What Are The Safest Ways To Store Shiba Inu Coins?

Last Updated January 27th 2022
10 Min Read

After reaching its peak in the cryptocurrency boom of May last year and subsequently dropping substantially in price, cryptocurrencies like Shiba Inu Coin have experienced a great deal of popularity in 2021. The rise of Shiba Inu and other cryptocurrencies has also led to a rise in the number of hacking events that have mired the cryptocurrency space in the last few months. 

Given the fact that many beginners are unsophisticated and therefore do not know their way around the best ways to engage in safe investment practices, hackers have come up with ingenious ways to steal large sums of money from such traders and investors. 

Some of the most prominent thefts are the ones that happened to victims without them being able to do anything about it. In many cases, hackers rerouted tokens from one digital wallet to the other. Remaining powerless with no one to hold accountable to due to the decentralized nature of digital tokens, hackers continue to take off with millions. 

Key Takeaways 

  • Users can lose Shiba Inu Coins and other digital currency holdings as a result of computer failure, loss of access keys, and theft, among others. 
  • Offline Storage, normally termed cold storage, is one of the safest ways of holding Shiba Inu Coins (SHIBS). This is because they are not accessible via an internet connection. Despite their availability, many still prefer hot wallets because of their convenience. 
  • Hardware Wallets should be patronized for storage by cryptocurrency holders who want to HODL their Shiba Inu tokens as well as other crypto tokens.

Nowadays, fiat currencies are kept in physical and digital wallets. The second way of keeping wallets (digital wallets) is used in storing digital coins such as SHIB. This digital wallet can be web-based or hardware-based

The wallet can be kept in three ways. It can be kept safe by printing or writing the private keys and addresses used for access on a piece of paper. Secondly, the wallet can be kept on a computer desktop, and lastly, it can also reside on a mobile device.

One of the questions that continue to trend online is, how safe are any of these digital wallets? The answer lay in the ways the wallet holder manages the digital wallet. 

Digital Wallets contain a set of private keys. Without these keys, a Shiba Inu Coin holder cannot access his or her account let alone their tokens. The biggest threat in Shiba Inu security is the loss of private keys either by forgetting by some or having the keys stolen by a third party. Once this happens, the legitimate holder of the wallet will lose all their holdings. What’s more, phone and computer malfunctions (virus) can crash essential parts of a hard drive leaving computers that hold Shiba Inu Coins useless. 

A great example of this can be attributed to the RansomWare attack in May 2017 dubbed WannaCry that held millions of computers in more than 100 countries ransom for accessibility to their most prized files. Those who failed to meet the demands of the hackers within the specific period given for the payments of what was requested lost their files in the process.

Below, we are going to take a look at some of the best ways to store Shiba Inu Coins safely. 

Hot Wallet 

Hot wallets are digital wallets found online. They operate on internet-connected devices like tablets, phones, and computers. Because they run in a space where malicious programs also operate, they become vulnerable since private keys to your tokens are generated on these internet-connected devices. While hot wallets remain the most convenient way for millions of Shiba Inu holders because of how they quickly assets can be used to make transactions, they lack security.  

Many people may find this statement outrageous but several investors that felt they had the necessary security to protect their wallets have had their funds stolen. This has happened many times and occurs in several ways. One of these ways is boasting on social media platforms (Facebook, Twitter, and more specifically Reddit) about your SHIB holdings while your wallet’s security remains suspect. 

Since you do not know the real identities behind certain messages, holding a hot wallet of Shiba could be compromised. 

Hot Wallets can help small-budget cryptocurrency investors who are not at risk of losing higher sums of money. Hot Wallets can be likened to checking accounts. While savings and investment accounts hold large sums of money, a checking account holds smaller amounts that are used to meet daily expenses. Hot Wallets encompass most cryptocurrency exchange custody wallets, web, desktop, as well as mobile wallets.

You must know that being a cryptocurrency holder on an exchange is different from holding digital tokens such as SHIB in a personal wallet. Cryptocurrency Exchanges provide wallets known by the term custodial accounts. This means that while you create passwords for the accessibility of your account, you do not hold the private keys to the cryptocurrency holdings in the wallet. 

