5 Things to Notice Using Crypto Wallet

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By Tokenize Xchange
March 23, 2022

A cryptocurrency wallet is a must-have tool for any cryptocurrency investor who wants to own the coin he desires. However, improperly storing coins increases the danger of losing funds, as hackers frequently target wallets with weak protection. So, how do you keep your coins safe when utilizing a coin wallet? Tokenize will go through 5 things to keep in mind when using crypto wallets in this article.

5 things to notice using crypto wallet
5 things to notice using crypto wallets

1. Use different crypto wallet addresses.

Because no identification verification is necessary, a person can easily own several wallets with no limit on the number of wallets they can have. Hackers frequently exploit flaws in poorly secured coin wallets, therefore improperly storing currencies has a high risk of losing money. 

>>>Read more: How to choose the best crypto wallet for beginners

Cryptocurrency investors should spread their funds over multiple wallets to lessen the danger of a single wallet being hacked. One address can be used to access DeFi services, some addresses can be used to store cash or tokens, others can be used to make payments and trade. 

2. Do not keep your coins in web wallets for an extended period of time.

The second thing to notice using crypto wallets is to keep your digital assets in a safe place. Cryptocurrencies, in general, operate differently than centralized financial institutions such as banks. You will lose all of your crypto assets if it is hacked, and you will be unable to get a reimbursement from anyone, even if you alert the police or regulatory authorities since there’s no policy implemented yet. 

crypto wallet
You should not keep all of your valuables in a web wallet

Web wallets, on the other hand, are frequently the target of hackers looking to misappropriate funds by exploiting weaknesses. As a result, you should not keep all of your valuables in a web wallet. You can reduce the danger of losing money by keeping a little quantity of money in your web wallet. Don’t put all your eggs in one basket, especially a web wallet basket, that’s our advice. 

>>>Read more: Protect Yourself From Scam

3. Do not share your private key

The crypto wallet’s private key, serves the same purpose as a bank card’s PIN: it is used to open the wallet and gain access to the coins held within. The most important thing is that you never disclose your Private key/Key to anybody else. Leaking your private key/key can result in your assets being seized totally and you being unable to recover them.

4. Keep a backup of your password and your coin wallet’s private key/key.

Many terrible examples exist where crypto wallets containing a desirable amount of Bitcoin are worth hundreds of millions of dollars but cannot be accessed because the wallet password has been forgotten.

5 things to keep in mind using crypto wallet
5 things to keep in mind using crypto walles

Stefan Thomas, a German programmer, is a good example. Thomas had over 7,000 Bitcoins on his hard drive, but he had forgotten his password. Thomas has only attempted two incorrect password attempts out of a maximum of ten. If Thomas is wrong, he will lose his entire Bitcoin equivalent of $300 million USD at current market value. That’s a painful lesson for wallet users: always save a backup of your passwords and your private key/key in case of an emergency.

5. Take into account cold wallets

The last thing to notice using crypto wallets is to consider using cold wallets to store your digital assets for the long term. 

cold wallet
if the asset worth has risen to thousands of dollars, you should consider purchasing a cold wallet

You can use hot wallet if you don’t have a large amount of cryptocurrency. However, if the asset worth has risen to thousands of dollars, you should consider purchasing a cold wallet. Cold wallets, also known as offline or hardware wallets, do not connect to the internet, reducing the danger of being hacked or taken over. Cold wallets typically cost between $50 and $150 USD, making them a good investment for carefully storing assets. Ledger, Trezor, Safepal, and other famous cold wallets are just a few examples.

For any crypto trader, a cryptocurrency wallet is a must-have tool. And, by selecting the right crypto wallet and using the lessons learned from Tokenize, investors, particularly newcomers, can reduce the danger of property damage caused by the wallets themselves. Keep following Tokenize Blog for more crypto-related articles. 


All content produced by Tokenize Exchange is intended solely for educational purposes. This should not be taken as financial or investment advice. Individuals are advised to perform due diligence before purchasing any crypto as they are subject to high volatility.