In 2022, hackers have already stolen nearly $1.9 billion in cryptocurrencies, according to a report by the company Chainalysis. This is 60% more than last year. The good news is that solutions exist to store your cryptocurrencies safely. But not all are equal.
Security is today a major challenge for the crypto ecosystem and its users. And despite all the precautions of exchanges, these platforms on which you can buy, sell or keep your cryptocurrencies, not a quarter passes without a new hack being deplored.
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7000 hacker bitcoins
Even the heavyweights of the sector are not spared. In May 2019, the Binance platform, which today claims more than 90million customers, had suffered a devastating attack. Within moments, the hackers had captured more than 7000 bitcoinsfor a total amount of approximately 40million dollars.
Beyond the risks of hacking, cryptocurrencies represent a paradigm shift: you can now become the owner of your values, without having to ask your bank for permission, says Charles Guillemet, CTO of Ledger, leader in asset security. digital and the Web 3.
However, when you leave your cryptocurrencies on an exchange, you stay in a centralized system. With the possibility that the exchange blocks your funds, or that an unscrupulous manager leaves with the fund, continues Charles Guillemet.
Result? Whether it is to protect their assets or to maintain their independence, more and more cryptocurrency holders are creating a walletthat is, a wallet to store their coins.
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Protect your private key
When you own cryptocurrencies, your coins are not in your digital wallet. They are stored in the blockchain. And to use them, to make transactions, you must be able to prove that you own them, explains Charles Guillemet.
For this, we use a mechanism of asymmetric cryptography with two keys. A public keywhich allows you to receive cryptocurrencies on your wallet, and a private keywhich allows you to spend it while validating outgoing transactions.
Anyone who knows your private key can impersonate you and initiate transactions to other wallets, warns Charles Guillemet. Worse: if you lose your private key, you will no longer be able to access your wallet and your cryptocurrencies will be lost. A phenomenon that is not insignificant, since according to Chainalysis between 16.4% and 22.4% existing bitcoins are now untraceable.
The real challenge is to keep this key safe from attackers, without taking the risk of losing it and without hampering your daily use. For this, there are three solutions, each with their advantages and disadvantages.
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1. Hot wallets
Hot wallets are applications that you can install on your computer or phone. They allow you to store your cryptocurrency online and access it from your device. Among the best known are MetaMask, Coinbase Wallet and Trust Wallet.
The big advantage is that it is a solution easy to use. Once your account is created, a simple password is enough to connect. And then you can easily buy, sell and pay in crypto.
However, this is not the most secure option. Your computer and phone are connected to the Internet, making them vulnerable, recalls Charles Guillemet. And if someone hacks your password, you risk losing everything.
This is why hot wallets are especially interesting for traders who transact daily on exchanges and need a quick access their cryptocurrencies. But be careful not to keep large amounts of long-term crypto on this type of wallet.
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2. Cold wallets
Second option: store your cryptocurrencies in a physical wallet, also call cold wallet or hardware wallet. In concrete terms, this solution takes the form of a small object that looks like a USB key and on which you can store your private key in complete safety.
The main characteristic of cold wallets is that they are not not connected to the internet, which makes hacking your private key virtually impossible. But this security comes at a price. For example, Ledger offers two hardware wallets: the Ledger Nano S Plus (79 euros) and the Ledger Nano X (149 euros).
However, this solution remains the safest. To steal your assets, hackers would have to enter your home, steal your physical wallet, and know the encrypted code to unlock it. And even if you lose or break your device, you will be able to restore your wallet another device using a 24-word passphrase.
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3. Paper wallets
The last option is also the most rudimentary. After all, what could be harder to hack than a good old piece of paper? If you want to keep your crypto safe from hackers, you can generate a public key and a private key on the BitcoinPaperWallet.com site and then print them out on a piece of paper.
The advantage is that this method does not cost a penny. And that you will be completely safe from online attacks. That said, paper wallets are not without risk. If you lose this paper or it is stolen, you lose all possibility of accessing your cryptocurrencies.
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