You have bought Bitcoin (BTC), and Ethereum (ETH), but where do you store them? When investing in crypto, it is crucial to secure your coins. Your funds may be stolen or hacked, and you could lose your entire investment.
This article will discuss the best ways to keep your funds at SAFU and give you examples of common scams that you should avoid.
The Main Takeaways
- A secure crypto wallet is essential for crypto investments. It can prevent hackers from stealing your funds.
- Trust Wallet is a non-custodial wallet that does not have access to users’ assets or private keys. This is a safer way to keep your funds in full ownership, provided you protect your secret phrases.
What are Crypto Wallets?
Crypto wallets do not store cryptocurrency, contrary to popular belief. These wallets are tools you can use for connecting to blockchain networks. The necessary information is generated by crypto wallets to enable you to send and receive digital assets through blockchain transactions.
These transactions can be made using both public and private keys. The public keys are used for generating wallet addresses that you can share with others to receive crypto. Your password is your private key. It is used to verify transactions and create digital signatures. The private key must remain secret.
A twelve-word secret phrase is usually given to you when you set up a crypto wallet. It should be unique for each wallet and should not be shared with anyone. This secret phrase is tied to your private keys. It should be written down and kept offline. Your private keys, which are cryptographic codes that are linked to your public key, are used to verify transactions. Because crypto wallets are designed to process private keys automatically, it is not necessary to interact directly with them.
Your secret phrase will most likely be the only way to access your private keys. Your private keys will be represented in the 12-word secret phrase that you receive when you open your wallet. They are effectively your PIN and can also be used to access your wallet if you lose it.
There are two types of crypto wallets:
Software wallets and hardware wallets. Software wallets can be accessed via an app installed on a device like a smartphone or a laptop. When searching for the best wallets, it is a good idea to use encrypted apps like Trust Wallet. Software wallets are a way to manage your crypto wallet via internet connectivity. They fall under the “hot wallets” category.
Trust Wallet is the most widely used software wallet on the market, along with MetaMask.
Hardware wallets, on the other hand, allow you to manage your portfolio using a hardware device and keep your private keys offline. These are called “cold wallets” and digital signatures are created “in-device” (offline), before being broadcast to your network via your laptop (the internet-connected device).
Binance Academy has more information about the different types of crypto wallets.
What is Trust Wallet?
Trust Wallet was launched in November 2017. It is a mobile multi-chain, non-custodial crypto wallet. Trust Wallet can also be used as your primary wallet for Web3 access. Trust Wallet allows you to access over 4.5 million digital assets including cryptocurrencies, NFTs, and fiat currencies.
Trust Wallet offers many other functions than just holding funds. With the built-in DApp Browser, you can connect to popular DApps such as PancakeSwap or SushiSwap. You can also access 66 blockchains such as BNB Chain. You can also buy, trade, and stake digital assets using the Trust Wallet app.
Trust Wallet’s unique selling point is its non-custodial nature. This means that you have full ownership of your private keys as well as your assets on the Blockchain. Your secret phrases, unlike web extension wallets, are protected and kept on your phone. Trust Wallet has no access to your funds. Trust Wallet is the best option for your money, provided you keep your secret phrases secure.
See our Academy article Trust Wallet – including how to use it.
How do you secure your trust wallet?
You have now opened your Trust Wallet. You have more power, and therefore more responsibility. Next, you need to learn how to protect your money. Here are some tips:
1. Never reveal your secrets or private keys to anyone
Your secret phrases and funds will only be as secure as the way you store them. They safeguard your wallet against unauthorized access. They should not be shared with anyone. Keep them secret and offline.
2. Keep a backup copy of secret phrases
Always keep backup copies of secret phrases. You can use the secret phrases to restore your wallet in the event of a lost, stolen, or damaged phone. There is no reset or recovery process. If you lose your phrases, your funds will be lost.
3. Keep a hard copy of your secret phrases in a safe place.
Hackers could still access your funds if you store your secret phrases online. Writing your secret phrases on paper is safer, provided you keep them safe. In case one paper is lost, you might want to make multiple copies. You can also use fireproof or engraved envelopes.
4. One secret phrase, one wallet
It may be possible to use the same secret phrase on multiple wallets in certain cases. However, this is not recommended. It is best to use a unique secret phrase on each wallet. Hackers won’t be able to access your wallets with the same secret phrase.
5. Keep it warm, keep it cold
You can divide and protect your assets by using cold storage or hardware wallets to store larger amounts of crypto. Trust Wallet, a secure hot wallet that is decentralized and can be used for daily trading and storing small amounts of crypto, can be used.