As it was seen in 2021, in the event a hacking incident occurs and various custodial accounts are compromised, there is a huge probability that your holdings will be lost. More than 95% of cryptocurrency exchanges are not insured by the Federal Deposit Insurance Corporation (FDIC). This has brought relevance to the safe storage of all cryptocurrency holdings. This has led to the popularization of the phrase, not your keys not your coin. 

As earlier pointed out, it is unwise to put all your eggs (cryptocurrency) in one basket (hot wallet), especially, exchange accounts (eToro, Binance, Coinbase, Kraken, Huobi Global, Gemini, FTX, etc.). Instead, we’d highly recommend that you hold a substantial amount of your crypto investments in your personal (cold) wallet. 

Editor’s Note: While hot wallets face difficulties because of the existence of hackers all over the internet, it’s highly efficient in the execution of timely transactions of cryptocurrencies. 

Cold Wallet

Cold Wallets are known across crypto circles as the safest option for the storage of Shiba or any digital tokens. To put it simply, cold wallets are not connected to the internet. As a result, they are less susceptible to attacks. They can also be referred to as hardware wallets or offline wallets

Cold Wallets store the address of users as well as their private keys on a program that does not need an internet service to operate. Therefore, it could be run at any time without putting the private keys of the user at risk while allowing them to view their portfolios in real-time. 

Another important way of storing Shiba cryptocurrency offline is called a paper wallet. There are specific websites that generate paper wallets. But how do paper wallets work? Paper Wallets produce public and private keys that are printed out on a piece of paper. You should always remember that the only way you can access holdings in particular addresses is accessibility to that piece of paper. 

This is the primary reason why certain people laminate their paper wallets and store them in a safe in their homes. Others go the extra step of storing their papers in a safety deposit box at their banks. Note that paper wallets are only relevant when there is the piece of paper and the blockchain it can access; it does not have any other corresponding user interface. 

One of the ways of securely storing private keys on a hard wallet can be done through a USB drive device. There are serious advantages of storing your keys on USB drives over hot wallets. Once information is copied to a USB drive and ejected from the personal computer, the drive is free from all malware or viruses that will affect that particular computer. In addition to this, USBs are independent devices whose safety cannot be judged by a particular company or institution but rather by the person using it.

Overall, Cold Wallets are preferred over Hot Wallets when it comes to finding the most secure way to storing your Shiba Inu Coins or other digital assets. You must be prepared to embark on an extensive study before setting them up. 

More importantly, it is important that beginners who are interested in holding cryptocurrencies learn about safe storage and the pros and cons of hot and cold wallets.

Read Also: How to Choose a Cryptocurrency Wallet

Other Security Precautions 

Backup

More often than not, you should always ensure that you have backed up your entire Shiba Inu Wallet. Since personal computers are not perfect, a breakdown of a system can affect your wallet. A history of regular backups is the primary way through which you can recover your cryptocurrency holdings. Wallet.dat files must be backed up and stored on compact discs (CDs), USB drives, as well as hard drives. 

Editor’s Note: Please remember to set strong passwords on all your backup files. 

Software Updates

Once you decide to hold a wallet, especially on a desktop computer, you must ensure your software is up-to-date. During the WannaCry hacking incident, hackers took advantage of a flaw in the Microsoft Windows operating system. The millions of people whose computers were affected by the RansomWare virus were using outdated Windows. If you have updated software, you will not be a victim of any hack attacks in the short or long term.  

Moreover, the latest versions of software wallets have awesome security systems embedded in them which increase the safety of your Shiba Inu coins. Do not settle for cheap things. If you can, buy anti-virus packages that can secure all the data on your computer. 

Multi-Signature Authentication

This concept has gained popularity thanks to software developers learning from numerous hacking incidences. One of the areas of multi-signature you should always look at is two-factor authentication (2FA). This is an electronic authentication method in which a person is granted access to an application or website only after they have successfully presented at least two pieces of evidence to an authentication mechanism: inherence, possession, and knowledge. A practical way of looking at this is by entering a password created by you, and after that arranging a passcode (private keys) in a particular order that was presented to you during the account creation process.

This extra layer of security protects your account from hacks and keeps all your cryptocurrency holdings including SHIB safe. 

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eToro have proven themselves trustworthy within the crypto industry over many years – we recommend you try them out.

Virtual currencies are highly volatile. Your capital is at risk.

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