Common Digital Wallet Security Mistakes and How to Avoid Them
One of the most common mistakes new crypto traders and investors make is misunderstanding the security of their digital wallet. Some people think that simply downloading a wallet app or having a password is enough to protect their funds, but this is a misconception. Here are a few key points that every trader should know to ensure that their digital assets are protected...
1. Neglecting to save the seed phrase
The recovery phrase is the primary key to recovering your wallet in case you lose access to it. Many users neglect to write this phrase down in a safe place away from the internet, which puts them at risk of losing their assets permanently. The ideal solution is to write it down on a piece of paper and keep it in a completely safe place away from digital devices.
2. Using weak or duplicate passwords
A common mistake is using simple or duplicate passwords across different accounts, which increases the likelihood of your wallet being hacked. It is best to use a strong, unique password for each wallet, and you can use a secure password manager to manage your passwords easily and securely.
3. Using public and unsecured Wi-Fi networks
Accessing the wallet via public and unsecured Wi-Fi networks exposes your data to the risk of attack and hacking. The solution is to use a private and secure Internet network when accessing the wallet, and it is preferable to use a VPN service to increase the security layer.
4. Falling into a Phishing Trap
Phishing is a method used by scammers to steal users’ information. You should avoid clicking on untrusted links and always verify the validity of the website address before entering any information.
5. Not updating software or firmware
Failure to update software or hardware can leave the user vulnerable to known security vulnerabilities. It is essential to update your wallet and its software regularly to have the latest security features.
6. Use one wallet for all assets
It is best to spread your assets across several portfolios, with each portfolio dedicated to a specific purpose (e.g. one for trading and another for long-term storage). This reduces risk and makes it easier to manage your assets safely.
7. Rely on online wallets (Hot Wallet) instead of offline wallets (Cold Wallet)
Online wallets are easier to use but more vulnerable to hacking, while offline wallets (such as physical wallets) are more secure because they remain offline.
8. Storing currencies on trading platforms only
Some users keep their assets in trading platform wallets for easy access, but these platforms are vulnerable to hacking. Therefore, it is advisable to transfer assets to a private wallet if they do not need to be traded frequently.
9. Enable two-factor authentication (2FA)
Enabling two-factor authentication adds an extra layer of security, requiring an additional code to access your wallet. It’s best to use trusted apps like Google Authenticator rather than relying on text messages, which can be vulnerable to hacking.
10. Handle wallet addresses with caution
Always make sure to verify your wallet address before sending cryptocurrencies, as sending coins to the wrong address is often irreversible.
