One of the most distinctive features of Bitcoin is that it can make payments all around the world more convenient. However, this perk comes at its own cost – the risk associated with the crypto.
Security is one of the major concerns in every investment. In the case of bitcoins too, security is one of the key concerns of the investors. There are a lot of ways through which anyone can steal your money, track it, or violate your privacy.
However, we have identified some simple measures which can ensure the safety of your cryptocurrencies and also keep your data more secure and private. Following are five tips we have gathered for you:
1. Divide Your Bitcoins into Wallets
One major way your bitcoin becomes susceptible to attacks and subsequent loss are if you hold all the BTC you own in a single wallet. If a hacker gets inside that single wallet, all your savings might be stolen! Learn more about secure bitcoin trading on Bitcoin Digital Robot.
Fortunately, a person can own as many digital wallets for storing and categorizing their crypto as they want to. There is no limit upon that. Henceforth, similar to how you can categorize your monetary savings in a bank account under the categories of a savings account and a current account, similarly different wallets can be categorized for different purposes that you will be utilizing your bitcoins for.
2. Avoid Storing Your Crypto on Web Wallets
In recent times, several cases have been reported around the world of web wallets being hacked online. Some of these users have lost a part of their crypto savings, while others have even lost the whole of it.
Although web wallets have been considered to be a convenient and relatively easier source of storing crypto, it is generally recommended by experts that these web wallets should be used only to store crypto for a short time – i.e. for current uses. Accordingly, if only a small quantity of crypto is stored in the wallet, the losses will be limited in case the web wallet gets hacked.
It is vital to keep in mind that BTC does not operate similar to a credit card. Due to the absence of a regulatory authority in this case, if the crypto is lost fraudulently, it cannot be redeemed. The event can be reported to the authorities like the police, or cyber-crime, but chances are you won’t be able to reclaim the lost crypto.
3. Guard Your Privacy
A very important thing to remember once you have purchased crypto, is to protect your private keys and not share it with anyone.
Besides the aspect of illegal activities, there is another very significant reason behind this purpose, as revealing your credentials will enable the other person to get access to your sensitive information such as the amount of bitcoins you have and transaction history. This is sensitive information which should be kept private. Would you disclose your financial credentials to someone you don’t know?
One of the most effective methods of obscuring the relationship between your wallets is by moving your funds in between them through a mixing service.
4. Cold Storage
Despite storing your BTC in a wallet which is on a computer system, your crypto can still be attacked. Digital applications such as the crypto wallets are also susceptible to hackers’ attacks.
Several holders of bitcoins and users of such applications have reported such attacks. One of the solutions is to have an additional layer of security and protection, e.g. storing the private key of your crypto wallet in an offline medium. This offline medium can be anything ranging from just a paper in a notebook to a text file stored in a portable device.
Upon the need to move the bitcoins from an offline wallet to another destination, firstly, you will be required to input the private key of your wallet or scan the QR code into an application yourself. Upon the confirmation of your BTC balance, you can transfer any desired amount to the recipient’s wallet address.
5. Do Not Forget to Backup Keys
All the recommendations and advice discussed above have mainly emphasized on how bitcoin holders can ensure safety and security of their bitcoin holdings from external threats. However, while discussing this point, emphasis will remain on the holders themselves.
If you have been using a computer system to store your bitcoin wallets, you should also make sure that these wallets are backed up somewhere else as well, given that it’s equally safe and secure as well.
Utilizing these features will allow the users to store their public and private keys which are in the wallet, inside a file. After the keys are stored inside a file, this file can further be stored inside any portable medium such as a USB, a flash drive or a hard drive etcetera.
These files can even be stored online on cloud-based backup networks such as Google Drive or Dropbox – services which offer robust data.
A Final Word
There is also a newer technology in the market, a form of a secure cold storage wallet known as the ‘brain wallet’. Basically, this is a discrete group of words and numbers which can be memorized by the user. After the paraphrase is typed down into a website like brainwallet, it will decipher it so you can find your private key.
These are some of the ways we have identified and provided you with, in order to increase your knowledge on how to keep your bitcoins more organized and safe. Do not forget to research about this matter yourself as well in order to keep your crypto as safe and secure as you can.