Valuable Steps to Make Your Bitcoin Wallet Safe and Secure
Bitcoin is one of the oldest and most widely used peer-to-peer payment systems today whose market cap value at the present ogenblik is much more than other cryptocurrencies. Owing to the extensive popularity, many companies, spil well spil individuals, have already commenced integrating Bitcoin spil a payment system.
However, there is always a threat looming overheen the security of digital wallets. Last year wij witnessed numerous ransomware attacks, including WannaCry which attacked several pc systems worldwide using Microsoft Windows and demanded ransom payment te Bitcoin cryptocurrency. Albeit the transaction process of Bitcoin is based on blockchain technology, making it utterly difficult to hack the information on cryptocurrency, you still need to meticulously secure your Bitcoin wallet.
LetвЂ™s very first discuss what a Bitcoin wallet is. A Bitcoin wallet is a digital wallet where Bitcoins are stored. Obviously, you cannot store your Bitcoins anywhere spil they contain a private key or secret number for every Bitcoin address saved ter the wallet. There are different types of Bitcoin wallets, such spil a software wallet, online wallet, electronic wallet, hardware wallet or paper wallet. But, before wij can discuss the various methods and technics used to secure Bitcoin wallets, itвЂs significant to throw some light on the major security concerns and threats.
- To start with, you voorwaarde be aware of common threats, such spil duping the users through fake cryptocurrencies, the illicit phishing method, secretly knowing the confidential lock Speld code of your phone, attempting to steal the cryptographic keys, etc.
- The hacker can also hack your Bitcoin wallet by using old password backups. This can be done by creating a recovery program. So, even if the password is switched at frequent intervals, it wonвЂ™t promise that your wallet is safe.
- There is the Sybil attack where the hacker blocks the transactions from all other users spil he attempts to control the network with knots. The users can only connect to blocks that are created by the hacker.
- The 51% attack usually occurs during the initial stages of developing a Bitcoin wallet app when the attacker has more computing power than the developer.
- Other forms of attack include slow down time, vulnerable transactions, Denial-of-Service (DoS) and more.
So, now wij know some of the common threats and are aware that even the two way authentication process, the mysterious nature of Bitcoin, and the absence of any third-party are not adequate enough to secure the digital transactions. LetвЂ™s look into how you can secure your Bitcoin wallets.
Hardware Wallet Storage or Offline Mode
One of the very first steps that you can take to secure your Bitcoin wallet is to use cold storage aka storing the Bitcoin values ter a hardware wallet. This is also called the offline method since it does not require a verbinding to the internet. This option is not spil prone to hacking.
To tell you more, itвЂ™s a zuigeling of physical storage similar to what wij see with USB drives. However, it is recommended that you should not store a large amount of cryptocurrency te cold storage, the best way is separating the Bitcoins on two fronts. The very first, which is a puny amount, can be kept online for trading purposes and the 2nd amount can be stored te the hardware wallet.
If wij talk about cold storage wallets, then Trezor or the Ledger Nano S can be cited spil examples. However, you need to pay a charge of up to $100 for setting up and getting the Speld number, which is the password used to access the wallet contents. You will also get a recovery seed ter case you leave behind Speld or it malfunctions. But, if you lose both your Speld spil well spil recovery seed, then you will run into trouble.
Creating Backup(s) of Your Wallet
The experts are te the favor of creating backups to remain on the safe side te case the device or gegevens gets lost. You have to back up your entire Bitcoin wallet to protect it against laptop failures and human errors. This would include Bitcoin stored te cold storage and puny amount kept for trading purposes. You can recover your stolen wallet if it is encrypted.
- You should back up your entire wallet. There are some wallets that contain hidden private keys internally. If you only back up those private keys, and not the entire wallet, you might not be able to recover all of your funds.
- It is significant to encrypt your backups, spil the funds stored online are prone to theft. Even the rekentuig system connected with internet becomes vulnerable, provided it is not decently secured.
- ItвЂ™s not a good idea to use a single location for backing up the Bitcoin wallet gegevens. So, make use of numerous locations so that you can recover your lost gegevens lightly.
- Regular back up is necessary spil it ensures all latest Bitcoin addresses and any fresh Bitcoin addresses you created are included te the backup.В You should do this te case of any hardware crash or if have to go for laptop formatting.
