Cryptocurrency Basics and Safety

16 items · Lifestyle · Medium difficulty · 1 hour

Practical, beginner-friendly steps to keep your crypto safe.

• Research and choose reputable exchanges

  Check regulation, security history, fees, insurance, and supported countries.

• Enable two-factor authentication on exchange and wallet accounts

  Use app-based 2FA or hardware keys; avoid SMS-based 2FA.

• Use unique strong passwords and a password manager

  Generate long random passwords and store them securely in a manager.

• Set up a software (hot) wallet for daily use

  Choose a trusted, well-reviewed open-source wallet for spending and trading.

• Purchase and configure a hardware (cold) wallet for long-term storage

  Buy from the manufacturer, verify the package and device fingerprint before use.

• Create and record your wallet seed phrase; verify it by a recovery test

  Write words in order on a durable medium and confirm by restoring once.

• Create a metal backup of your seed phrase

  Use a metal plate to resist fire, water, and corrosion.

• Store seed backups in separate secure locations

  Keep at least two geographically separated secure places (safe, deposit box).

• Test wallet recovery and transfers with a small amount

  Send a tiny amount, then restore the wallet to confirm your backup works.

• Limit hot wallet balances and move large holdings to cold storage

  Set a personal cap for funds kept in software wallets and transfer excess.

• Keep firmware and wallet software up to date

  Install updates from official sources promptly to patch vulnerabilities.

• Verify URLs, emails, and signatures to avoid phishing

  Bookmark sites, hover to inspect links, and confirm sender addresses before acting.

• Consider multisig or time-locked accounts for large holdings

  Research multisig providers or timelock contracts for extra protection.

• Track transactions and export records for tax reporting

  Save CSVs, receipts, and exportable data to simplify tax filings.

• Diversify assets and set allocation limits

  Define percentage targets and rebalance to avoid overexposure to one asset.

• Document an emergency access and recovery plan for trusted contacts

  Provide clear instructions so heirs or agents can access keys without revealing secrets.

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