Understanding The Importance of Security in Cryptocurrency Wallets

Literally millions of people have joined the world of cryptocurrencies in recent years. One best example is, Coinbase, a popular cryptocurrency exchange that holds 2 million new clients within a couple of months. Yet another example is the famous crypto wallet platform, which has found 1.8 million increase in the same time period. 

Security is playing a critical role in cryptocurrency space since 2018. The current state of the crypto market has raised the voices for stronger security measures. SEC Chairman, Jay Clayton has highlighted the importance of increased security in blockchain.

Facebook has finally announced its making of cryptocurrency efforts officially. It has unveiled the making of the crypto wallet called “Calibra” which will use its new cryptocurrency “Libra”. Even Social Media giants have started to march towards the Crypto Wallet Developments!

Since most of the users store their cryptocurrencies in exchanges, these trading platforms will have complete access to the user’s wallet. 

Crypto Wallets in Cryptocurrency Exchanges:

People are now looking for a smarter wallet and robust contracts which are using Advanced Blockchain and adopting Hot and Cold storage techniques. Private keys can now be stored in a wallet that has premium security features like Auto-rejection which eliminates the duplicate payments and authenticates beyond the two-factor method. 

To get a reliable crypto wallet, it is more important to go with a perfect crypto exchange. Therefore, users are also looking for cryptocurrency exchanges which would provide secured wallets to store the cryptocurrencies. Companies like Coinsclone, usually provide a high-end Cryptocurrency exchange script with all the security features incorporated.

Hot and Cold Wallets: Which is more secure?

The basic distinction between both is, Hot Wallets are connected to online while Cold Wallets are kept offline. Therefore, funds stored in Hot Wallets are easily accessible compared to Cold Wallets.  

While coming to security, A Cold Wallet is more secure than Hot Wallets since they aren’t connected to the Internet. Most hackers target Hot wallets and transfer the private keys to their wallets. One such thing has happened in 2014 when Mt.Gox suffered a theft from its hot wallet of 850,000 bitcoins valued at more than $450 million. Yet another recent hack with popular crypto exchange Binance which experienced $40 Million, the past month. 

These Hackers usually steal funds from Blockchain Cryptocurrency accounts since the private keys are stored on the online servers. Thus, most of the users prefer to go with Cold Wallets.

If you are in a dilemma between choosing a Hot or Cold wallet, you should analyze your requirements. If you just want to store your currencies in the wallet, you can go for Cold Wallets. While if you are looking for large transactions, Hot wallet can be a perfect choice since transactions are done in seconds. Storing funds on Hot Wallets doesn’t mean that, it is unsafe. It just means that your funds are at a risk at hacking. Therefore, select the crypto wallet which perfectly suits your requirements. 

How Hackers can steal funds from Crypto Wallets?

The answer is a human weakness. The most popular hacking is Phishing. This usually takes place through Emails. Hackers would send fake emails on behalf of your wallet services which can differ by one or several letters/numbers from the real URL. 

While some hackers go a step ahead by redirecting to a fake URL instead of the real wallet service online URL. One such thing happened during April 24, 2018, on My EtherWallet users where a loss of $150,000 has been recorded. 

Furthermore, users store the information of private keys in Mail, disclosing to the public accidentally, using unprotected or Public Wi-fi networks where hackers can easily sniff the data and wallets. 

To prevent this, one can use Cold Wallets. They are the most secure storage. In addition to this, Paper Wallets can also be used. But in Paper Wallets, there are concerns since they are physical elements that can be easily lost or damaged. 

Where to find the best Cold Wallet with high-level security?

By taking all these hacking mechanisms into account, Coinsclone had launched a Cryptocurrency Wallet Application to get rid of these issues. We incorporated high-end security features which most of the crypto wallets failed! 

Coinsclone understands the importance of keeping your assets safe. We rely on password protection and storage key encryption techniques to assure the users that all the funds are stored in the wallet application.

  • Password Protection

Coinsclone’s universal crypto wallet supports a great number of cryptocurrencies to make the users experience a comfort zone. Whenever the user wants to transfer their funds, they will be prompted by entering their passwords. 

  • Private Key Encryption

Every crypto wallet will have a single, unique key assigned. The address is the combination of string and letters through which users can send and receive funds on the Blockchain. In Coinsclone’s Cryptocurrency Wallet, every currency will have a specific private key. 

cryptocurrency wallet

We develop wallets for operating all major cryptocurrencies, such as Bitcoin, Ether, Litecoin, as well as custom cryptocurrencies. Our wallets support all required crypto transactions maintaining the highest level of security.

Coinsclone goes a step ahead in protecting the private keys with encryption mechanism. Moreover, we don’t store any passwords. Whenever the user creates a wallet, Coinsclone asks for the password so it can use it at that moment for encryption of all private keys before storing them in the user’s local phone. 

This approach can protect users against advanced phishing attacks, other hacking mechanisms who try to access the keys.  

Apart from these security measures from us, it is the individual’s responsibility to safeguard their own crypto wallets. Here are a few guidelines as a user, one should remember:

  • Never disclose your password with others.
  • Never unveil your Bitcoin Private key with anyone.
  • Do not reuse Bitcoin Address.
  • Don’t reveal your personal Email Address, Contact Number and other personal information on social media.
  • Have a habit of backing up your wallet periodically. 

If you are interested in building a cryptocurrency wallet application similar to Coinsclone, you can contact us right away!