WALLETS & SECURITY

Best Practices to Safely and Securely use your Crypto wallet

By now hopefully you have chosen the Cryptocurrency wallet/s that is right for your investing goals. It’s now time to learn how to safely & securely use that crypto wallet.

For those of you that haven’t selected a Crypto wallet to go with, check out our “Which Cryptocurrency Wallet is right for you?” lesson here.

Safe Transfers, Deposits, and Withdrawals

When most people think about security in crypto, they imagine hackers breaking into wallets or exchanges. But in practice, one of the riskiest parts of the entire process is something much more ordinary: moving your funds. Transfers, deposits, and withdrawals are the moments where the majority of costly mistakes occur. The blockchain does not forgive human error, so understanding how to execute these steps with precision is essential.

Choosing the Right Blockchain

The first layer of risk comes from sending assets across the wrong blockchain. Many cryptocurrencies exist in multiple formats: USDT alone can be issued on Ethereum (ERC-20), Tron (TRC-20), Binance Smart Chain (BEP-20), and others. If you attempt to withdraw to a wallet that doesn’t support the network you selected, those funds may be permanently lost. Before every transfer, confirm that both the sending and receiving platforms support the same network. If you are unsure, always default to the most widely supported version of the token (for example, ERC-20 for Ethereum-based assets) or consult the official documentation of your wallet or exchange.

Verifying Wallet Addresses

Unlike a bank account number, a blockchain address cannot be “looked up” or corrected after the fact. Copy-and-paste errors, shortened addresses, or even potential malware that automatically swaps your copied address for the attacker’s address are real threats.

The solution is simple but requires discipline: always copy and paste the entire string, double-check the first and last few characters of the address, and confirm it matches your intended destination. For large transfers, test with a small transaction first before committing the full amount.

Double-Checking Transaction Details

It’s not just addresses that matter. Transaction fees, token amounts, and even memo tags can determine whether your funds arrive safely. Some cryptocurrencies such as XRP, XLM, or ATOM require a destination tag or memo in addition to the address. Forgetting this step can result in your funds being stuck or delayed indefinitely. Exchanges typically display reminders for these assets, but never rely solely on prompts. Make it a habit to review every field carefully before clicking confirm.

Transaction Hashes and Confirmations

Every transaction on the blockchain generates a unique transaction hash (TXID), which serves as its permanent receipt. Once you initiate a transfer, save the TXID and use it to track progress on a block explorer. This step confirms that your transaction is not only sent, but also verified by the network. Block explorers show the number of confirmations, which provides assurance that the transfer has been permanently settled and cannot be reversed by a chain reorganization. If you ever need to troubleshoot with an exchange, the TXID is the first piece of information support will request.

Timing and Network Congestion

During periods of high network congestion, transaction fees can spike, and confirmation times may slow dramatically. If you attempt to move funds without adjusting for this, your transaction could be delayed for hours or even days. As an optional step, check current network fees using tools like Etherscan’s gas tracker or similar dashboards before sending, and consider adjusting your fee level if you need faster settlement.

Deposits and Withdrawals on Exchanges

When depositing funds into an exchange, always verify that the exchange supports the token and network you are using. Sending unsupported tokens to an exchange wallet is one of the fastest ways to lose funds permanently. Likewise, when withdrawing from an exchange to self-custody, check whether the withdrawal network aligns with your receiving wallet. Many traders default to cheaper chains (like TRC-20 for USDT), but saving a few dollars in fees is meaningless if it introduces compatibility issues later.

Disconnecting Wallet from 3rd party DeFi applications (Warm Wallet Exclusive)

When connecting your warm wallet to a 3rd party application (such as Pancake Swap, Raydium, etc), be sure to always disconnect your wallet at the end of your session. Leaving an open line of connection can open your wallet up to being compromised or even hacked if not securely disconnected. All you need to do at the end of each session is click the same button as you did at the beginning to connect your wallet, this time being labelled ‘disconnect wallet’. Alternatively, you may find this button in the ‘settings’ category of your wallet.

Safe Storage your Hardware wallet (Cold Wallet Exclusive)

Choosing to use a cold wallet to hold large amounts of funds is an excellent idea for self-custody & digital security, however comes with its own unique risk of physical damage/theft. Essentially all your invested funds will literally be in the palm of your hand. That means if you accidentally drop it in the lake, run over it with your car, even spill your morning coffee on it… there goes your funds (unless you’ve written down your 12-24 word seed phrase to access your cold wallet on another device). We recommend storing your cold wallet somewhere secure, away from your daily visited locations. Consider storing it next to your passport or even better, your household safe that only you have access to.

Golden Rule to Safely & Securely use your Crypto wallet.

The golden rule with all transfers, deposits, and withdrawals is to slow down. Most losses occur because people are in a rush; rushing to buy a dip, rushing to move funds before a trade, or rushing under pressure from FOMO. Instead, take a breath and verify everything two or three times before hitting confirm. Precision is the only safety net in crypto.

Now that you know everything about how to safely & securely use your crypto wallet, it’s time to move on to our next lesson topic, “How to Avoid Crypto Scams”.