Bitcoin has had quite the year already, but one problem that a lot of investors find once they purchased Bitcoins is how they will keep them safe and secure.
One main concern with Bitcoin is that it is unregulated. Another is security. Cryptocurrencies are often the victims of hackers, and in some instances, this has resulted in both investors losing millions of dollars, and exchanges getting shut down. There are ways that you can help to keep your Bitcoins safe, with the most obvious being, to put your digital money into a wallet.
Bitcoin wallets are simply digital wallets, with two keys – one public and one private. A public key is an address which is needed when one wants to send Bitcoins to you, and a private key is an address which is necessary in order for you to spend Bitcoins much like a username and password.
Sumanth Neppalli, who is a cryptocurrency and blockchain expert, says;
When you trade on exchanges your private key remains with the exchange, so they can even spend your Bitcoins. Wallets give you the ownership and allows you to control your private keys.”
There are a number of different wallets on offer to those with Bitcoin investments; hardware wallets, is a type of wallet that stores your private keys in a hardware device. They are great if you want to store your keys away from the internet. One expert says;
Hardware wallets or paper wallets are wallets where you can hold your private keys. But if wallet keys get stolen or lost, you may lose your Bitcoins. It is good for people who lack technical knowledge.”
Cold wallets also operate offline, requiring no internet access, which also makes them safe from hackers. You should store large amounts of money in cold wallets to keep it secure. One expert has some valuable advice;
Users are advised to not share all of their Bitcoins in the same wallet and instead, use multiple cold wallets. At the same time, remembering the key to the wallet is paramount, since that is the only access point to the wallet. For the same reason, it is essential for users to backup and encrypt their wallet.”
Encrypting your wallet ensures that your private keys are not revealed, which would compromise your Bitcoins.
Another expert has extra security tips. He says;
Investors should check the reputation and the number of download of wallet service provider before making a buying decision from any particular wallet service provider. A reliable wallet service provider bases the whole procedure of buying and trading of cryptocurrency on the blockchain, a distributed public ledger.”