By Gabriel Negrín
When talking about money, the first thing that comes to mind is security. We will always have that hidden voice inside of us wondering if our money is safe.
With cryptocurrencies, this concern is even higher. Yet, many newcomers are unaware of one of the biggest risks:
Repeatedly using the same crypto wallet address.
What Is A Wallet?
If you are new to crypto, you need to know what a wallet is. A wallet allows you to store, transfer or receive your digital assets from your computer or mobile device. Wallets work with unique addresses — no two are alike.
The wallet address changes depending on the type of cryptocurrency you receive. These addresses are formed by an alphanumeric system. That is, they are a cryptographic combination of numbers and letters.
In case you are wondering what wallet works best for you, we have an article about it. There are many things to keep in mind, and you’ll find what you need to know here: finding your “crypto wallet” rhythm.
What Is A Crypto Address?
These addresses are pseudonymous, not anonymous. That is, while all the information in the blockchain is public, no one can associate your wallet with your real identity unless you share it.
In simpler words: These addresses are what you need to receive and send cryptocurrencies.
The number of addresses available to you are unlimited. The user can create as many addresses as he or she wants. No one needs permission from any external agent to have a new address. And as if that were not enough, creating a new address is completely free.
Reusing Addresses: Biggest Newbie Mistake?
This feature is massive to protect your privacy. Many experts recommend that you not reuse the same address. But, why? Well, even if the blockchain provides great security to the user, it also provides transparency in transactions.
This can only mean one thing: other users can see your balance and the transactions you’ve made. Remember that many cryptocurrency systems are pseudonymous, not anonymous. So, if someone knows what your address is, they definitely know how much money you have.
Some users tend to reuse their addresses as a way to save money on fees. Many of them have full confidence in the addresses they have already used. Some because they are simply unaware of the risk of reusing them.
How To Lose Your Privacy and Your Money
Reusing addresses compromises the security and privacy of everyone involved. And the consequences do not stop there. Even if your identity is not directly associated, other users can still see all your transactions. People can deduce how much money you have at your disposal.
And not only that, but they can also see if there is any pattern of behavior of your transactions. It is a simple way to say goodbye to your privacy.
And what’s even worse: you can expose yourself to dust attacks. And this is something that if you don’t know how to battle, you could lose all your hard-earned money.
How NOT To Lose Your Privacy and Your Money
But don’t worry, the solution is a piece of cake. It involves not having all of your eggs in one basket — i.e. having more than just one address. Every cryptocurrency system can generate a new one in a matter of seconds. Many wallets allow you to have multiple addresses and see your global balance.
Crypto can only be as safe as the precautions you take. So, be careful and remember, not your keys, not your coins.