Bitcoin safety is considered to be one of the most urgent and highly discussed topics within the Bitcoin community. Any Bitcoin owner should know how to keep the digital funds safe, similar to the way we keep our regular wallets protected from pickpockets and thieves. There are some tips/precautions that one can take in order not to lose Bitcoins.
1. Store only small amounts of Bitcoin in your wallet
Whether you keep your funds in a digital or a physical wallet, you should make sure that you do not have all your savings in one place. Our advice is to keep one or two Bitcoins on your mobile phone or computer for daily spendings and the rest of your digital funds in an another secure location, safe from the jaundiced eye (Read more in “Top 5 Bitcoin Wallets in 2014”).
2. Encrypt your BTC Wallet
A great number of online wallets allow their users to store the private Bitcoin key on the web. This storing method implies that your private key is controlled by a third party, significantly empowering those, who run the online wallet business. On the other hand, online wallets will give you to access your funds anytime anywhere as long as you have connection to the Internet. Some of the most reliable online wallets include Blockchain, Coinbase and Strongcoin.
Encrypting an online wallet implies setting a strong password (at least 16 characters) including capital letters, numbers, punctuation marks, etc. There are two shortcomings for password encryption that might stand in the user’s way — password hacking software and the difficulty of remembering the password itself.
Here are some techniques that will help you remember your password:
- Make a password that you would easily remember associating it with the things you like and simply memorise it.
- Write it down on a piece of paper and keep it in a safe place with your other valuable possessions.
3. Backup your wallet
Backing up your wallet is useful in case your computer crashes or your phone gets stollen. Restoring your coins with a backup is quite easy in case of such unfortunate events. It is crucial to back up your whole wallet, since the private keys are hidden and you will not be able to restore all your funds if you only backup your visible Bitcoin address. Make sure to update your backup after acquiring new coins. Also it makes sense to keep you backup on several devices in case the first gadget is lost (for example, USBs, CDs, hard drives, paper, etc).
4. Keep your Bitcoin software updated
If you do not timely update your Bitcoin software, your wallet can become subject to theft, hacking and fraud. Therefore, in order to ensure the highest level security and stability of your funds, keep all your software up-to-date.
5. Consider an offline wallet
Offline wallets, which are not connected to the Internet, are considered to be one of the best ways of protecting your savings. Remember that every device with access to the Internet, however well secured it may be, is susceptible to hacking. Currently companies provide a variety of cold storage possibilities. Wallets on a USB drive, paper wallets, vinyl wallets are among the most commonly used ones.
In order to ensure maximum safety of your digital currency, it is important to stay updated with the Bitcoin security technology that is developing rapidly. Similar to physical wealth, the safety of digital funds requires thorough and careful consideration. You have to decide how to keep your savings protected, either using encryption, backups, offline wallets, or all of the above.