In this article, Trading Education will share their top safest ways to store Dogecoins. This will help you get to know the best ways to store Dogecoins.
Dogecoin (DOGE) reached an all-time high price of $0.7376 on Saturday, 8th May 2021 after trading for insignificant prices for the first seven (7) years it became a tradable token.
Buoyed by comments through interviews and tweets through his Twitter handle, the self-proclaimed DOGEFATHER, Elon Musk promoted DOGE as one of the coins with hidden potentials to millions of his followers.
The resultant effect was the more than 3,200% returns holders of the coin have experienced in 2021.
The rise in the demand for meme-inspired currencies has also led to cybersecurity issues since Dogecoin (DOGE) continues to be involved in several crypto scams.
Although several exchanges continue to update their software with the latest security encryptions, hackers are also closing in on new ways to bypass these security systems.
In most cases, hackers have found a way of rerouting digital coins from one digital wallet to the other. Because of the decentralized nature of the crypto sphere, hackers can take off with millions. Investors can lose everything since some of these exchanges are not well-regulated by credible agencies that can hold them liable for their loss.
- Users can lose Dogecoins (DOGE) and other digital currencies due to theft, loss of private keys, and computer failure among others.
- Cold Storage, which can also be referred to as Offline Storage, is one of the top safest ways of holding Dogecoins (DOGE). This is because they can be accessed without an internet connection. As a result, in the event of an extensive cybersecurity issue, holdings in such storage wouldn’t be affected. Despite the safety and security it presents, many traders and investors still prefer hot wallets because of their convenience in being able to connect to several blockchains within seconds.
- Hardware Wallets should be used for storage by cryptocurrency holders who want to hold onto their Dogecoin tokens as well as other coins with an eye on the long term.
Currently, technological advancements have created two ways of storing fiat currency and they are through physical and digital wallets.
Digital Wallets are used to store digital coins such as Dogecoin (DOGE). They can be web-based or hardware-based.
There are three (3) ways through which digital wallets can be kept.
Firstly, digital wallets can reside on a mobile device. Secondly, digital wallets can be kept safe by writing or printing the private keys, passwords, or passcodes used to access the wallet on a piece of paper. Lastly, digital wallets can be kept on a personal computer.
Some of the questions that continue to trend online are, how safe are any of these digital wallets, what are the best ways to secure your crypto wallet, and are online crypto wallets safe?
The answer lay in the ways the wallet holder manages the digital wallet.
Private Keys ─ All forms of digital wallets come with a set of private keys. Without these keys, it would be impossible for you to access your DOGE holdings.
Whatever happens, if you choose to store your DOGE in a digital wallet, you will have to choose one of cryptocurrency exchange or crypto wallets created purposely for storing coins.
On cryptocurrency exchanges such as Binance, eToro, Huobi Global, Kraken, Coinbase, Gemini, OKEx, and FTX among others, you can be given private keys which can be modified by you.
In the event of a loss of your private keys, you can go through an account restoration face. Under this process, links and pin codes are normally sent to email addresses and phone numbers associated with your account. Following the required process helps you restore your account.
The biggest threat to your Dogecoin is the loss of private keys either by forgetting about them or having them stolen by a friend or hackers.
When you create a wallet on platforms that supports the storing of Dogecoin (DOGE) such as Hardware Wallets (Ledger Nano X, Trezor Model T, Ledger Nano S, TREZOR, and KeepKey), Desktop and Mobile Wallet (Atomic Wallet and Jaxx Wallet), Online Wallet (Dogechain Wallet), and Paper Wallets, passcodes are generated for you in addition to private keys.
They normally come in the form of at least 12 words which are arranged in a particular way. In the event you forget a single word, there is a huge chance that you wouldn’t be able to access your wallet again (it doesn’t matter the size of your DOGE holdings).
In addition to this, mobile phone and personal computer malfunctions (such as the spread of malware and other forms of viruses) can crash essential parts of the system such as the central processing unit (CPU) and hard disk. In most cases, this leaves your DOGE holdings inaccessible and useless.
A great example can be attributed to the Petya Malware and the WannaCry Virus that rocked the world in 2017. From April to July 2017, more than 100 countries and millions of computers were affected by these viruses.
They targeted Microsoft Windows-based systems, “infecting the master boot record to execute a payload that encrypts a hard drive’s file system table, and prevents Windows from booting. The resultant effect is the crippling of your prized files."
To get your files back, hackers subsequently demanded that affected users make payments in Bitcoin to regain access to their files. Those who did not pay the hacker's lost access to some of their most confidential files.
Supposedly someone held DOGE through desktop wallets such as Jaxx and Atomic; the malware rendered the holdings useless due to the inaccessibility of the application.
Below, we are going to take a look at some of the best ways to store Dogecoin Coins safely.
Hot wallets are digital wallets that operate on internet-connected devices such as personal computers, smartphones, and tablets. To put it simply, they are wallets found online.
Because digital wallets run in a space where we all contribute to the internet of things (IoT), some of these IoT devices are malicious programs that operate concurrently with our private keys. Therefore, our accounts are vulnerable to malware attacks since the private keys are generated and accessed through internet-connected devices such as Cloud.
Although many people have touted hot wallets as the most convenient way of storing Dogecoins due to how easy and fast they can be used to process transactions, they have one specific flaw which is security.
Millions of people who have used hot wallets for more than a year may argue that it is 100% secure. Little do they know that several investors who had their wallets compromised and millions of people in the more than 100 countries who lost their prized assets due to WannaCry and Petya felt they were secured on their wallets and personal computers until they lost everything.
