There’s no doubt about how valuable Bitcoin is becoming, so if you own any of this cryptocurrency you would want to make its safekeeping your topmost priority. There are a number of things that you can do in order to store your bitcoin as securely as possible.
Here are some tips that I’ve come across in my time as a crypto follower, to help you do just that:
- Avoid Third Party Wallets: A lot of people use wallets that are available through websites when they are starting out. While this is perfectly alright to begin with, when the value of your wallet starts to get significantly high you would do well to store your Bitcoin on a private server. This is because of the fact that web wallets are run by third parties, which means that your money is only as secure as this third party’s own servers which you have no control over.
- Limit Wallet Access: This is particularly important for companies that use bitcoin. The great thing about bitcoin is that it’s anonymous, but this also means that you would never be able to track the identity of someone that stole from you after the fact. Hence, you should give access to only a handful of people that you trust so that if a theft occurs you can narrow down the possible perpetrators as quickly as possible.
- Have Two Wallets: Every experienced bitcoin investor knows that you need to have two wallets if you want your money as safe as possible. One wallet can be your online wallet, known as the “hot wallet” since it is more prone to attacks, and the other can be an offline wallet. Offline wallets should hold the bulk of your money and you should transfer money from your hot wallet to your cold one every day because an offline wallet can never be hacked.
- Keep Private Keys Safe: It is virtually impossible to hack into a bitcoin wallet without a private key, so it is highly recommended that you store your private key offline. Try to go as retro as possible with this, for example by hiding your private key on a piece of paper in your wallet. Just make sure that you don’t lose it otherwise you could end up losing access to all of your Bitcoin! Offline private key storage is a great way to ensure that you and only you are able to access your
- account at any given time.
- Be Cautious With Bitcoin in Public: If you have a Bitcoin ATM near you (see FindBitcoinATM), remember to only use the machine in daylight hours and always be sure that you never carry large amounts of money to the machine when buying your Bitcoin. It is much better to do your buying in smaller transactions. Never flaunt your hardware wallet or mobile wallet after you’ve bought your coins.
- Keep Using the Same Hardware: Your bitcoin can be transferred from your hot wallet to your cold one through the use of a USB. It is highly recommended that you use the same USB every single time. Dedicate it to Bitcoin transfer, don’t use it for anything else. This would ensure that no one can compromise your offline wallet through a Trojan or some kind of virus. It is highly recommended that you keep this USB on you at all times to be completely sure that no one would be able to tamper with it.
- Avoid Windows and Mac OS: If you truly want your Bitcoin to stay as safe as possible, you need to get Linux. This is because of the fact that Linux is the safest OS out there when it comes to things like preventing viruses from gaining access to your files through a USB. Linux is just another layer of defense that you can add to your wallet, and you should install it in both of your wallet sites. Linux is also a very good OS, so you have the added benefit of a higher quality user experience as well!
- Keep Several Backups: Having a hot wallet and a cold wallet is a good step to take towards making your money as secure as possible, but you also need to have backups. Even if you have the bulk of your bitcoin stored in your cold wallet, computers and servers can be physically stolen and if this ever happens you’d lose pretty much all of your money. Hence, you need to keep a backup that you update on a regular basis that is stored elsewhere, far from where you live or work. Don’t tell anyone about this backup, and try to make multiple backups just in case the worst happens.
- Fragment Your Backups: This involves splitting the key into multiple parts. If someone wants to steal all of your Bitcoin, they will have a much more difficult time of it if the key exists in multiple locations. If you want to access your wallet from a backup site you will need four out of the six pieces at the very least, and it is going to be very difficult for all but the most skilled of hackers to get even half the way there. You can couple this with the multiple offsite backups in the previous tip to really make your wallet as safe as possible.
- Try Out a Physical Wallet: This would allow you to have your money on you all times. A hardware wallet is a USB of sorts that has a built in interface allowing you to check your Bitcoin whenever you choose to. If you ever want to make transactions, inserting the wallet into the USB slot of any computer would allow you to trade in any market you choose. A hardware wallet stores all of your security keys which can be a security threat but you can use fragmented backups to ensure that if your wallet is ever stolen you can still regain access to your account.
After a few years of trading in Bitcoin you would be able to earn vast sums of money as long as you have an adequate understanding of how the market works. Hence, taking steps to prevent your hard earned money from being stolen is the least that you can do, because you don’t have banks or corporations that will be liable for your losses if someone breaks into your account and steals from you.
As always, if you have any questions, get in touch!