Bitcoin has received an overwhelming amount of attention throughout the past few years. According to Statista.com, in Q2 2018 there were 25,764,015 blockchain wallet holders.
The mass amounts of attention that the digital currency has received from both the public and the media has no doubt assisted in the growth of its use, but it has also tempted a lot of bad actors to sneak into the industry; bringing with them plans of hacks, breaches, and thefts.
Although Bitcoin wallets offer reasonable protection, as with any assets it is still best to take some extra security precautions yourself.
In 2017, millions worth of BTC were stolen by hackers using victims’ phone numbers alone to complete their crime, that’s just one example of the many cases that have occurred. This is not to say that you shouldn’t risk owning Bitcoin or other cryptocurrencies, but that you can put a little effort into protecting your assets yourself and reduce your chances of being a victim of Bitcoin theft.
Here are a few tips to get you started on protecting your digital assets:
This may seem like an obvious one, but without good password strength, you’ve got a much higher chance of your wallet being hacked.
- A strong password should contain letters, numbers, and symbols
- Be at least 16 characters long
- Written on paper and kept with important documents, not stored on a digital device.
- Not the same as your passwords for other things
Keep your devices safe
Extra precaution should be taken to keep any devices that contain digital wallets safe. Unsecured Wi-Fi networks and websites could put your assets at risk. It’s also best not to let anybody borrow these items.
This is basically just a double identity authentication check. If the wallet allows for this it can provide much more extra security. 2FA options available include, biometric identification such as fingerprint, or there are apps such as Google authenticator which uses a unique-to-you 6-digit code adjusts every minute.
Backup your wallet
If you back-up your wallets then recovery will be possible if your wallet is lost, depraved or crashed; your assets will be protected from system failures. You should back-up the entire wallet, including its private keys. For extra security, you could encrypt the back-up using an encryption tool.
Certain wallets have multi-signature options. This would mean multiple people owning a shared wallet, you could do this using a family member, business partner, or even just another device you own yourself. A multi-signature setting would require the signature of everybody who has authority over the wallet before your transaction is executed; this means that even if access to your private key is wrongfully obtained, no Bitcoin can be stolen without the other keys required. Right now, not every wallet offers multi-signature options, but there are a few that do, the popular Coinbase is one of them.
Hardware or paper wallets
Paper wallets are definitely a cheap and convenient way to store large amounts of Bitcoin for long periods; a paper wallet cannot be attacked.
Hardware wallets offer high security for your Bitcoin, unlike other digital devices such as your PC, it isn’t always connected to the internet and a hacker wouldn’t be able to access your wallet that requires physical access.
If you are planning on holding large amounts of Bitcoin, it’s a good idea to have a way for your next-of-kin or a family member to access your Bitcoin if something were to happen to you.
When it comes to exchanging Bitcoin for other cryptocurrencies or cashing out in fiat, it’s important to be cautious and stick to the rules. If you’re using a platform such as LocalBitcoins, it’s best to meet in person in a public place when possible, but if this isn’t convenient for you and you make the exchange online, DO NOT RELEASE YOUR ASSETS FROM ESCROW UNTIL YOU RECEIVE YOUR FUNDS. If your assets are released from escrow, you will have no way of getting them back if the person you are exchanging with doesn’t meet their end of the deal.
Owning Bitcoin isn’t the Wild West experience it once was, but that doesn’t mean there’s no need to protect your assets.
Disclaimer: This is not an investment advice. It is of paramount importance that everyone should do his or her own due diligence before investing in any product, platform, tokens etc. Cryptocentral.io does not endorse any content or product published on this page. Our aim is to simply provide all the readers with the latest information in the field of cryptocurrency / blockchain industry that might be of interest to our readers.