Knowing how to buy or sell the Bitcoin is not enough; to be a savvy crypto investor, you must also know ways to store the Bitcoin safely. While Bitcoin prices may have skyrocketed in recent years, the number of hacking incidents has not gone down. This is because there are an overwhelming number of new investors who are not well-informed about securing their funds. The emergence of sophisticated technologies also make it easier for hackers to keep finding out new and ingenious ways to steal your money. So, how you be sure your Bitcoins are safe?
Safest Ways To Store Your Bitcoins:
Similar to keeping money and credit cards in a wallet, you can download a digital wallet for storing your Bitcoins securely. This digital wallet may be software or hardware-based and can be installed on a desktop or laptop; alternately, you can secure it by printing your private keys on paper. Without these keys the owner can never access his coins. But the obvious downside to this is if the keys get misplaced or stolen, the owner loses his funds. Likewise, if the computer malfunctions or gets hacked, you may end up losing your money. Here are some of the best ways to keep your money protected against hackers and cyber criminals:
- Online wallets/hot wallets are connected via the Internet to devices like smartphones, tablets, and computers. These are not completely secure because they have private keys that can be hacked. These may be super convenient since you can access your funds at any time and make speedy transactions but their security remains questionable. So, if you have downloaded such wallets which do not implement stringent security protocols, you can be at risk of losing your money. This type is a good choice for holding cryptos in small amounts. Hot wallets can be web, desktop, mobile, and exchange custody wallets. The last type is offered by exchanges like Coinbase where the private key is retained by the exchange, not the user.
- Cold wallets/hardware wallets/offline wallets are considered to be safer than hot wallets as these are not linked to the Internet. So, the risks of getting intercepted are far lower. They will store private keys and user addresses on a device which is not web-connected. These wallets offer software that let you view your portfolios without risking your private keys. Hardware wallets are usually USB devices storing private keys; these are preferred to hot wallets since they cannot be impacted by computer viruses. The private keys never come into contact with web-connected computers.
- Paper wallets are the most secure way to store crypto coins offline; these function like cold wallets and can be generated in specific websites. They will offer you both private and public keys that you can print on paper. Many crypto holders laminate these paper wallets before storing them safely in their homes.
- Physical coins: Some services are allowing investors to buy cryptos physically; these coins will be secured with a tamper-proof sticker showing a preset amount of Bitcoin. However, to buy these, you may have to pay slightly more than Bitcoin value to cover the manufacturing and shipment costs.
Backing up the wallet is a good way to keep your Bitcoins secure. You should ensure that the software is routinely updated; else, it becomes an easy target for hackers. Multi-signature refers to approval from many people for any transaction to go through. This is an effective safeguard against thefts because transactions cannot be conducted unilaterally.