Recent reports showed that cryptocurrency scams in the UK came close to £200 million last year. Although crypto is thought to be more secure than regular payment systems, there are a few things you can do to improve the security of your wallet and make it much more difficult for scam artists to get your money.

Trajan King, CFO of crypto shopping site Zellix, has shared his essential tips for using cryptocurrency safely, including suitable access methods and the best ways to store the information needed to access your money.

1. VPNs For Transactions

A VPN (virtual private network) can help protect your crypto wallet and privacy by encrypting your data and hiding your IP address when accessing online sites. This is important with cryptocurrency to keep your information safe during transactions.

VPNs also add protection against phishing attacks, DNS leaks, and malware/viruses, which are already a risk for internet users but especially for crypto traders when handling digital currency. Hiding your identity online is an extra layer of security.

2. Two-Factor Authentication

Another security method encouraged for all users is two-factor authentication (2FA), which adds another way of verifying your identity alongside a username and password. 2FA can include smartphone apps, fingerprints, or simply getting a confirmation text.

It similarly protects against phishing attacks, alongside attempts to brute-force password entry by making it harder for hackers to get access. However, you should not share any 2FA verification codes with anyone to ensure only you can access your accounts.

3. Seed Phrase Storage

A seed phrase is generated when using a crypto wallet and usually consists of 12–24 words that are used to create the keys to access your funds. They also allow you to regain access to your crypto wallet if it is lost, damaged, or becomes inaccessible by restoring it on a new device.

It is advised not to store this seed phrase digitally and to instead use specialist security equipment like metal wallets or a crypto seed storage notebook. You can encrypt a local drive to hold your seed phrase but keep the encryption key elsewhere.

4. Cold Storage

Cold storage involves keeping everything involved with your cryptocurrency offline to minimize the risk of theft from unauthorized online access. You can transfer funds to an offline storage method, alongside keeping your seed phrase and keys somewhere safe.

While you can invest in dedicated equipment, it is also acceptable to use a USB drive for storing any keys or even to write them down on paper. Make sure to hide what is used so no one else can find it and utilize different storage methods for separation.

5. Choose A Secure Wallet

Wallets allow users to access their cryptocurrency and can store the keys needed to conduct transactions. There are many types of wallets that are suitable for diverse needs, like offline hardware for long-term usage and software wallets for short-term.

Software wallets allow for more frequent access but are linked online to accommodate this, meaning they should be regularly updated with many security features. Hardware wallets are a form of cold storage that is not at risk of online vulnerabilities or threats.

6. Regular Updates And Bug Fixes

Whether using hardware or software, you should regularly update your wallets to keep up with new security features. This might include patch updates, bug fixes, and other improvements to maximize their ability to protect your crypto access and funds.

You are fully in control of handling your funds, meaning it is up to you to maintain your devices and security. It would also be beneficial to watch for any new developments regarding your choice of cryptocurrency and the wider crypto community.