Technological advancements have changed the investment industry as a whole. Cryptocurrency is the latest means to operate as a medium of exchange. When you deal in cryptocurrencies, you are opting for the latest digital ledger where the coin ownership records get stored. When you have to pick the most trustworthy platform amongst all, you must visit Techwibe. Currently, there are five most popular cryptocurrencies that you will hear about in the market. These are, namely, Bitcoin, Bitcoin Cash, Ripple, Litecoin, and Ethereum. Whenever you use this platform, everything becomes digitized. In such a case, you need to keep the data safe from being hacked or lost.
Cryptocurrency works with specific security codes, without which you cannot access the ledger. These secret codes will be available in your cryptocurrency wallet. It is always beneficial for you to save the copies somewhere else. If you lose access to the cryptocurrency wallet or forget the secret code, it will provide you with a backup for the same. You will get numerous gadgets in the market that you can purchase and safely store these codes.
There are two primary types of wallets that you can use to track coin ownership and send and receive cryptocurrencies.
- Wallet(s) with seed: If you have a cryptocurrency wallet with seed, you will be required to back it up only once when you create the seed. However, on the safer side, you can always choose to secure the secret keys in another device that we will discuss below.
- Wallet(s) without seed: For people who have a cryptocurrency wallet without a seed, you need to back up the wallet every time you create a new private key. It will be beneficial for you to keep a backup for the keys every time to ensure you do not lose recently updated keys and funds.
Therefore, in the forthcoming paragraphs, we will take you through the nine essential backup security tips for cryptocurrencies:
- As mentioned earlier, a wallet without the seed phrase requires regular backup. Firstly, you can start with frequently backing up the, say Bitcoin wallet. For instance, when you make a new transaction, backup the wallet whenever you add a new private key. The crypto wallet with a seed phrase requires a one-time substitute for the first time. Therefore, you need to frequently backup the wallet without seed for safety purposes.
- The second option available for cryptocurrency holders is to use the manual backup system. You can write down the secret codes on a piece of paper and keep it somewhere safe. You can always save the written document with secret codes in your home’s safety or bank’s locker. The wallet with a seed phrase can be very discouraging as it requires frequent backup.
- The third option available for all is backing up your wallet’s secret codes on an external hard drive, USB device, or cloud memory. It would be best to use the tool that you can take care of all the time. For example, by storing the data on a USB memory stick, you can access it later on your laptop or computer.
- As we all know that the devices mentioned above will not last forever; it is advisable to use more than one method to backup cryptocurrency codes. The best option available for you here will be an Encrypted cloud backup.
- You must do it in an encrypted file format whenever you use electronic devices to back up the wallet’s codes. When you use this method to back up the figures, you will have to set a password to open the file. It is one of the safest ways to protect the data from theft. You will always want the funds to be secured efficiently than getting exposed to whosoever finds the file.
- The sixth tip for you will be to use the cloud. There are encrypted cloud files available to secure your secret codes. It is advisable for all not to backup the keys in unencrypted data on the cloud. The most current unencrypted files are Dropbox and Google Drive. These are accessible by anyone who can log in with your email ID and password. Therefore, it is not the safest way to secure the cryptocurrency wallet.
- Now that you have been backing up your secret codes in different hard drives, it is essential to do the disposal cautiously. Whenever you have to discard a USB memory stick, or external memory cards, etc., make sure you have transferred all the security codes to another device. The platform you use to save these codes must not have any evidence when you throw them away. In the current survey, billions of dollars of bitcoins got lost due to the unfortunate death of the Bitcoin owner.
- Now, if you need to secure the transactions you make through the wallet, you can always use multi-signature service. It ensures that the spending and purchasing transactions are in safe hands. Here, the system will demand more than one key to give you access to the safe. It would help if you learned the configuration to enable this feature while sending and receiving funds.
- Lastly, it would be best to have an efficient backup plan of your wallet to keep it safe for your family. What if you are gone, and no one knows about the funds you have been investing through cryptocurrency? You might lose every single transaction forever. You can always discuss the wallet with the most trustworthy person in your family. Talk to him about your secret codes and let him know where he will be able to find it after you go.
There is a higher risk when you backup your cryptocurrency wallet. However, you have to take this risk and be cautious enough with the location where you keep these secret codes. Furthermore, you can always go through other tips on the internet and use the way that seems to be most efficient for you and your family.