How To Keep Your Bitcoin Safe

Bitcoin is big business. While there are other cryptocurrencies out there, none have come close to the value that Bitcoin has. This has made it the most popular crypto on the market today.

Which is good and bad at the same time. It is good if you are an investor because your investment is appreciating. It is not great because it has become increasingly difficult to mine. Data gathered by Btxchange shows that with the current power requirements for mining, the process is a lot less profitable than it was, and therefore fewer people are likely to participate in it.

Infographic: Plug in and feel the power of Crypto energy consumption

Another area that makes the appreciation in value problematic is that it makes the coins a valuable target for hackers. It doesn’t help that most of the wallets and exchanges are fairly good protected. In this post, we will look at how you can keep your coins safe.

Start With The Right Exchange

To start off with, choose a reputable exchange when buying and selling coins. You really only want to stick to the best exchanges here. You want an exchange that:
  • Is well-established: This is not a guarantee that your money is safe, but it will prevent you from being taken for a ride by a fly-by-night operation.
  • Doesn’t try to hide anything: Some exchanges are maddening when it comes to finding information on their sites. 
  • Is compliant: At the moment, there are few regulations that govern the crypto world. That, however, does not mean that it is always going to be this way. Choosing an exchange that is already complying with AML and KYC laws will help protect you in the long-term.
Take security seriously: exchanges are prime targets for hackers. This is something that Mt. Gox exchange learned to its detriment. It was hacked for $460 million and never recovered. Be sure that your chosen site has adequate protection in place.

Watch Your Wallet

There are various types of wallets out there. The safest is one that is stored offline on a machine with no access to the internet. There are also hardware wallets that are very secure.

In this case, the wallet is stored on a cryptographically secured device used specifically for that purpose.

If you are using a wallet that is installed on your computer or a mobile device, you need to ensure that it is secured and that you have backed up the information. If you lose access to the wallet, you lose access to your coins.

An alternative is a paper wallet. This is where your private key is printed out and you keep it on a piece of paper. It could be a good option for you if you are not planning to do much trading with the coins.
You do, however, want to make sure to keep it in a safe place. If you have a lot of coins, a locked, fireproof safe could be the safest option. Whatever you do, don’t lose that piece of paper.

Store Most Of Your Coins In Cold Storage

This refers to the practice of storing coins on a computer that is offline. This is where you want to keep the majority of your coins. Keeping your coins on any exchange is not particularly safe, so move over any coins that you are not using fast.

Consider A Multi-Party Signature

In this case, any transactions will have to be digitally signed by you and also by the other parties, or they will not be approved. This does help to ramp up the security aspect substantially, but can be inconvenient.

It should also not be seen as the only security measure that you should take. Use a combination of the methods we have listed to help protect your coins.

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