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Crypto Tips: What Should I Do With My Private Keys?

24 Nov, 2023

In the world of cryptocurrencies, safeguarding one’s digital assets is of paramount importance. A critical facet of crypto security involves the secure storage of private keys, which serve as the access code to one’s Bitcoin (BTC) or other crypto holdings. On account of the decentralised and immutable nature of blockchain technology, losing these keys is often permanent and can result in irreversible financial losses.

StormGain provides secure digital crypto wallets for the funds and gains that clients make during trading, which are linked to their StormGain account. Generally. It is beneficial to keep your crypto in StormGain wallets to earn bonuses and boost your client status and interest, but if you need to use your crypto outside the platform, then you will need to use private keys. In this guide, we explain the significance of private keys, the associated risks, and various recommended methods to back them up.

Understanding private keys

Digital crypto wallets rely on cryptographic keys for security and authentication. These keys, unique to each user, function in a similar way to online passwords—a way of proving that you are the owner of the account. The private key grants access to funds, while the public key facilitates transactions. Unlike conventional banking systems, the loss of a private key for a cryptocurrency wallet is irretrievable, emphasizing the need for careful protection.

How to get your wallet keys

Getting both types of keys is automatic. When a cryptocurrency wallet is created, it generates a public and private key. The private key remains confidential, known only to the owner, while the public key serves as an address for fund reception.

Uses of the private key

  • Ownership - Your private keys can be thought of as a unique digital signature, and it must be kept confidential to maintain ownership and control over linked funds. “Not your keys, not your crypto” is a common refrain in crypto forums for a reason. They can be stored in various formats, such as encrypted digital files, paper wallets, or hardware wallets.
  • Transactions - Private keys are used to sign transactions, with the corresponding public key validating the signature. Access to and control over funds are contingent on the user maintaining possession of the associated private key.

 Loss of private keys

Famous cases of people losing their private keys have become cautionary tales in crypto lore—just see our article on the biggest Bitcoin fortunes that were lost forever for stories of unfortunate individuals who lost hundreds of millions of dollars worth of Bitcoin because they could not recover their private keys! Don’t let it happen to you.

Methods of backing up private keys

Several methods exist for backing up private keys, each with its advantages and drawbacks.

  1. Paper backups: Cryptocurrency may be cutting-edge technology, but going with something more primitive for backups can have its advantages. Aside from simply writing down your keys on a piece of paper, you can also create a paper wallet using various free software online, which gives you a QR code printed on paper that needs to be scanned to access the funds. These offline documents cannot be hacked, which is great for security, but they are also vulnerable to physical damage or degradation, so should be kept somewhere safe and dry.
  2. Hardware Wallets: These are physical devices designed for secure offline storage. Like paper wallets, they are immune to malware as they are not connected to the internet. Although these hardware wallets offer increased security, they can still be subject to damage, loss, or theft.
  3. Encrypted Digital Files: Private keys can be stored on normal external storage devices such as USB drives but as encrypted files for enhanced security. However, they are susceptible to data corruption and possibly digital theft if you plug them into a compromised device. Therefore, it is advisable to make multiple backups.
  4. Encrypted Cloud Storage: Private keys can be encrypted and stored in the cloud instead of on an external drive. However, in this case, you are reliant on the cloud service provider’s security.
  5. Seed Phrases: A seed phrase is a mnemonic device that helps you recover your private keys. A computer program generates the human-readable phrase, which makes it easier to remember for wallet recovery, but it still needs to be kept private, recorded, and stored somewhere safe to prevent unauthorized access.

How to recover your crypto wallet

Using backed-up private keys

If the unthinkable happens and you lose access to your crypto wallet, then you can be thankful that you have your private key backed up somewhere. Most crypto wallets offer software that you can download to your computer and use to access your wallet—only download this software from the official website of the wallet provider! Simply install the software on your device and select the recovery or import function. You will be prompted to enter your private keys, which you can find on your backup, whether that is paper, a hardware wallet, or another method detailed above. Once you have completed this process, it is advisable to make a small cryptocurrency transfer and confirm that everything is functional.

Using a recovery phrase

Similar to the above, you use the wallet’s recovery feature via the provider’s software, but this time you enter the seed phrase associated with your private key to access to the recovered wallet.

Does my private key ever change?

Generally speaking, in standard recovery processes, the private key associated with a wallet remains the same. The aim is always to regain access to the same wallet using the original private keys.

Don’t fall for scams!

Crypto users may be targeted by phishing scams that ask them to provide their private keys to a shady third party posing as a trusted company or acquaintance. Never reveal your keys to anyone without verifying their identity, and carefully check email and website addresses if you are contacted to make sure that the other party really is who they say they are.

Buy, trade, and invest in crypto safely with StormGain

StormGain is the best crypto trading and exchange platform to use if you want the security of the best cold storage crypto wallet for your cryptocurrency, plus the benefits of easily being able to trade and exchange.

Not only does StormGain come with built-in secure wallets to store your cryptocurrency, but it also offers bonuses for keeping your crypto on the platform through the StormGain loyalty program. This lets you profit from your digital assets and keep them safe at the same time, just like the best traditional savings accounts.

Registering with StormGain is simple and takes just a few seconds. Sign up now and try a bonus account to see what StormGain can do for you!

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