There are numerous ways through which your account can be compromised. A great example can be attributed to sharing wallet links on social media.
There are more than 70 million crypto wallet holders. Unfortunately, some of them have taken to social media platforms Facebook, Twitter, Reddit, and Telegram offering people the chance to make awesome returns within a short period.
Unfortunately, many people fall into such traps and share their wallets with such anonymous individuals. Some of these faceless financial advisors are crypto fund managers who are highly technologically savvy individuals. They compromise private keys and take away millions of dollars worth of DOGE and other tokens.
Some of the advantages of hot wallets can be likened to a checking account. You can use hot wallets to hold a small amount of DOGE that will help you meet your daily online expenses.
Hot Wallets encompass desktop and mobile wallets such as Atomic and Jaxx Wallet, online wallets such as Dogechain Wallet, and cryptocurrency exchange Custody Wallets.
There are differences between being a cryptocurrency holder on a cryptocurrency exchange and personal wallets. Wallets provided by cryptocurrency exchanges are called custodial accounts.
Under custodial accounts, you are given a chance to create passwords in the form of names, numbers, and symbols (for example, Name2468!).
Having this password does not mean you hold the private keys to the Dogecoins in the wallet of your account.
On other hand, personal wallets provide you with a chance to set up passwords BUT provide you with 12 names which are the private keys (passcodes).
To help you understand, follow this scenario.
There have been several reports of cryptocurrency theft from exchanges. Most of the hackers were able to take off with several cryptocurrencies which were held in the accounts of thousands of people.
Once this happened, customers could log onto their accounts because it was custodial (they had access to the accounts and not the holdings). Once hackers compromised the private keys (passcodes), they were able to take off with several DOGE and other tokens because the coins were held by the exchange and NOT the customer.
This is the primary reason why the question of what are the safest ways to store Dogecoin and other tokens continues to trend online. More importantly, you should know that if you don’t hold the private keys, you cannot claim full ownership of coins.
In the volatile market of cryptocurrencies, no one knows what is going to happen tomorrow. This is the primary reason why you should hold a substantial amount of your DOGE in your personal (cold) storage and some in hot wallets such as custodial accounts on cryptocurrency exchanges.
Editor’s Note: Inasmuch as hot wallets continue to face vulnerabilities to thefts and malware, their use in the execution of transactions in a fast and quick manner makes it highly efficient.
Many experts across the crypto trading and investing space believe cold wallets are the safest option for the storage of Dogecoin (DOGE) and other cryptocurrencies. To put it simply, cold wallets are less vulnerable to cyber-attacks because they are not connected to the internet. Offline Wallets or Hardware Wallets are the other names for Cold Wallets.
Cold Wallets (Hardware Wallets) that supports Dogecoin (DOGE) such as Ledger Nano X, Trezor Model T, Ledger Nano S, TREZOR, and KeepKey uses a program that operates without the internet to store the address of users as well as their private (passcodes).
Just like the numerous applications, we install on our personal computers and smartphones, cold wallets can be run without the internet. In the process, users can still access their portfolios in real-time.
In addition to the aforementioned wallets, another way of storing wallets offline is through a Paper Wallet.
How do Paper Wallets work? Paper Wallets work in two ways.
Firstly, paper wallets produce public (custodial) and private keys (passcodes) that are printed on a piece of paper.
You can store the piece of paper in a safe and secure place. Secondly, a paper wallet can also be generated through the printing of QR Codes. Once you want access to your wallet, all you have to do is to scan your QR Code and you are good to go.
Moreover, you can also store your private keys (passcodes) on a hardware wallet in the form of a USB drive.
Because of the independent nature of USB drives, they offer several advantages over hot wallets.
A desktop can be infected with a malicious program, but if private keys are stored on a USB drive, private keys can be retrieved.
The safety of a USB drive is solely dependent on the person who is in charge of its usage.
Overall, when searching for the safest ways to store your Dogecoins and other digital currencies, cold wallets are better than hot wallets. An extensive study should be conducted by you before you set up cold or hot wallets.
Check Out: How to Choose a Cryptocurrency Wallet
Other Security Precautions
Personal computers are not perfect systems. In the event you decide to choose Atomic and Jaxx Wallets, you should ensure that you have the same files stored safely on a USB drive or any other device you can find convenient. It has been recommended several times that Wallet.dat files can be backed up and stored on external drives, USB drives, as well as compact discs.
It would be in your interest to put passcodes on your backup files so that they cannot be accessed by third parties.
Nowadays, there are personal computers (desktops and laptops) and smartphones (mobile phones, tablets, and pads) and they all need to stay up-to-date with the latest anti-virus packages.
Many people have started mining as well as storing their DOGE holdings on their smartphones. Once the phone crashes from numerous connections to malware-infected personal computers, they lose everything.
Learn from the millions of people who lost their files as well as money to perpetrators of the WannaCry (Ransomware) and Petya (Malware virus) and safeguard all your systems with the latest software.
You should know that as anti-virus developers do all they can to create unbreakable systems, hackers are also doing everything they can to find ways around it. Therefore, you don’t have to settle for free anti-virus packages. Invest a few tens and hundreds and protect your DOGE.
The most popular multi-signature authentication is two-factor authentication (2FA). With this process even if a friend finds your password, he or she would have to provide an additional answer such as where you went to school, your favorite song, food, or soft drink. In most cases, the person may need to provide another passcode to gain access to the account.
Choose wallets that adhere to inherence, possession, and knowledge which are collectively called Authentication Mechanism.
The extra layer of security has helped protect accounts on cryptocurrency exchanges, online financial services accounts, and will be highly invaluable to the safety of your DOGE coins.
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