Are Crypto Savings Accounts Safe to Use? | Hacker Noon

Author profile picture

@bitcompareBitcompare

Bitcompare is your crypto comparison site

As of June 2020, there were more than 5,500 cryptocurrencies in circulation. By 2027, the market value for cryptos will reach $1,758 million! The impressive statistics don’t stop there. 

Among the top cryptos, Bitcoin remains king. Its price has skyrocketed by more than 70 percent year-to-date, and many people are predicting a very bright future for this digital currency.

How brilliant is this future? Consider this… 

Jesse Powell, Kraken’s CEO, asserts Bitcoin will become the world’s currency, eventually hitting $1 million as a price target. With all of these impressive prognostications, it’s understandable to want to get in on the action.

But how safe is a crypto savings account? Here’s what you need to know about choosing the right crypto-based savings accounts for your current needs.

Crypto Finances: What You Need to Know

Recent price surges in Bitcoin (BTC) and Ethereum (ETH) have many consumers scrambling to get into crypto investing. But these consumers don’t know where to start or how to stake their funds safely. 

Exacerbating this dilemma is unwanted attention from hackers excited by the potential presented by cryptocurrencies. The economics of digital currency indicates that hacking attacks will not only continue but increase. 

Unfortunately, tracking the activities of hackers can prove tricky. Why? Because these individuals are also masters of eliminating their digital footprints. 

What’s more, cryptos are not regulated by a central entity or bank. On the one hand, their decentralized approach cuts out the middleman and nixes many layers of potential bureaucracy and corruption.

On the other hand, it also means that consumers have no legal recourse when their digital funds get lost or hacked. The trick remains learning how to take advantage of digital currencies while protecting your assets. That said, with some foundational knowledge in best practices, you can begin earning money faster than you may realize. 

Want to know more about the future of cryptos? Check out this fascinating read on tapping into Ethereum with Dmitry Buterin

Why You Need a High-Yield Crypto Account

It’s all-too-easy to let the risks associated with digital currencies deter you from becoming involved in the market. But that would be like refusing to use the internet for fear of getting a virus. Life itself comes with risk. 

The best approach involves mitigating risk and then moving forward, whether we’re talking about using the internet or dealing in cryptos. After all, the benefits you stand to reap from a crypto savings account outweigh the potential hazards. 

Just think about it, earning up to ten percent on your dollars in a straightforward savings account. Of course, you must convert your dollars into stablecoins and then place them in a crypto banking account before you can start earning at these rates. 

But how do you harmonize the extreme volatility of cryptos with acceptable financial practices? By following the safest digital currency practices. Only then does it make sense to include cryptos in a balanced portfolio. 

What if you’re also interested in learning more about crypto trading? Here’s what you need to know about how to long Bitcoin while staying aware of its super cycle. What’s more, check out this quick yet essential read on Bitcoin halving and its stock-to-flow ratio. 

If you’re sticking with us to learn more about safe and secure crypto savings account features, here’s what you need to know.

How to Maintain a Safe Crypto Savings Account

What are some precautions you can take to protect your assets when dealing with cryptos? Let’s start by considering the wallets where you store funds. Physical wallets or online wallets should be used to keep most of your crypto assets. 

That also means you should only keep a small fraction of your funds in an online wallet. You should also store your physical wallet in a secure and private place, such as a safe deposit box. Remember to separate your private and public keys.

Secure both with strong passwords and multi-factor authentication. As cryptos continue to grow in popularity, you’ll see more traditional options emerge. However, remember that you are ultimately responsible for ensuring the safety of your cryptos. 

One of the best ways to do this is by never reusing passwords across your accounts. This tip proves especially important since crypto services remain prime targets for hackers. In other words, you should assume that all of these platforms will get breached at some point. 

It’s important to remember that cryptos represent innovative technology that continues to evolve quickly. Nevertheless, the easiest and best way to protect your assets remains these tried-and-true security tactics. 

When you couple password rotation with a platform that offers two-factor authentication, you can ramp up the safety of your funds. You may also wish to consider a trusted password manager, which will take the guesswork out of the process.

Tips for Safe Crypto Use

You should also spend some time carefully researching the platforms you’re considering. In the process, you need to gain an understanding of each company’s security features. That way, you’ll have an overview of the steps each one takes to protect your money.

How do you know if an entity can be trusted? There are a few hallmarks you should look for. These include incorporating the best security practices on the market today, from SSL/TLS encryption to air-gapped devices kept offline to store cryptos. 

You should also consider splitting your assets across more than one platform. That way, if there’s a problem with one entity, you won’t risk all of your funds in a single event. But this tactic will only work if you use different, complex passwords for each platform. 

This last tip remains imperative, and it again underscores the need for a secure password manager. That way, you can automate the entire process and never lose a password.

You also need to understand that phishing campaigns represent a significant issue. These attacks can happen at any time and target you via any device or platform. In other words, phishing attacks can take place via social media, texts, third-party messaging platforms, or email. 

But you also need to understand that there are malicious mobile apps that can log your keystrokes or watch the activity on your screen. Watch out for all of these. While you likely install antivirus software on your computer, consider doing the same with tablets and smartphones.

After all, think about how much information you place on these devices. The possibility of strangers gaining access to this information would prove devastating. Make sure that you secure them. 

What to Look for in a Platform

When looking for entities to work with, pay attention to two main things, the nation where the company is based and the licensing they have received. As a crypto investor and trader, it behooves you to work with companies that are located in stable, developed, democratic nations.

Avoid working with companies located in nations known for corruption. Instead, look for entities that are regulated and well-licensed. Licenses may include both a traditional operating permit as well as governmental registrations. 

You should also take a hard look at each company’s history and reputation. These two factors will provide you with plenty of insights into the culture of a brand and how they treat customers. 

The Safest Crypto Platforms

What are some of the safest crypto platforms to use? Some of the most reputable entities to host your crypto savings account include BlockFi, Celsius Network, and Gemini. Here’s a mini-intro into each of these platforms.

BlockFi

If you’ve spent any time researching crypto platforms, you’ve likely heard of the BlockFi platform. One of the most popular platforms out there today, BlockFi is based in the US and enjoys a stellar reputation. The platform boasts backing from reputable investors such as Winkelvoss Capital and Coinbase Ventures, too.

Celsius Network

Another company worth considering is Celsius Network. This UK-based entity boasts offices in the US and UK. Celsius has some of the best and most transparent disclosures. They’re also launching a self-insurance plan for all users, which will up the ante when it comes to protecting your assets. 

Gemini

The Gemini platform is another well-known company that boasts famous founders, the Winkelvoss twins. Based in New York, Gemini is licensed and regulated in America and has maintained a trustworthy reputation. 

Learn to Harness Cryptos 

Cryptocurrencies have taken the financial world by storm and with good reason. It’s only natural you’d want to get in on a piece of the action with a crypto savings account. The information above will help you to do this securely and safely. That said, doing your research and following the recommended precautions is ultimately up to you. 

Are you ready for more fascinating tech-related stories? Keep reading to learn more about the challenge of fighting crime on the dark web.

Tags

Join Hacker Noon

Create your free account to unlock your custom reading experience.

read original article here