Encrypting the Bitcoin Wallet
Encrypting your Bitcoin wallet adds an toegevoegd layer of security. The wallet can be encrypted by using a passphrase. The passphrase permits you to lock your coins and it becomes difficult for the hacker to take anything unless he knows your passphrase.
If you are using a mobile device or a laptop to conduct the Bitcoin transaction, then encrypting your wallet becomes all the more necessary spil you are connected to the internet.
You should already know this well, but just ter case you donвЂ™t, the password should be very strong. Include everything from caps to numbers and special characters. DonвЂ™t store it anywhere.
DonвЂ™t Leave behind Your Password
Never leave behind your password or else it will be very difficult to get back your lost fund. Bitcoin offers very few chances of password recovery. So, memorize it.
Updating the Software on Regular Fundament
Software updates are one of the most common security measures out there. You voorwaarde use the latest version of the Bitcoin software irrespective of whichever software you are using. The updated software will keep informed about the latest security fixes. It will also safeguard your wallet features. If your Bitcoin wallet is not updated, then you can lightly become the prime targets for the attackers and the phishers.
Ter addition, it is also identically significant to keep your devices up-to-date te which you have stored all the vital gegevens. So, make sure you opt for its servicing too.
Opting for Multi-Signature
Multi-Signature is one of the essential steps that will help ensure that your Bitcoin wallet is safe and secure. Now, what is it? Well, it is a process te which a particular transaction has to get an approval from, for example, no less than three to five individuals.
Any organization can give permission to access its Bitcoin wallet, but the withdrawal of funds can be done under only one condition that the transaction is signed by Three to Five people. The Bitcoin wallet uses the multi-signature facility permitting user to take control overheen his money and preventing from thefts.
Two Factor Authentication Process
One of the technics to secure a Bitcoin wallet is two-factor authentication (2FA). This process is considered optimum because it requires two lumps of information before it grants access to the wallet. This means, even if someone were to guess or obtain your password, they would still not be able to access your wallet without the other factor.
You have a duo of options for setting up 2FA for your wallet. One is Google Authentication, which uses a six digit number that keeps switching every minute but is always known to you. Another option uses biometrics, which have become very popular. Here you have to give your fingerprint. You can go after any one of the options, whichever is convenient for you. ItвЂ™s worth noting that not all wallets suggest 2FA.
Some Other Methods to Go after
You should go after a number of methods to secure your Bitcoin wallet. HereвЂ™s a good checklist:
- Open websites and emails very cautiously. A number of phishing emails are sent through Google Ads and this is becoming common thesis days. Make sure that the emails contain zindelijk addresses and have juist domain names. It is advisable to use a non-public email for carrying out crypto transactions. Also, be cautious while using Wi-Fi (especially public Wi-Fi) when connecting to the internet.
- Turn off automatic updates that are related to your Bitcoin wallet so that the software does not get updated on its own without your permission. If you fail to do that, your system can get affected with bugs and this would literally mean that you will lose all your vital gegevens. You can wait for a duo of days after the update is released to check if a bug is present or not.
- Check if there is any SSL security mark ter the address window of your web browser. This is a security sign that indicates that your browser is encrypted. The webstek should always start with HTTPS.
- Check the address of the sender twice or even thrice before sending him the payment. An attacker can attack on the address and use the copy paste option to send the money to a different address. The best possible option is very first sending a very puny amount and once it gets verified, then send the larger amount.
Wij all know that the attackers today have become very clever and technologically slim. With its rise ter popularity, there have bot a number of incidents involving theft of Bitcoin. Wij can cite some major incidents here.
Ter June 2011, a Bitcoin user lost about $500,000 bitcoin to hackers. Similarly, te March 2012, hackers were successful ter stealing about $46,703 bitcoins by attacking the online web host Linode.
So, wij need to stay oplettend and always keep the system and software updated. The storage of Bitcoin values, creating a backup and gegevens encryption are all essential te this regard.
About the Author
Mehul Rajput is an entrepreneur and CEO of Mindinventory, a Blockchain development company. He does blogging spil hobby and love to write on mobile technologies, startup, entrepreneur and app development.
Note: В This blog article wasgoed written by a guest contributor for the purpose of suggesting a broader multitude of content for our readers. The opinions voiced te this guest author article are solely those of the contributor and do not necessarily reflect those of GlobalSign