Following the increased concerns about the safety and security of crypto assets it has become essential to own a cryptocurrency hardware wallet. However, most investors (especially novice ones) don’t know how to maintain their hardware wallets in an effective way that protects their crypto assets.
This article will guide you through some of the best practices for using hardware wallets.
(If you don’t own a hardware wallet yet, we recommend buying one as soon as possible).
If you already own one, ensure you implement these practices:
Double-check that every address you scan or paste is actually the address given to you by your source
This may seem obvious, but the irreversibility of crypto transactions leaves no room for error. Although rare, you might succumb to a malware attack that will change the address you copied into the clipboard. The only way to catch it is to confirm the address after pasting.
Take nothing for granted: double-checking an address is not time consuming. Simply compare the first and last few characters of the address shown on your computer screen with the address displayed on the screen of the hardware wallet. Before long, this will become a habit that could save you more time and money!
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Never type your Recovery Phrase into a computer
Some hardware wallets require that you interact with an external website. For instance, Ethereum is commonly used via websites such as MyEtherWallet. These sites connect directly to your hardware wallet with the bridge interface you installed when you set up your device.
These sites can only obtain a list of public addresses for a particular asset or account from your hardware wallet. However, they don’t have the ability to withdraw any funds, even if they have been compromised.
If you don’t use a passphrase, your recovery seed is enough to gain access to your crypto assets. The physical security of your recovery seed is much more important than the physical security of your hardware wallet. If your hardware wallet is stolen, the thief is less likely to crack your PIN and your crypto assets will remain secure. But if the thief has your recovery seed, they can easily gain access to your wallet.
Of course, be smart about the online exchanges where you buy and sell cryptocurrencies. Some of the top, most widely-used and trusted exchanges include Abra, Binance, Coinbase, Coinmama, and LocalBitcoins. You should try out these different exchanges and see which ones best serve your needs and preferences. The crypto world is constantly growing and transforming, and you should stay educated and vigilante.
Choose a good PIN
A hardware wallet’s security system is a powerful tool to keep your crypto assets secure. If your wallet is stolen, the only thing between the thief and your crypto assets is your PIN and/or passphrase. Therefore it’s imperative that you choose a good PIN. According to an analysis done in 2012, about 11% of PINs used were 1234. Do not use this easy guess PIN to secure your hardware wallet.