6. Keep up to date via the Trust Wallet channels
Trust Wallet staff won’t ever ask for your private keys or secret phrases, nor will they send you messages asking for giveaways or promotions. Always refer to Trust Wallet channels if in doubt. They will confirm the identity of the other party and never ask for any personal information.
Trust Wallet should not be installed on rooted devices. They could contain malware. Before downloading any app, make sure to always visit the Trust Wallet official website.
How to Avoid Common Scams in Cryptocurrency
Scammers are finding new ways to profit from people who invest in cryptocurrency. We’ll show you how to avoid the most common scams in crypto.
1. Fake websites and fake mobile apps
Fake websites and mobile apps are at the top of this list. Fake websites and mobile apps are easy to miss if you’re not careful. Scammers often post URLs that are almost identical to real ones and ask you to click. You could be directed to a fake site and asked to log on or to install malicious software.
Although everything may seem to be working as expected, once you login the malware can steal your login credentials, personal information, private keys, secret phrases, and login credentials. Scammers can then easily transfer your cryptocurrency from your wallet.
Pay attention to which websites and DApps your wallet is being connected to. Don’t give them access or allow them to use your private keys. Scammers might be able to transfer your assets by signing transactions or communicating with them via malicious DApps.
Tips for reducing risk:
- To verify if they have a mobile application, visit the official website of the exchange. Download it from their official link.
- Save your most visited domains and official sites to bookmark. Search engines sometimes mistakenly show malicious websites to you. Before you log in or connect your wallet, always verify the URL.
- For your accounts, activate 2FA. Although it doesn’t guarantee security 100%, 2FA is more difficult to bypass than a password. Even if your login credentials have been compromised, it can make a big difference in protecting your money.
2. Fake customer service
Scammers may also pretend to be support staff via social media such as Twitter, Reddit, or Telegram, and send you messages. They may claim that your account is “compromised” and ask you to transfer your funds to a temporary wallet to resolve the issue. Your crypto may be compromised if you transfer funds.
Don’t panic if you receive a customer service DM, text, or email from a cryptocurrency exchange or wallet you use. To verify the identity of the person or business, ignore it. Don’t give out your secret phrases or private keys to anyone. They will likely ask for your private keys or secret phrases.
3. Fake giveaways
There are a lot of giveaways on social networks today. There are many giveaways on social media that offer free crypto. They are likely attempting to scam you by asking for your money. You may be sending money to a scammer’s address. Once you have, you won’t likely be able to contact them again.
Most legitimate giveaways don’t require you to send any crypto. It is best to ignore any request to send 1 BNB to receive a 10x return.
4. Projects with high APY
Many DeFi projects offer high returns for staking to attract users. Users lock their crypto in smart contracts and liquidity pools. They will receive a portion of newly-minted tokens from the project in return. These tokens can then be traded on cryptocurrency exchanges to make profits.
Although high APY is certainly attractive, it’s important to remember that you should always DYOR (Do Your Research), before investing. There are many DeFi scams. There are many DeFi scams. We have seen projects withdraw funds from liquidity pools and then disappear. Some also dump the new tokens onto the market, which results in the token price dropping to zero.
Open source is a major feature of most DeFi projects. Although talented developers may make modifications to the protocol to improve the project’s functionality, this also makes the projects more vulnerable to fraud and bugs if someone exploits them.
It is possible to distinguish a legitimate project from a scam by examining the purpose of the project and the team behind it. Also, look at the token roadmap and smart contract audits. This Academy article will help you identify DeFi scams.
What to do if you’re in a coma
If your Trust Wallet is compromised, we recommend the following to help you protect yourself:
- You can report the incident to the Trust Wallet customer service team via the official Trust Wallet website. This will allow other users to be alert.
- Make a new wallet using a secure device. Then, move your funds from the affected wallet to a different wallet. Keep your secret phrases and private keys safe.
Stolen funds can be difficult to track and are unlikely to be recovered due to the nature of blockchain transactions. Once transactions have been confirmed on the blockchain they cannot be reversed. Trust Wallet is a noncustodial wallet that doesn’t store private keys or have access to funds.
This article will help you to understand how to protect your crypto wallet and avoid risk by following the recommended steps. Cryptocurrency is a fascinating space. Unfortunately, like many other industries that attract attention, it can also increase the number of criminals. Make sure you do your research and only use exchanges or wallets with customer service departments. You can reduce risk and increase the safety of your investments by following the advice provided in this article.