When it comes to bitcoin, safe and secure storage stands atop the list of priorities. As bitcoin owners, there’s nothing more important than protecting your bitcoin wallet—the question is: how does one do that? What makes it safe and secure?
First of all, you have to make sure that you’re using the right kind of wallet. If you’re holding a significant amount of bitcoin, it might be worth investing in a hardware wallet. Though it can set you back up to $200, it’s regarded to be the most secure option. It’s a small physical device that looks like a USB flash drive with an LED screen and buttons to navigate through the interface. With the ability to store your crypto offline yet transact online, it’s no wonder these are considered to be the pinnacle of cryptocurrency storage.
For those that prefer other kinds of wallets or those that are looking to make their existing ones even more secure, there are multiple ways to do so:
Encrypt Your Wallet
Start with the most basic form of security—a strong password. For people wanting to gain access to your account, this is usually the first line of defense. Make sure that your account has a strong password—use numbers, capital letters, special characters, or whatever will make your password harder to guess. Make sure that your password is something only you would know, whether that be lyrics to your favorite song, an essential detail in a story, or anything that might be deeply personal to you.
Of course, with that being said, make sure that you remember your password. Write it on a piece of paper and hide it—do whatever you can to remember it. Your password is the key to your bitcoin, so it would be a shame if you lost it (especially if you’re holding a lot of bitcoin).
Two-Factor Authentication (2FA)
If your strong password is the first line of defense, two-factor authentication (2FA) is the last line of defense as it adds an extra layer of security to your bitcoin wallet. Even if someone were to obtain or guess your password, they wouldn’t be able to do anything with your bitcoin unless they have the codes for 2FA. Google Authenticator or biometrics are good options for 2FA.
It’s important to note that not all have the 2FA feature, so it is recommended that you find one that has it.
Update Your Software
Just like with your iPhone or laptop, you must update the bitcoin wallet software regularly as it will allow you to receive crucial stability and security fixes. Not only that, updates can sometimes contain new features that will further secure your account.
Back Your Wallet Up
Some wallets will allow you to back up data and even encrypt it. If you have any of these features, it is highly recommended that you use them regularly. Along with that, make sure that your backups aren’t tied to a single location—back it up on multiple devices in different places, along with varying types of media (such as USB keys, papers, and CDs).
Make Use of Multisigs
The multisignature feature is one that many bitcoin wallets have. Essentially, this feature creates a requirement for the approval of multiple parties before a transaction can be spent. For example, more prominent organizations can make use of this. They can give everyone access to the treasury, however, only allowing a withdrawal if a certain number of people sign the transaction.
By enabling this feature, people who have gained unwanted access will still require the signatures of other parties before making any transactions.
Offline Transaction Signing
When trading, Internet connectivity is an extremely crucial aspect. However, there is a way to trade in which you remain half online and half offline—and this process is called offline transaction signing. This method of trading makes use of two computers: one that remains offline (which holds the entire wallet and signs off on transactions), and one that is connected to the network (one that creates unsigned transactions).
In this process, you’d create transactions on the computer that’s connected to the network, save them on a USB, sign them on the offline computer, then send the signed transactions on the connected computer.
Although it adds several steps to the bitcoin trading process, it ensures that your funds remain mostly offline—away from all harmful threats.
Control Over Your Security
Despite hardware wallets being arguably the most secure option, there are several options out there that can hold their ground. For example, Paxful’s Bitcoin Wallet is one of the most reliable digital wallets around—perfect for new and consistently active traders. With up-to-date conversion rates and tracking features, users can check their balance and view the value of their bitcoin in any currency, anywhere, and anytime. It is tried and tested with over 40,000 BTC transacted and over 3 million wallets created. It’s designed to be safe, functional, and easy to navigate—and the best part is that it’s FREE upon account creation.
When it comes to security, you are always going to be the deciding factor. In the bitcoin industry (or any industry for that matter), knowledge is power. The more you know, the more you minimize the risk of being scammed or hacked. With hackers and scammers getting smarter and more technologically intelligent, you must try your best to stay smarter. Stay alert and always be aware.