryptocurrencies. These include centralized exchanges, decentralized exchanges (DEX), cryptocurrency ATMs, and peer-to-peer trading. Each platform has different security factors and has its own advantages and disadvantages. For most users, a reputable centralized exchange platform is the perfect combination of convenience and security.

Choose a safe trading platform

Centralized exchanges such as Binance provide security through increased regulation, anti-money laundering (AML) measures, and identity verification (KYC) checks. Early cryptocurrency trading platforms had problems. Through the unremitting efforts of the government and trading platform operators, the trading environment has been significantly improved.

If you want to use an exchange, you will need to transfer your funds to their custodial wallet. You delegate the responsibility of keeping your tokens safe to the exchange, which will provide security based on your risk profile. If you are new to wallets or don’t know much about cryptocurrencies, it may be safer to use an exchange wallet. This will prevent you from accidentally locking yourself out of your wallet and losing your cryptocurrencies.

However, some users prefer the security of having direct control over their funds. You may have heard that “if you don’t have your keys, you don’t have your coins.” Without physical possession of the wallet, anyone else can control your cryptocurrency. You can read the section on storage later to learn more.

If you decide to use a peer-to-peer service or a decentralized exchange, here are some things you can do to improve your security. Check for audits on your DEX from reputable sources. We’ll cover audits in detail later. Binance also offers a DEX based on the company’s security and reputation.

If a peer-to-peer service is used, both the buyer and seller must be authenticated. Ideally, an escrow service should also be provided. While it does not completely eliminate the risk, having a third party hold the funds in an escrow service can help protect both buyers and sellers from being scammed.

How to protect your account security

If you sign up for a trading platform or choose a trading method, following standard good practices will help keep your account safe. These recommendations are no different than how you would protect your online bank account or other sensitive information. It's easy to prevent someone from stealing your account and your funds by:

1. Use strong passwords and change them regularly. Passwords must not contain personal information such as birthdays. Passwords must be long enough and unique to the account, and must contain symbols, numbers, and uppercase and lowercase letters.

2. Enable two-factor authentication (2FA). 2FA uses a mobile device, authenticator app, or YubiKey to initiate a second layer of protection if your password is accidentally leaked. When logging in, you need to use your password and 2FA method.

3. Beware of phishing attacks and scams in emails, social media, and private messages. Scammers often impersonate exchanges and trusted people in an attempt to steal funds. Also, do not download software from unknown sources, which may contain malware.

For more information on keeping your account secure, read our 7 Simple Steps to Secure Your Binance Account guide.

How to Store Cryptocurrency Safely

Once you have purchased or traded some cryptocurrencies and secured your account, the next important task is to store your cryptocurrencies in a safe place. If you are not depositing them on an exchange for future trading, then your only option is to store them in a wallet. Wallets vary in terms of ownership of the private keys and how they are connected to the internet. Which wallet you choose will depend on the level of security you want to achieve.

Hardware wallets, such as the Trezor One or Ledger Nano S, are designed to use similar principles of offline custody of private keys, while focusing on optimizing the user experience. These wallets are designed to store digital currencies and are more portable and cheaper than full computers.

This physical device is able to store private keys securely and does not require an internet connection. A good hardware wallet ensures that the private keys never leave the device. They are usually stored in a special place in the device and cannot be removed.