Holding digital money is not easy, because you always need to make sure your money is safe. There might be many security issues that crypto owners face. One of them is a private key storing.
If someone knows your private key, they can easily use your funds. Some crypto traders might not know that leaving crypto on exchanges or hot wallets sometimes means you trust money to a third party.
Hence, you must know how to defend your private keys. In this article we have listed ways to store your private keys and protect your crypto assets. Keep reading to find out.
Public vs Private Keys
Cryptocurrency itself belongs to cryptography. In short, the main aim of cryptography is to decode and encode information. This protects data from third-party intervention. For transactions the network uses encrypted mathematical formulas matching your public and private keys.
A key is a chain of numbers and letters that indicates the address and determines the rightful owner. When you create a new wallet you use a public and private key.
Private key is a code consisting of any combinations of 64 letters from A to F or numbers from 1 to 9 generated outside the blockchain platform. It should be kept secret to provide asset security. A private key is needed to decode or decrypt code and to access crypto in the user’s account.
Public key can be accessible to everyone. It identifies funds on the blockchain and also plays the role of your transaction address. The public key and address are generated from a private key. A public key is needed to create an encryption code.
Both public and private keys cooperate and enable users to make transactions.
How to Keep Your Private Keys Safe
There are many risks of storing private keys. For example, you can forget your code, lose a device, or simply be hacked. We are going to speak about the essential ways to keep your private keys safe, and about advantages and disadvantages of various storing methods.
The most widespread way to protect your private key is by using a wallet. There are 4 different types of wallets such as:
- Software wallets
- Hardware wallets
- Web wallets
- Paper wallets
It seems that web wallets are the most vulnerable. For sure, the main advantage is that you can easily assess them just using the Internet. Online wallets are considered to be easy and cheap to use. Unfortunately, simple access also means a benefit for scammers.
Paper wallet is considered to be the safest way to hold crypto. Using a special platform, you create private and public keys, print, and store them offline. For sure, there are some risks. For example, you can damage your wallet or lose it, but still it seems the most protected and the cheapest among others.
Hardware wallet is offline storage that provides cold storing of digital coins. It looks like a flash drive or a keychain from a car alarm. Today, it is also supposed to be one of the most secure options for a crypto wallet. Hardware wallets are equipped with buttons (for example, for entering a PIN code), a USB for connecting to a computer or a laptop, and a display for easy navigation. Hardware wallet stores keys in offline and secure storage. Even if a scammer gets control of your computer, he cannot have access to your wallet data.
Software wallet is a desktop wallet in the form of an application for both smartphones and PC.
The advantage is that the wallet is accessible and usually user-friendly. Also, choosing a software wallet, you keep a private key without third party invention. However, you cannot be 100% protected from hackers because it is connected to the Internet.
Before using any software wallet, make sure the application you are choosing is secure.
7 Best Cryptocurrency Wallets for iOS here
Thus, the most secure way to store your private keys is using Hardware or Paper wallet.
#2. Seed Phrase
Seed phrase is another tool for private key encryption. The seed phrase is a chain of words containing an address, which is generated by a wallet. This is an additional protective measure for keeping your funds safe.
A seed phrase program generates unique word combinations, so you need to write it down and hide it in a secure place. If your computer, laptop, or smartphone is broken, you can recover all data using the seed phrase. These actions can be a great measure to keep your assets safe. Well-known wallets such as Bitcoin Cash Wallet usually have seed phrasing built-in.
Cryptosteel is a stainless steel tool that costs up to $329. It lets you over 90 characters of private data. Cryptosteel might be a storage for your private key, moreover, it is super-resistant to environmental influences, as the material does not allow it to sink or burn.
Codes and passwords are gathered manually from the characters chain. The characters are partially randomized for additional security.
Cryptosteel has several styles, such as the capsule and the cassette. They are both durable and transportable. You can travel with it since it is light, easy to hide and to protect.
#4. Secure Wallet
The Secure Wallet is an offline storage device. It is a combination of hot and cold storage, which has the appearance of a bank card. The card-wallet itself stays offline and connects only by an application through your phone.
The Secure Wallet device allows you to trade, exchange, and store crypto without any fees. Furthermore, the developers declare that your private keys will never leave the digital wallet.
#5. Crypto Art
Who says that such a serious and complex process as a private key storage cannot be creative? CryptoArt.com is an innovative community that makes masterpieces consisting of a public key on the front side of the picture and a private key on the other side under a special security sticker.
First of all, it proves its main function of protecting the private key from scammers. Furthermore, it is an excellent opportunity for crypto-amateurs to adore their favorite crypto as a piece of art.
Living in the digital world, we are all vulnerable to fraud attacks. However, we have proved that it is possible to reduce risks and keep your money safe. You always need to be sure that your private key is safe. Then, you should explore all possible ways of keys storing and compare them.
There are various tools, offline devices, online networks, and even creative means of keeping your data secure. Choose the best for you and enjoy your crypto experience.
Changelly is a secure instant crypto exchange that has 160+ cryptocurrencies available to be swapped and bought at market-best rates. Operating since 2015, the platform and its mobile application attract over a million visitors monthly, who all enjoy quick and simple exchanges, low transparent fees, and 24/7 live support.