As soon as you have bought some Electroneum, it is very important that you know how to store your ETN coins securely.
The cryptocurrency world is an unforgiving one. Whoever controls the private keys of a wallet controls the coins in that wallet. And if your private keys come in the hands of the wrong people, there is no one you can call to fix it.
So let’s discuss several options where you can store your coins:
1. Offline Paper Wallet (Very Secure)
Undoubtedly the best way to store your Electroneum coins is in an offline paper wallet. A paper wallet is a piece of paper or a PDF that contains the public and private keys that represent your coins in the blockchain.
Anyone can generate as many offline paper wallets as they like, and use it to store their fortunes as they see fit.
The safest way to generate a paper wallet is:
- Download the offline wallet generator to your computer.
- Disconnect entirely from the Internet before running the wallet generator.
- Complete the steps in the offline wallet generator.
- You’ll be prompted to save a PDF of the wallet. Save the PDF in a secure location.
- Print out the wallet immediately.
- Delete the PDF from your computer and empty the recycle bin.
- Transfer coins from the Electroneum app wallet, being sure to scan ONLY the public wallet address.
If done in this way, it is hard for any hacker to get a hold of your private keys.
Protecting Your Paper Wallet
You need to realize that, as soon as your ETN coins are on your paper wallet, you become solely responsible for the safety of your coins. You need to guard the offline paper wallet like you would guard a credit card or cash.
The safety of your coins now depends on the safety of the paper wallet. If someone gets a hold of the paper wallet and knows how to use it, you will have lost your coins. If the paper wallet is lost in a house fire or a flood, you won’t have any way to regain access to the wallet.
Best practice is to make two or three copies of the wallet which you keep in a secure storage space at different geographical locations (keep one at your house, one at your mother’s, and one at your grandma’s). Laminate each paper wallet to protect it from possible moisture (floods or water spills). In this way, if one paper wallet gets lost, you’ll still have the others.
Spread Your Investments
Another good practice is to spread your Electroneum fortunes evenly across various wallets – perhaps 4 would be good. Be sure to keep these in different locations. In this way, if one gets compromised, you’ll still have 3/4 of your investment.
Finally, be sure to use a brand new paper wallet as soon as you have transferred coins from the paper wallet, and wish to transfer them back. Once the private keys have been exposed to any computer connected to the Internet, they can no longer be regarded as safe.
2. Electroneum App Wallet (Moderate Security)
The app is extremely user-friendly to use but does pose some level of security threat.
Electroneum has worked with Hackerone to develop and test a very secure system that can stop most virtual attacks or hackers. Not only are you required to provide a unique email and password combination for every account, but the system also requires you to key in a code that is sent to a unique mobile number.
In addition, a PIN number further secures the account. The PIN number is required whenever logging in to the app wallet or whenever a transaction is submitted. This prevents someone from transacting on your app wallet behind your back when you have forgotten to log out from a public computer.
The app and online system also require the solving of Google captchas on every page, virtually eliminating any automated bots from trying to gain access by repeatedly trying login combinations.
The Risk Involved
However, you need to remember that the private keys to all the coins on the app wallet are kept in a database on the Electroneum’s servers. And with nearly 4 billion ETN coins stored on the system (at the time of writing), those servers are a honeypot that attracts hackers from everywhere.
Although the front end has been made very secure (as described above), a hacker might still be able to access the backend servers and possibly retrieve the private keys of many wallets.
I’m sure the Electroneum team has taken various precautions to secure these backend servers, possibly requiring multiple layers of authentication and passwords from various team members to access the account. But there is always the chance of an inside job circumventing the entire system.
Bottom line, the app is extremely user-friendly to use, but be aware of the risk of having the private keys to your coins stored in a centralized database.
3. Exchange like Cryptopia (Not Secure)
The last place where you can currently store your ETN is on an exchange like Cryptopia.
Similar to the app wallet, the private keys to all coins on the exchange are kept in a database on Cryptopia’s servers. The same vulnerabilities exist, with hackers trying everything to get into these mega ETN storage spaces.
I for one know that Cryptopia does not have nearly as much security as Electroneum on their front end. They do require unique email and password combination (and insist on choosing a secure password) and also require a PIN code whenever logging in or changing security settings.
Furthermore they require an email confirmation (by clicking the link in an email sent) to complete any withdrawal process.
But even if these requirements are enough, there is still a possibility of the backend servers and database being hacked, or an inside job circumventing the system.
I, therefore, do not advise storing your ETN coins on an exchange at all. Rather keep the coins in a paper wallet or the Electroneum app wallet and only transfer them to the exchange when you wish to trade with them.
The best recommendation would be to keep your ETN coins in an offline paper wallet. Follow the necessary steps to generate a safe offline paper wallet, and only transfer your coins to the app wallet or an exchange when you wish to transact or trade with them.
Know of any new ways to store Electroneum? Let me know in the comments…