Are you looking to invest in crypto with the strategy of “buy low, sell high”? If so, there are two things you must consider: security and investment risk. Crypto wallets provide great benefits and can hold money just like any financial institution. However, keeping your wallet safe is the joint responsibility of both the wallet user and the wallet provider.
Wallet security has evolved since the first cryptocurrencies, where all users had to do was keep their private key address safe. However, that is no longer enough with more eyes on cryptocurrencies. As a matter of fact, the crypto space has experienced their share of hacks and scams resulting in great financial losses. Therefore, other security measures, such as Google Authenticator, email verification, and mobile verification, came into play. These security options and more are available to help you protect your Crypto.com wallet.
To start with, you can’t expect security personnel to protect what you keep exposing. For instance, you hire security to keep your home safe but still go around telling people the secret passage that leads directly to your bedroom. If you intend to keep your Crypto.com wallet safe, you are as responsible for the safety of the wallet as the user.
Let’s learn about methods to keep your Crypto.com wallet safe. To protect your wallet, you need to understand the different types of wallets out there.
What are the types of crypto wallets?
There are two types of crypto wallets; custodial and non-custodial wallets. The type of wallet you decide to use will depend on your preferences.
What is a custodial wallet?
A custodial wallet is a crypto wallet provided by a third party, for example, crypto exchanges like Binance, Crypto.com, and Coinbase. A custodial wallet has control over your private keys. Since a custodial wallet has control over your private keys, we advise you to do your research before using one.
As much as a custodial wallet can be considered a potential risk since you don’t have access to your private key, most providers invest heavily in security and provide additional security measures in regards to financials and authentication methods.
What is a non-custodial wallet?
A non-custodial wallet is the exact opposite of what we described a custodial wallet to be. In a non-custodial wallet, you have control over your private keys. When using a non-custodial wallet, you are responsible for protecting your private key (seed phrase) through backup mechanisms like cold wallets. Also, you can choose to write your private key down on paper and lock it in a safe wallet. One last method that most consider safe and crypto wallet providers suggest is to memorize your seed phrase, which can be difficult.
How to protect your Crypto.com non-custodial wallet?
The first step to protecting your Crypto.com DeFi wallet is to keep your private key secure. If you lose your mobile device, the only way to recover investments in the Crypto.com DeFi wallet is with your private key (seed phrase). The private key is like your bank’s password; access to it gives hackers access to all your funds.
Another security measure to ensure you have a safe Crypto.com DeFi wallet is to set up multi-factor authentication. Multi-factor authentication makes it more difficult to move your crypto out of your wallet. With multi-factor authentication, you need to provide access codes from your mail, Google authenticator, and even your mobile number.
The DeFi wallet allows you to connect to DApps. Connecting to DApps gives third-party access to your wallet. Ensure that you verify the authenticity of any third-party app you want to connect to your wallet. Also, disconnect all connected DApps when you are done.
How to protect your Crypto.com custodial wallet?
With a custodial wallet, you have much of your protection job cut out for you. The Crypto.com wallet holds on to your private key and protects the key.
How can you help in protecting your Crypto.com wallet? The only responsibility Crypto.com assigns to you if you use the Crypto.com custodial wallet is to remember and have access to the email you registered with. This is the easiest thing any crypto exchange can require of you. In a case where you need to log in to your wallet on another device, you only need to enter your registered mail and confirm your identity by verifying on your mail app.
Other security measures include multi-factor authentication and using a passcode. Crypto.com has recently added verification using your mobile number. This ensures that hackers find it difficult to gain access or transfer your crypto assets.
How does Crypto.com protect your wallet?
Crypto.com spends a lot to make sure that your wallet remains safe, irrespective of the type of wallet you decide to use. Crypto.com makes use of a 100% cold storage wallet to ensure that no one has access to your wallet except you. Also, the Crypto.com wallet provides all updated security measures to make your safety journey easier.
You can never be too careful. For additional security measures, Crypto.com provides insurance on USD balances. Crypto.com has FDIC-insured all USD balances against theft. The insurance covers up to $250, 000 USD balances on the platform.
As one can never be too careful with the increase in hacks in the crypto community, Crypto.com has created a bug bounty platform that urges all developers to try to find leaks in the Crypto.com framework. Any bug identified and reported to the authority will be rewarded. This is a strategy that has helped identify bugs before black hackers can find them.
In this informative article, we have explored a variety of security measures Crypto.com takes to ensure the security of either your custodian or non-custodian crypto wallet. With this knowledge, we hope you will have a smooth crypto investing journey.