Wallet Part III – Security

Keep your crypto safe

Most people will start their crypto journey through third party wallets or services. Although these hot wallets are easier to use in general, they are also very popular with cyber criminals. Reports show that cryptocurrency thefts have become more frequent, such as scams and finishing attacks. Becoming your own bank comes with great responsibilities. We at Boba believe that educating yourself on how to manage your security in Web3, is a crucial element of controlling your own financial future.

Rule of thumbs

With crypto’s increased popularity comes increased interest from criminals, so crypto owners need to ensure that their transactions are handled in a secure environment to avoid theft. It’s important to take these steps extremely seriously, because when it comes to security on the blockchain, you rarely get second chances.

  1. Use a hardware wallet

For your long term investments it’s important to purchase and store your keys on a hardware wallet, known as a cold storage device. Currently this is the safest way to secure your crypto. See wallet types.

  1. Never share your seed phrase

A seed phrase, also known as your “master private key”, might just be the single most important layer of security for crypto users. Seed phrases can serve as the last line of defense preventing you from losing access to your crypto in the event something happens to your device or hardware wallet.

Good to know

Seed phrases have many names: master private key, recovery phrase, seed backup, seed words, mnemonic phrase, secret words, backup words.

  1. Create a physical backup

Users are responsible for protecting their own private information. There are no recovery methods possible once you lose your keys. Make sure you create a back-up of your 12-24 seed phrase.

Write down your seed phrase on a piece of paper (or something more durable) and place it at a secret location. Be aware to never store your seed phrase digitally or in the cloud. And never store the full seed phrase in a bank vault, deposit box or any third party safekeeping infrastructure.

  1. The use of a hot wallet

Only use a hot wallet for smaller investment amounts or interactions with protocol dApps. Keep in mind that a hot wallet is more vulnerable to cyber attacks than a cold wallet, because it’s connected to the internet.

Best practice

Did you know that you can connect your hardware wallet to your hot wallet? Yes, you can and we highly recommend you to do so. For example, Ethereum’s most popular hot wallet Metamask supports this function. We explained it in a full metamask tutorial.