One of the most important safety mechanisms that you can implement for your crypto protection is related to your mentality. You should always expect that there will be scammers out there trying to bamboozle you out of your funds. Crypto is designed with decentralization and anonymity in mind, and while centralized organizations are still trying to enter this system, it’s still easy for people to hide and act outside regulators' oversight. Because of this, the crypto space is filled with all sorts of scammers and these scammers will go to extreme lengths in order to steal your money.

When entering the crypto market, you should follow one popular saying, “If it looks too good to be true, it probably is.” No one is going to offer you something that is too good to be true and when someone does, you should be on high alert. It’s also very important to never share any of your personal information online, especially your wallet security phrase and private key. You should never trust anyone who you meet online.

There is also a popular scam, where scammers aim for people who have already been scammed. If you are one of these unfortunate people who have been scammed in the past, you might find the scammers trying to reach out and offer their support in fund retrieval. But in reality, these people are there to scam you out of whatever you have left. 

It’s also very important to never download anything from unknown third parties. There are many phishing and malware scams out there, where you are asked to download some sort of software. Once downloaded, these scammers access your data and simply gain access to your funds, without you even knowing it.

When you are storing your cryptocurrencies, it’s always best to distribute your funds across multiple crypto wallets. This is especially true if you own large amounts of cryptocurrencies and want to protect your investment.

But when you distribute these cryptocurrencies across multiple crypto wallets, you might end up losing funds on only one wallet. This will limit the overall damage and you will not be left with empty pockets. When you are distributing these funds, it’s best to distribute them across multiple different wallet types. With this, you will have different levels of protection for each wallet and different usability. This will help you to use your funds more efficiently, with funds that you are trading with remaining on exchange custodial wallets, big investments can be on cold wallets, and so on. 

Using hardware also called cold crypto wallets is probably the most secure way of storing your cryptocurrencies. Cold wallets are hardware wallets that come in the form of USB drives or other hardware. The main benefit of these wallets is that they are not connected to the internet at any given time and even if your computer is hacked into, the hackers will not be able to access your cryptocurrencies. 

When storing your crypto on cold wallets, these cryptocurrencies are stored offline, and the only time they are connected to the internet is when you are making transactions and have a hardware wallet connected to the computer. There are also software cold wallets that operate in a very specific way. These wallets are designed to be installed on your smartphones, but when doing so, it’s important to only use this smartphone as a crypto wallet and nothing else. If you have a spare smartphone, these wallets will remove the need for buying additional hardware and you can simply use a spare phone. 

One downside of storing cryptocurrencies on hardware wallets is the lack of comfortability. When using hardware wallets, you need to have this wallet on you in order to access your funds. But walking around with this wallet is not a good idea, since you might lose it or someone might steal it from you. So there might be situations where you need access to your funds, but you don’t have your wallet with you.

Another good security step that you can take is keeping your wallet security phrase in a physical form. When you create a crypto wallet, it does not matter whether it is hot or cold, you will be given a security phrase. This phrase consists of multiple randomly generated words and gives anyone who knows this phrase access to your wallet. 

One of the first things that most people do is write down this phrase and keep it on their computer or mobile device. But we all know that digital space is not safe and the possibility of someone gaining access to your data is not unheard of. Because of this, it’s best to write down this security phrase on a piece of paper and keep it somewhere safe. With this, you can be sure that if someone were to simply gain access to your data and nothing else, they would not be able to steal funds from you.

Hackers might hack into your computer, but only be able to retrieve data and won’t have access to do anything else. If this happens to you and you have your security phrase stored on this device, hackers can simply take them and access your funds through their own device. When this happens, there is nothing you can do about it. Since crypto wallets don’t come with names and there are no chargebacks or anything similar, if hackers take your funds they are gone forever. 

Another important thing to consider when protecting your funds is to avoid using public WIFI with the device which has access to your private key or funds. Public WIFIs don’t have the security levels needed to protect one's personal information, and there are some hackers who are sitting on these WIFIs and looking for prey.

Because of this, you should never make transactions when connected to the public network and it’s best to wait until you are able to connect to a private network. This will make sure that hackers will not be able to easily access your private network and steal information and funds from you.

Using authentication applications and tools is also a great way to protect your funds. This can be done with custodial wallets provided by exchanges and your private wallets as well. When you are storing your funds on the exchange, it’s best to have multiple different authentication tools turned on in order to protect your assets. For example, when logging into your account, you can have SMS authentication, email authentication, and special authentication tools turned on. What this means is that anyone trying to access your account will not be able to do so, until they pass all three authentication steps.

When it comes to non-custodial cold and hot wallets, authentication tools are also available to use. Some crypto wallets have the ability to use biometric authentication, meaning that on top of the security phrase you will need to pass a fingerprint or face recognition before gaining access to your funds. With this, even if someone gains access to your information, they will not be able to do anything, unless they somehow trick biometric authentication.

This tip is for those who are using centralized exchanges and storing their cryptocurrencies there. When you are doing so, it’s very important to do thorough research into the exchange in question. Exchanges are centralized firms that provide custodial wallets, meaning that these are exchange wallets and not yours. So these exchanges are keeping your funds, but of course, you have access to them whenever you want.

But there is always a possibility that you might lose access to these funds if the exchange does something bad and loses your money. When doing research into the exchange there are two important things that you should keep an eye out for. First is the security measures used by the exchange in question. Some exchanges have very high-security levels, while some are on the lower end of the spectrum. It’s always the best option to go for ones that have high-security levels, but blindly believing these measures is also a bad choice.

This takes us to the second thing you should consider when evaluating these exchanges, namely Proof-of-Reserves. It is something that every trader should check before depositing their funds on the exchange. Proof-of-Reserves is the audited document that provides insight into the exchange reserves. When you deposit crypto onto the exchange, these are your coins, and the exchange is not permitted to do anything with them unless they inform you and gain permission. But there are some exchanges that use user-deposited funds to fund their operations or they might loan out these coins to other users. This might not result in anything bad and you can withdraw your funds whenever you want. But if the exchange suddenly receives a large number of withdrawal requests, they might fail to satisfy the need due to a lack of reserves. FTX is a great example of this happening and because of this, you should only use exchanges that have public Proof-of-Reserves available. 

If you are someone who is active on social media platforms, limiting who can interact with you is another great security measure. There are a lot of scammers out there who pretend to be someone else as they mimic the profiles of others. Then these scammers might send you messages and ask for certain things, and while it’s not that hard to spot these fake and scammer profiles, there will be times when you fail to do so.

Because of this, it’s best to make your social media profiles private, or simply don’t allow people who are not your friends or followers from messaging you. For example, on Twitter, you have an option of people not being able to message you unless you are following them. Discord also has a function that only allows messages from friends. With this, you know who you are communicating with and won’t fall victim to scammers. If someone unknown sends you a follow request or message request you will be able to go over their profile and only after doing so decide whether to communicate with them or not.

This will also make navigating the social media space much more enjoyable. Even if you are someone that will never fall for these scams, it will still make your time much more enjoyable. You will not be bombarded with scam messages and will only see what you want to see. 

Security is one of the most important factors to consider when investing in cryptocurrencies. While crypto and blockchain bring high levels of security, it’s still very important to implement your own security measures. When entering this market, you should be prepared to deal with a lot of scammers and be ready for every circumstance. For security measures, one of the best practices is to use cold crypto wallets for storing large amounts of crypto. It’s also good to store these cryptocurrencies across different wallets and not concentrate them in one place. All in all, there is no single formula for perfect protection and the best practice of high security is to be on the alert and don’t do anything without giving it a second thought.