Bitcoin is on another roller coaster ride. Over the last few months, the value of the cryptocurrency has risen from $ 3,000 to over $ 13,000. At the moment, it is $ 10,000.
Such circumstances encourage people to buy bitcoins, hoping to gain a head start. However, Bitcoin's rising price is also attracting malicious hackers, who see the opportunity to steal the funds of careless users who are unfamiliar with the fundamentals of Bitcoin security.
If you're new to Bitcoin, these tips will help protect your digital assets.
Protect your online wallet.
The easiest way to get started with Bitcoin and other common cryptocurrencies is to use an online wallet like Coinbase or Binance. Online wallets hide many of Bitcoin's technical challenges, such as: As the handling of private keys and addresses. Therefore, they are an attractive option for people who are less tech savvy or do not know Bitcoin yet. Signing up for most online wallets takes no longer than a few minutes. All you need to access your account is a browser, username, and password.
But online wallets are not the safest place to store your cryptocurrencies. Anyone with your email address and password can access and steal your coins. Poor actors can accomplish this with a simple phishing e-mail. Unlike traditional payment systems, recovering lost bitcoins is virtually impossible.
Here are some best practices that can improve the security of your purse:
Enable Two-Factor Authentication (2FA)
Most online wallets support some form of two-factor or multi-factor authentication , Enabling 2FA links your account to a phone, mobile app, or physical dongle. If a malicious hacker receives your username and password, he will need that extra factor to access your account.
Do not use your phone number for 2FA
Most Web sites support multiple forms of two-factor authentication, but not all 2FA methods are equally secure. If you rely on SMS passcodes to secure your account, experienced hackers can hijack your phone number and intercept your 2FA passcode. If you assign a phone number to your account, we recommend using a separate, secret SIM card.
Using a Separate Email Address for Your Bitcoin Wallet
Most of us have a primary account for daily communication ̵
Using an Offline Wallet
Each Bitcoin wallet has one or more "addresses" under which to store the cryptocurrency. Bitcoin addresses are long, unique alphanumeric strings, and each address has a pair of private and public encryption keys. If other users want to send bitcoins to your address, they will use your public key. If you want to spend your bitcoins, sign your transaction with the private key. The private key indicates that you own the bitcoins stored under a specific address. The key to backing up Bitcoins is therefore to keep your private key in a safe place.
If you use an online wallet, you can effectively have your private keys backed up by the service provider for you. That's why using wallets online is so easy. It also makes online exchange an attractive target for hackers. Although these companies do their best to protect user accounts, they are often violated.
An alternative to online Bitcoin exchanges is offline wallets, which give you complete control over your private keys and protect you against mass data breaches on Bitcoin exchanges. The trade-off is that they are harder to set up and use and require more technical knowledge. There are several types of offline wallets:
Software Wallets are applications that you can install on your computer, portable storage drive or mobile device. In a wallet app like Electrum, private keys are stored on your device and used to sign bitcoin transactions when you want to make a payment. If you want complete security with a software wallet, you must install it on a computer that is not connected to the Internet and transfer signed transactions to a computer connected to the Internet. The process is more difficult, but also safer.
Hardware wallets are physical devices that generate and store key pairs in cryptocurrency. They usually come with an associated app that you need to install on your computer or mobile device. If you want to send bitcoins to someone, you need to connect the hardware wallet to your computer or pair them with your phone via Bluetooth. Each transaction is signed in the hardware wallet with the user's consent. Hardware wallets are very secure because the private keys never leave the device. Trezor and Ledger are two popular options.
Paper wallets are bitcoin key pairs that are printed as QR code on paper. You can create paper folders on one of several websites, such as Eg bitcoinpaperwallet.com. To get money in your wallet, scan the public key with any Bitcoin wallet app and send it to the payer. To send bitcoins from your wallet, scan your private key to sign your transaction.
Paper wallets are "cold stored". This means that they are well-suited for secure storage of bitcoins but are not very practical for daily payments. Paper wallets are safe as they contain no digital components and can not be stolen or hacked remotely. However, you must destroy the digital copy of the wallet after printing to make sure it is not replicated by anyone else.
Using an offline wallet does not mean that your bitcoins are completely safe. If you leave your private keys in an unsecured location, the wrong person might come across them. In addition, you could accidentally destroy your keys, which can also cause you to lose your money without recourse. For example, if you lose or destroy your hardware or paper wallet, or forget your security PIN, your bitcoins will be lost forever.
Online or offline wallet? The choice is yours. But choose wisely and make sure you keep your bitcoins safe.