Less than a decade after its introduction, bitcoin has garnered significant attention and popularity. As of Dec. 7, 2017, there were nearly 16.7 million bitcoins available for use with a market capitalization over $260 billion. More than 300,000 transactions a day happen in bitcoin. Yet, as the estimation of bitcoin builds, so does the danger of robbery or hacks. Since the cryptocurrency does not exist in any physical shape and isn’t regulated or stored by any government authority, it is wise to ponder on questions on how to protect bitcoins and keep them safe and secure.
Simply how we keep cash or cards in a physical wallet, bitcoins are likewise put away in a digital wallet. The wallet can be hardware based or online.
The wallet can likewise dwell on a cell phone, on a PC, or kept secure by printing the private keys and addresses on paper, known as a paper wallet.
But how reliable are any of these digital wallets? The response to this relies on how the user manages the wallet. Each wallet contains an arrangement of private keys without which the bitcoin owner can’t access the money. The greatest threat to bitcoin security is the individual client maybe losing the private key or having the private key stolen.
Without the password, the client will never have access to their bitcoins again. Other than losing the password, users can likewise lose their bitcoin as a result of glitches, by hacking, or by physically losing a computer where the digital wallet dwells.
Here are ways which you can keep your bitcoins and cryptocurrencies safe:
The offline method of securing bitcoins is called cold storage. Cold storage wallets are not associated with the Internet and are along these lines less vulnerable to hacking. Since getting a cold storage wallet can be inconvenient, it’s best to split your bitcoins. Keep some bitcoins in an online wallet for daily transactions requirements and keep the rest in cold storage.
Backup your whole bitcoin wallet early and regularly. Should you encounter a computer malfunction or virus, a history of regular backups might be the best way to regain the currency in the digital wallet. Make a point to back-up all the wallet.dat records and after that store the backups at various secure areas, such as USB, external hard drive, and the likes. Not just this, set a secure secret key on the backup.
Keep your software updated. A wallet running on outdated bitcoin software can be easy prey for hackers. The most recent variant of wallet software will have a superior security framework set up in this manner expanding the safety of your bitcoins. If your program is updated with the most recent security fixes and protocol, you may bypass a major crisis because of the upgraded security of the wallet.
Encryption adds a layer of security to a specific file, document, or message as it must be opened by somebody who knows the correct key to it. In this manner encryption inherently implies using a password to access the Bitcoin wallet. In situations where a desktop, mobile, or hardware wallet is used, encryption is even more essential to shield from online rogues.
The idea of a multi-signature has become quite popular; it includes approval from various individuals (say 3 to 5) for a transaction to occur. Therefore, this restricts the risk of theft as a single controller or server can’t perform the transactions.