When Bitcoin, the first ever cryptocurrency was launched in 2009, no one could have imagined that the worth of one bitcoin could touch $US 69,000 one day. The allure of such a massive return on investment has attracted a lot of people toward investing in cryptocurrencies despite their volatility. Ever since Bitcoin’s launch, thousands of cryptocurrencies have emerged in the market. It has emerged as an alternate financial system that is decentralized i.e. one that is not controlled by any central financial authority.
The twin benefits of cryptocurrencies – the potential of exponential returns and privacy of financial activity – have naturally made it an appealing mode of financial transaction. Even international financial institutions have accepted the significance of cryptocurrencies. The IMF has said that cryptocurrencies can change the international financial system in profound ways. The IMF has estimated the market capitalization of cryptocurrencies to be a mammoth $2.5 trillion. With such a large amount of money invested in the crypto market, it is no surprise that malicious attempts have been on the rise to steal investors’ money. In this context, the demand for the security of crypto assets has risen significantly. Investors are always on the lookout for the Best Multi Cryptocurrency Wallet to safely access their crypto assets.
How are crypto assets stolen?
According to a study, crypto assets worth $US 4 billion were stolen due to online attacks. This has assumed alarming proportions as new investors are expressing doubts over the viability of cryptos. However, with a hard wallet for crypto assets, their fears are getting alleviated slowly. Nonetheless, it is important to understand the ways by which hackers steal money from crypto investors.
Phishing attacks are ways by which hackers send fraudulent emails that appear to come from a trusted source. Once the receiver clicks on the link, their sensitive information gets leaked.
Bridge attacks are done when different blocks in protocol communication are in transit. This makes it susceptible to attacks and has been the preferred mode of cyberattack since 2022. Hackers have stolen about $ 1.4 billion last year with bridge attacks.
Best ways to store your crypto key
Cryptocurrencies are digital currencies that are stored online in a network in an encrypted form using blockchain technology. They are decrypted through a private key – that consists of a string of characters – through which the individual can access his crypto assets. It is this key that enables access to investors of their digital currencies. Losing the key would mean losing their entire investment. Keeping the private key secure is of paramount importance. These are kept safe in a wallet. There are three types of wallets including the hard wallet for crypto which keep your private keys safe.
- Custodial wallets: A crypto exchange stores your private key online. It acts as the custodian of your key and that’s why they are called custodial wallets. The exchange guarantees the safety of your crypto assets and even provides insurance cover for a certain ceiling investment. Popular crypto exchanges that provide custodian wallet services are Binance, Coinbase, and Kraken. These exchanges are often subjected to regular cyberattacks which makes them work on their security features extensively.
- Hot wallets: These are web or mobile software which can store private keys online. Some popular hot wallets are Coinbase, WazirX, and Exodus. While it is cheaper to store your key in a hot wallet, investors must realize that the software is prone to hacking attempts and they should proceed with caution while choosing hot wallets. It is estimated that 17% of bitcoins are lost because of losing access to private keys either through hacking or simply forgetting.
- Cold wallets: Cold wallets are physical devices that can store crypto keys. These are compact hardware devices that are not connected to the internet. This makes it impossible for hackers to steal the investors’ keys. These wallets are much safer compared to the custodial and hot wallets because of the extensive security features embedded in these devices. The only drawback is that the investor has to remember his key and keep it safe offline otherwise the whole plan is futile. Regardless, these offer an investor much better chances to secure their crypto assets than any other means. Cold wallets are equipped with a detailed authentication system that requires a password and a pin as inputs to access the device. One can even access multiple accounts in the device and diversify their assets over different platforms.
The crypto market has seen huge activity in the last few years. Every year, more and more people are entering the crypto market. However, with increasing participation has come increasing cyberattacks to get hold of investors’ private keys that could be used to steal their money and hold the investor hostage for ransom. It is thus crucial for investors to keep their keys safe in the Best Multi Cryptocurrency Wallet out there. The best thing about an offline wallet is that it is not connected to the internet which protects the investors from malicious cyber attacks that are faced by investors when they store their keys online.