Why a Cold Wallet is not an option but a necessity
Security is a very integral part of human life. Whenever you want to make important decisions like where to live, what to eat, and places to travel to. There’s no doubt security is one of the factors you will consider.
The security of digital assets is an important decision for a crypto holder. It is common to encounter hackers and scammers in the crypto space. These guys are always looking for lapses so as to steal your funds. Therefore, you need strong security and full control of your digital assets so as to protect yourself.
Using a Cold Wallet increases your level of security by disconnecting your private key from the internet, which means without any other means of exposing your private key your Crypto cannot be hacked/scammed.
The Solana Hack
The latest hack on the Solana blockchain shows that storing your digital assets on a cold wallet is a necessity and not an afterthought.
According to Fortune.com, “Security firms estimate that the hacker responsible has made off with at least $5.2 million worth of assets — including Solana’s native cryptocurrency, SOL, a small number of non-fungible tokens (NFTs), and over 300 Solana-based tokens.”
In the aftermath of the hack, Changpeng Zhao, the CEO of Binance, further solidified the importance of a cold wallet for every digital asset holder.
In his tweet, he also mentions that a CEX (centralized exchange) is an option for storing funds safely.
However, as a cryptocurrency holder, you should understand that CEX is not completely safe because a single hack on them causes lots of damage and you also do not have control over your keys. This undermines one of the core ideas of crypto: decentralization and self-custody.
“Experience is the best teacher.”
The above quote is a great saying; however, it’s also important to learn from others and not allow your personal experience to serve as a cautionary measure.
You might have heard many stories about hacking and thought it was fiction or folklore; however, they are real-world experiences.
Samczsun thread on Twitter about how his wallet was almost hacked.
We want you to be safe and prepared for any kind of attack. This is why we would like to share a handful of simple but effective rules you can follow. Read them carefully.
What can be done to be safe? Five major rules
Rule Nr.1: Knowing the strategies of your attackers
We are sure you don’t want to be in the position of the people in the images above.
To be safe, you need to be familiar with cyber criminals’ strategies, where and how they attack.
We wrote a blog post on how to avoid scammers on Telegram, Twitter, and Discord scammers. Kindly take your time to read before you invest in a new Defi or Crypto project. Adhering to these safety tips could be your ticket against getting scammed.
The key takeaways are the following:
- The support staff will not send a DM first.
- Always use Two-Factor Authorification (2-FA).
- Don’t click on links that might be malicious.
- Never give away your Mnemonic / Passphrase to anybody.
Rule Nr. 2: Not your Keys, not your Crypto
Any exchange or wallet that you don’t have a sole-proprietary of your private keys is not under your control, and like most CEX (Centralized exchange), they can decide to ban, seize or stop operations in your country of residence.
Scenarios that can lead to these can be prevented by using cold wallets like AirGap. Always remember that if you don’t have the private keys to your wallet, you can’t lay claim to ownership of the digital assets. Like a popular adage, “He who dictates the piper owns the tune,” so “He who owns the private key owns the coin.”
Rule Nr. 3: Don’t burn your fingers by Hot Wallets
There are hundreds if not thousands of wallets out there. The biggest share of them are so-called hot wallets. A hot wallet is a wallet that is always connected to the internet. Therefore they are vulnerable to security breaches. For a crypto investor, “Go cold” is more than a phrase; it’s needed to ensure maximum security of digital assets.
A cold wallet, also called cold wallet by cryptocurrency users, is a physical device that helps to store your digital assets completely offline. It can be an offline device like a phone or USB drive.
A child playing with fire will likely get burned. He will likely get a soothing relief if a block of ice is placed on his hand. That is what a cold wallet does; it keeps you calm when hacking stories emerge in the cryptocurrency ecosystem.
Rule Nr. 4: Open Source is always King
An open-source wallet has its code open to the public for review, modification and are transparent about how your digital assets are secured.
Open source projects in crypto, from open source wallets to open source dApps and DeFi coins, offer ultimate transparency and decentralization.
A trusted source to verify secure crypto wallets is https://walletscrutiny.com/ which recently labelled AirGap Vault as one of the few reproducible Wallets.
Rule Nr. 5: Having protective gear
Protective gear is important to a warrior in the battle to prevent the enemy from striking.
Having a cold wallet as a crypto investor is the protective gear needed to prevent your digital assets from being compromised.
If you use a hot wallet and download a malicious file, it will install a virus on your computer, which goes through everything you have stored locally, including your MetaMask file, which contains your mnemonic, and will leave your security details compromised, which can lead to hacking.
So using a Ledger or AirGap protects you because the secret is not on the hot device. We have created an overview of various cold wallets. This overview states the important features(Availability, Price, Transparency (open-source), Supported Coins etc.) to prioritise before choosing a cold wallet.
This overview shows that AirGap can compete with the most common cold wallets out there. Furthermore, it is the most accessible of them all since it is free and also is not dependent on a supply chain.
If you already have a MetaMask setup as your standard wallet, you can add a layer of protection by Integrating your MetaMask with AirGap. To learn how this is done follow the step-by-step guide.
To get a full overview of the AirGap security features, visit the documentation website: https://support.airgap.it/airgap-vault/introduction