In this digital age, cybersecurity has become a very scarce commodity. It’s not uncommon to hear news about major cyber crimes, digital identity frauds, and hacking. And as the frequency of cyber attacks increases, digital users demand more improved cybersecurity.
Blockchain, the concept behind Bitcoin and other cryptocurrencies, offers a very promising solution to this perennial concern. Through blockchain, hacking, tampering and stealing digital records have become practically impossible. This is because data are recorded into a decentralized ledger that forms the chain.
Although blockchain is an inherently secured and tamper-proof technology, it doesn’t provide a fully secured platform for Bitcoin and cryptocurrency investors. It may sound surprising but digital wallets are not free from potential security threats. According to an experienced bitcoin accountant, many Bitcoin investors are still unaware of these potential security risks.
So, how do you keep your Bitcoin secure? Here are some methods to help you secure bitcoin.
The term “cold storage” refers to any offline mode of securing bitcoin. Offline digital wallets are less susceptible to cyber threats since they are not connected to the Internet. However, the problem with cold storage is that accessing it can be a hassle. Cold storage is recommended for keeping a small amount of bitcoin while retaining a certain amount dedicated for daily trading online. Commonly used cold storage methods include sound wallets, paper wallet, hardware wallets, and storage devices (such as USB drive).
Regularly back up your bitcoin wallet to ensure that all recent address changes and additions are included in your backup. However, there are some bitcoin wallets that only require one-time backup.
Use different storage locations
Using different methods to store your bitcoins can be a bit of a hassle, but it’s a necessary step in securing your bitcoin. Storing your bitcoins as well as your backup in a single location is very risky. In case your bitcoin storage gets hacked or deleted and you only have one storage location, you won’t have a way to recover your wallet. As mentioned above, you should use CDs, papers and USB devices for storing bitcoin.
Make sure that you use up-to-date software. Running your bitcoin software on non-updated software makes it an easy target for cybercriminals. The latest versions of wallet software comes with better security infrastructure, protocols and fixes thus making your wallet more secure against cyber threats. The same is true when using mobile devices. Make sure the operating systems and software are always updated.
Encrypting folders, files and messages provides an additional layer of security. To access encrypted bitcoin wallet, one needs to have the right password. This is especially important for crypto traders who use mobile, desktop or hardware wallet.
Alongside encryption, you also need to use a strong password that combines alphanumeric and special characters. It is recommended that you use at least 16-character long password or use a password generator. Using weak and easy to break passwords renders encryption inutile against rogue attacks. Keeping your password safe is also very important. You can either memorize your password or write it down on paper and store it in a secured, safe spot (such as vault or any locked compartment). Take note that bitcoin password recovery options are limited so memorizing it is essential.
Perhaps one of the surest ways to secure your bitcoin is by using multi-signature approval. In this method, you need to assign more than one person to complete the authentication process of a transaction. Usually, 3 to 5 people are required to authorize a transaction before it is carried out (such as withdrawing or sending bitcoins). These signatories are assigned during the initial setup of the account. Since there are multiple signatures needed, the threat of unauthorized access is almost impossible. Cryptoncy lists some of the most popular bitcoin wallets crypto traders can use.
Cyberthreats are the bane of the digital age. Hacking, fraud, identity theft, phishing and other cyber hacks have become commonplace and these crooks are also targeting bitcoin. And as bitcoins gain wide attention and acceptance, we can expect cyber threats to grow even more. However, by implementing these simple measures, you can greatly increase your bitcoin security and avoid unwanted headaches later on.
Author bio: Agnieszka Podemska is an SEO specialist and content strategist at MiroMind SEO & Digital Agency. Avid blog reader and tech enthusiast, she likes to share her insights with others.