Knowing how to trade and when to transact is only half the battle. Learn how to secure the money you have with these simple tips.
The market for bitcoin and cryptocurrencies have definitely evolved over the last few years. During the dawn of bitcoin, it wasn’t unheard of for a bitcoin holder to have one bitcoin wallet, in which an amount of bitcoin would sit, untouched, for months or years at a time.
While this may have been a moderately worthwhile investment tool initially, bitcoin takes quite a bit more effort these days. Both to secure and to use correctly. Most people, especially newer users or seasoned traders, are happy to engage the services of a bitcoin trading platform as a bitcoin wallet. Allowing them to easily stow their riches behind the secure walls that the companies themselves provide.
These trading platforms also make it easier to move between currencies- like fiat and crypto, and back again. There’s also added perks like access to sound trading advice, 24/7 up to date price trackers and exchange information, as well as live assistance and added security features.
However, if you feel like you’re ready to spread those wings and branch out on your own- there are some very important measures you need to take to properly secure your bitcoin wallet.
Protect Your Bitcoin Wallet – Online/Offline Wallets
Anyone who is savvy with bitcoin knows that they need, at minimum two different types of wallets: an online wallet and an offline wallet.
Online wallets are connected to the internet at all times. These can also be referred to as “hot wallets”. Your online wallet should be used only to store the bitcoin that you actively plan on trading or transacting. Never keep too much money in an online wallet. The general rule of thumb is that one should always be prepared to lose any money they keep in an online wallet. Whether that be to trading, purchases, or hackers.
Offline wallets work as a cold storage device for your bitcoin. These wallets are in no way connected to the internet and can only be used to transfer coin into an online wallet. These wallets are ideal for stowing excess bitcoin far from the prying eyes of hackers and other agencies that could be interested in what you have stored away.
Protect Your Bitcoin Wallet – Encrypt
While encryption isn’t the easiest, quickest, or the most user-friendly way to secure your wallet and its contents, it’s absolutely necessary. Encryption is, at its most basic function, the act of having a ridiculously long and impossibly difficult to remember password.
This means that at minimum, your password should consist of at least 16 characters. These characters should include capitals, lower case, punctuation marks, numbers… and pretty much any other random symbol your keyboard is capable of coming up with.
The problems with this type of encryption are that it does not actually fool proof, and if you forget that password, you’re unlikely to ever see those coins again. So when you do encrypt, it’s important to regularly check your computer or accessing device for any keystroke logging malware, and definitely write that bad boy down.
Protect Your Bitcoin Wallet – Backup
Backing up your entire wallet isn’t as arduous as it sounds, and is a sure-fire way to protect against various circumstances in which you could lose or break the device it’s stored on. Backups are particularly important with cold storage or offline wallets.
Where should you back up this wallet, you ask? Well, the question should actually be asked in the plural. You should always create a few different backups for any wallet you have, this way you’ve got a plan C in place, should you lose your original backup.
USBs, CDs, hard drives, paper copies of key codes, external hard drives… essentially anywhere you can back up a wallet, you should. Make sure to keep these backups safe from damage or theft. Remember that pretty much anything that is, or can be, connected to the internet is fairly susceptible to hacking and theft, so always encrypt your backups as well.
Protect Your Bitcoin Wallet – Update
Update regularly and often. Keeping your bitcoin software, whether its with your wallet, your anti-virus programs, or your trading platform system, always make sure that any associated software is up to date. This also includes downloading the latest versions of apps and operating systems if you’re using a wallet on your devices, like tablets and phones.
Having up to date software is just an added layer of protection and security for your coins. Often, software updates are designed to provide the latest patches to deter the newest viruses, malware, and hacking vulnerabilities and exploits.