One of the peculiarities of the crypto world is that in most cases users are fully responsible for access to their crypto wallets via so-called private keys and seed phrases. If the crypto world aims to minimize the intermediation of various entities that can solely affect users’ assets (blocking of funds, conversion, or transfer bans,) then we need to shift the responsibility to users. But this also brings with it the risk of losing or breaking access, which cannot be influenced. If the user loses or forgets his private key the access to his wallet will be lost and nobody will be able to restore it. That is why keeping the access codes is a task that must be taken very seriously. This is also a key step you should consider when doing a risk assessment before investing in crypto.
Except for securing wallet access codes some more advanced users provided storage mechanisms for crypto assets in a pretty interesting way. To avoid losses that can cost the entire capital, crypto-asset owners divide their crypto funds into parts and store them in different wallets piece by piece, thus as if diversifying their funds. These actions have an idea that even if a user loses access to one account the rest of the funds in other accounts will remain safe.
This is one of the reasons the world of crypto wallets is so diverse. Jaxx and Exodus are one of the prominent representatives of this niche. These platforms provide access to more than 80 different assets and are available for both smartphone and PC users. You can safely keep some of your funds in one wallet and the other in another.
There are many cases when users have lost their tokens because they forgot their keys, signatures, or passwords. Over the years, as the crypto online community was growing, this became a major issue. People responded to these problems by providing a lot of possibilities to secure funds from risks like key loss or key compromise. One such opportunity to secure your money is the so-called multi-sig wallets or multi-signature wallets. Gnosis and Copay can be considered representatives of this niche. Multi-signature technology has existed in the cryptocurrency world for a long time, but this principle was invented much earlier than the crypto world. Unlike wallets, which have one access code, a multi-signature wallet can have several. For example, you open a wallet to which you and two other people close to you have access. You can set up a principle of transaction of this wallet two or three, so the withdrawal will be possible only when more than one of the users approved the transaction on their phone or their other device. So even if your wallet will be lost or hacked you will not lose your funds and will be able to withdraw them. Also, it will be much more difficult for fraudsters to hack several wallets instead of one.
The world of cryptocurrencies is very different and you will be more likely to see cases of fraud or burglary, so be vigilant and use all kinds of security levels which you can get from a crypto wallet. For better security, I suggest using multi-signature wallets. Good profits everyone, see you next time.