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Keeping Your Bitcoin Safe – How to Protect Your Bitcoin from Theft
There are always people who prefer the easy way in this world. Unfortunately, the Bitcoin community is not immune to this. You will encounter news about hacks, thefts, phishing, and all kinds of harmful activities involving Bitcoin. Plenty of users lose their cryptocurrency on a regular basis.
It’s important to be careful and make sure you secure your own Bitcoin so that you don’t take any risks. There are a bunch of small actions that can help you in this regard, and some bigger ones, too.
Below, we will try to teach you how to keep your Bitcoin safe. Please make sure you heed our advice because it could well save you a lot of money and hassle.
The Simple Things – Basic Bitcoin Protection
There is a set of simple rules that should probably apply to all kinds of security needs, and Bitcoin is not an exception. For a start, it’s a good idea to carefully pick the BTC wallet you are about to use.
There are plenty of options on the market. Some are legit services that will provide exactly what you need. Others may actually be fraudulent platforms that are trying to steal your money. Some simple research should be enough to find a trustworthy Bitcoin wallet, and we have some recommendations for you.
Another important factor would be to pick a long and complicated password that uses a combination of letters, numbers, and special symbols. Every Bitcoin wallet will recommend that you use such an approach. Your password should be tough to guess or decrypt, which is the main reason behind this measure.
Once you have a solid password, make sure that you don’t use it outside the wallet or share it with anyone. Your Bitcoin matters should be separate from everything else. For example, plenty of people tend to use the same password for their email and BTC wallet. Don’t make this mistake yourself.
Another important factor would be to use a strong antivirus protection on your computer. This is good advice for anyone, but it’s crucial if you’re keeping Bitcoin. Malicious software and viruses are probably the easiest ways to lose your money.
Finally, you should always be careful with the websites you visit, as well as the emails and links you open. There are plenty of scammers who use “phishing” techniques. They use fake domains that are similar to existing ones and might trick you into filling in your details. It’s a simple approach, but many people fall for it.
Avoid Using Online Wallets for Large Amounts
Many of the most popular Bitcoin wallets are entirely web-based. This means you don’t have to store your cryptocurrency on your computer, on a flash drive, or any other physical device.
These wallets have plenty of advantages and are easy to use. You simply log into your account, and that’s it. There’s no risk of a technical issue that might lead to a loss, which is another benefit of using web wallets for your BTC.
However, such solutions are more vulnerable than the alternatives.
There is a bigger risk of a breach or hack with online wallets than there is with physical devices. The general consensus is that you basically give up control over your Bitcoin for flexibility. There have been problems with this type of platform in the past. Some wallets have been hacked, and the customers lost all of their money.
This is why you should probably only use online wallets for your everyday needs. Don’t keep too much Bitcoin there, as there’s always a risk of losing it at some point.
Use Your Own Devices
The obvious alternative is to use a wallet that is stored on a device you own. It could be a computer, a USB drive, a mobile device, or anything else. This way, you have more control of the protection of your Bitcoin, but it comes at a cost.
The user interfaces are more complex, and there’s more responsibility on you. Each Bitcoin wallet will come with privacy keys, and losing them means you won’t be able to get your money ever again.
Forgetting or losing your key is NOT an option, as this will leave you with no way to recover your Bitcoin.
You will also have to secure your keys. If someone else has them, they can easily steal your crypto. This is why you should always be extra careful and protect the keys as best you can.
Cold Storage Offers Better Protection
One of the best ways to keep large amounts of Bitcoin safe is to pick the so-called “cold storage” option. This means that you will have your BTC on a physical device that has no connection to the internet. A good example would be a USB flash drive, but there are other options, such as paper wallets and sound wallets.
A typical device for Bitcoin cold storage.
The main advantage of the cold storage is that your wallet is not online. No one can connect to it and try to hack it that way. This is considered to be the safest way to keep your Bitcoin safe.
Obviously, it’s not very convenient when it comes to using your cryptocurrency, but this is why a combination of an online wallet that covers your short-term needs and a cold storage for the rest is probably the best idea.
Create Regular Backups
This is a must if you want to eliminate the risk of losing your Bitcoin for multiple frustrating reasons. For example, if the device you use crashes for some reason, a reliable backup might be the only way to recover your money.
Even if someone steals your computer, mobile device, or USB, you could always use a fresh backup to get your BTC back.
This is why you should create regular backups and store them properly.
Use multiple devices to keep your backups, so you don’t rely on only one place. You should aim for at least 2-3 secure locations.
It’s also a good idea to encrypt your backups, especially if you are keeping them online. If you do this properly, you will be safe even if someone manages to steal them. They won’t be able to directly access your key and steal your Bitcoin.
Update Your Software Regularly
This advice seems obvious, but a lot of people actually don’t follow it. As with any other software, the wallet you use will probably be updated every once in a while. This is done for multiple reasons, and one of them is to keep the Bitcoin wallet of each customer safe.
If you skip an update or two, it is possible that your money will be vulnerable.
The latest version of the software equals the best protection, so make sure to remember that and regularly update all of the programs related to your Bitcoin.
Add Extra Encryption to Your Wallet
Another important step would be to encrypt your wallet or add a password for anyone who tries withdrawing money. This adds an additional layer of security because you will be the only one who can do that.
Of course, you should follow all the basic rules for creating and keeping your password here, too. For a start, use a strong code of letters and numbers. Don’t go for anything obvious that people might be able to guess.
Ideally, you will memorize your password so that you don’t need a written record of it. If you insist on having it written down, at least keep it in a safe place and DO NOT share it with anyone else.
One of the best lines of defense would be to use a two-factor authentication. The whole system is rather simple. If you want to access your wallet, you need to have the keys and the password, and you must also verify through another device that you are the owner of the account. This is usually your mobile phone, but it can be any device at all.
Two-factor authentication is offered by many of the existing Bitcoin wallets on the market. Even if yours doesn’t have it as an option, you could always use additional software to protect your cash. Simply install, link your mobile device, and you’re good to go.
Another security measure that is highly effective is the multi-signature protection. Essentially, you can form a group with people you trust. The most common number is around 3 to 5. After you do that, you can set up the multi-signature protection.
As a result, if any member of the group decides to withdraw Bitcoin or send money to another wallet, the transaction must be verified by the other members.
This makes it EXTREMELY difficult for anyone to steal your money.
Even if a harmful person breaches your account and gets access to your Bitcoin, he would still somehow need to get the approval of the other members of your group. It’s not impossible, of course, but it’s a highly unlikely scenario.
This obviously makes accessing and using your Bitcoin a little less convenient. It’s worth it, though, for the added protection.
You probably don’t NEED to implement all of the measures outlined in this post to secure your Bitcoin. The basics are a good start, and if you add one more level of protection, you should be fine.
Of course, the more BTC you have, the more effort you should place in protecting it.
If you plan to keep a lot of money in a wallet, we recommend that you add at least a couple of safety nets so that you have no problems. And even if you only have small amounts, there’s still no major downside to taking these precautions.