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The post Multisig Wallets: Using Multi-Factor Authentication for Your Crypto and the Benefits  appeared first on Coinpedia Fintech News

In recent years, the popularity of cryptocurrencies has exploded. While this has opened the door to many new opportunities, it is also important for cryptocurrency users to protect their assets. The significant increase in the value of cryptocurrencies has made them a popular target for hackers. A multisig wallet can provide much-needed security and reduce the chances of your assets being hacked or stolen. 

What should you know about multisig wallets and how they can help protect your cryptocurrencies? 

What are the Biggest Pitfalls to Avoid When Storing Cryptocurrencies? 

You should think carefully about how you store your cryptocurrencies and protect them from harm, and there are a number of common mistakes cryptocurrency investors and users make. Some of the most common examples are: 

Not Backing Up Seed Phrases and Passwords: You should make sure to secure your seed phrase and use a strong password. You don’t want to lose this information as you may lose access to your assets forever. It’s a good idea to store multiple copies of your seed phrase and password on paper, and keep this in a reliable, safe place. 

Storing Your Cryptocurrency in an Online Crypto Wallet: Centralized cryptocurrency exchanges are the easiest way to store cryptocurrencies, but they are also highly vulnerable to digital attacks. Therefore, you should store your cryptocurrencies in offline wallets or a combination of the two. 

Using Public Wi-Fi Networks: You must ensure that you are not using public Wi-Fi networks for cryptocurrency transactions. If you’re on a public Wi-Fi network, it’s very easy for someone to intercept your information. Therefore, only use properly secured internet connections. 

By avoiding these common mistakes, you can protect your valuable cryptocurrency assets and reduce the chances of being hacked. 

How to Protect Yourself Against Hackers 

Cryptocurrency hacks are becoming more common, but there are ways to protect yourself. The most important points to keep in mind are:

Use a Cold Wallet: Cryptocurrencies should be stored offline in cold wallets, which means the wallet is not connected to the internet. Additional steps may be required if you want to send cryptocurrency to others, but it’s worth it for the extra security. Because hot wallets are connected to the internet, they can be vulnerable to cyberattacks. 

Use a VPN: When investing in crypto assets, you should make sure that you are using a Virtual Private Network, usually abbreviated as VPN. This is an extra layer of digital security that encrypts your online traffic and hides your IP address and location. 

Update Your Password Regularly: Furthermore, change your password from time to time. You don’t want to use the same password for everything, and you don’t want to use one password for a long time. Rotating passwords is important to prevent someone from stealing your information as well as avoiding using the same password for multiple accounts. 

Be Proactive by Protecting Your Cryptocurrency with a Multisig Wallet 

Multisig wallets provide one of the most comprehensive storage solutions with the option to store your keys on a combination of a mobile device, hardware device, and wallet software. This prevents the single point of failure associated with most software-only crypto wallets. 

As stated above, a multisig wallet allows you to authorize crypto transactions using multiple private keys. As a result, this wallet requires multiple cryptographic signatures to access your funds. You can even control the number of keys required for access. For example, most users opt to require three keys to access a wallet and send transactions as this is the best way to limit your risk of a hack. 

With a multisig wallet, if someone steals one of your private keys, they don’t have the other keys required to access your wallet, meaning that your crypto is still safe. This is very similar to multi-factor authentication in the digital world, and you can apply the same security principle to your crypto wallet. 

If you want to actively protect your cryptocurrencies, a multisig wallet may provide the security you need. Consider reaching out to an expert who can help you find the best possible multisignature wallet to meet your needs.

Disclaimer: This is a guest post. Coinpedia does not endorse or is responsible for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to the company.

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