Securing your Bitcoin wallet

12 Jan

Securing your Bitcoin wallet

Basic Knowledge, Instruction

Similar to the reality, your money needs to be secured. Because all Cryptocurrency exchanges are carried out and saved by computer, security concerns will always come when hackers have a desire to steal your assets.  This article will guide you to set up the security mode for your Bitcoin wallet as well as help your account avoid being stolen. Transfering value is very easy with Bitcoin. This digital currency allows you to be able to control your money in an effective way. However, these excellent features also go with huge security problems. If used correctly, your Bitcoin wallet can be secured in a high levels. You should remember that it is your mission to get into good habits to keep your money safe.

Watch out online services

You needs to be very careful with any service which is designed to save your funds online. Many online wallets and exchanges faced securities breaches, therefore, online wallets are not absolutely safe.

Be careful with online services

Generally, services still do not give enough security and insurance  like a bank. Hence, you should think about other types of Bitcoin wallets.

If you still want to use online wallets, you should carefully choose such services.

Additionally, using two-layer authentication is suggested to protect your Bitcoin account.

Small amounts for everyday uses

This wallet is similar to a normal wallet. If you don’t want to keep 1000 USD in your pocket, you should not put to much Bitcoin in your wallet, either. It is perfect to keep some Bitcoins on your computer, server or mobile phone for daily using and to keep the rest of your money in a safe environment.

Small amounts for everyday uses

Backup your wallet

After being stored in a secured place, you can prevent some human mistakes and computer failures with a backup of your wallet. It also allows you to get your money back after your computer or mobile phone is stolen if you encrypted your wallet.

Backup your entire wallet

Several online wallets use many private keys inside. You will not be able to get a great part of your funds back if you just set a backup of the private keys for your visible Bitcoin addresses.

Back up your entire wallet

Encode online backups

Any backup stored online is easy to be stolen. Because a computer connected to the Internet is also vulnerable to malicious software. Therefore, you need to encrypt any backup that is connected to the network.

Use many safe locations

Single wrong actions might result in bad aftermaths in Bitcoin security. In case your backup is not depend on a unique location, any bad event will not able to prevent you to get your wallet back. You may also think about using different medias such as CDs, papers and USB keys to encrypt these backups. .

Use many safe locations

Make regular backups

You should backup your Bitcoin wallet regularly to make sure that all new Bitcoin addresses you create and all recent Bitcoin change addresses are included in your backup. Nevertheless, all apps will be soon using wallets which only need to be backed up once.

Encode your wallet

Encoding your Bitcoin wallet or your phone allows you to set a password when anyone tries to withdraw money. This will help prevent your wallet from being stolen, even though it cannot prevent keylogging software or hardware.

Encrypt your wallet

Always remember your password

You have to make sure that you will always remember the password. Unsimilar to your account in the bank, Bitcoin’s wallet provides very limited password recovery options. You ought to remember your password for a very long time, even if you do not use it. If your password is too long or concluding special letters, you should keep its paper copy in a safe place like a vault.

Set a strong password

Passwords that contain recognizable words or only letters are very weak and breakable. A strong password should contain numbers, letters, punctuation marks with at least 16 characters long. The strongest passwords are those created by programs designed for a specific purpose. A secure password is usually hard to remember, so you should be careful when memorizing it.

Use a strong password and store it in a safe place

Offline wallet for savings

An offline wallet that is also known as a cold storage wallet gives best security for saving Bitcoin. It concludes storing a wallet in a safe location which is not connected to the internet. When it is done correctly, it can provide a perfect protection against computer failures. Utilizing backups, encyption and an offline wallet together is also very good way to protect your money. Here is some ways to store your Bitcoin in offline wallet.

Offline signing transaction

This method requires you to have two computers to share some parts. The first computer needs to be disconnected from internet. This computer is the only one keeping the entire wallet.

The second one is network connected. It only has a watching wallet which is able to create unsigned transactions only. You can securely issue new transactions with the following steps by this way:

  1. Make a new transaction on the computer connected to the network and save it on an USB.
  2. Only sign the transaction with the second computer that is not connected to any network.
  3. Use the online computer to send to transactions that is already signed.

Offline transaction signing

Because the computer connected to the network cannot sign transactions, it cannot be used to withdraw any money if it is compromised. Armory can be used to do offline transaction signature.

Saving wallets on hardware

Saving wallets on hardware the best choice with ease of use and high security. They are small devices which are designed to be a wallet and nothing else related. No software is able to be installed on the hardware. Therefore, They are very secure against computer failures. Hardware wallets provides backup as well that allows you to get your money back if you lose the device.  

Saving wallet on hardware

Always update your software

Using the better version of Bitcoin software helps you to receive necessary security and stability –fixed update versions. Updates can protect your money from problems of various severity. Particularly, updates often conclude new outstanding features and help keep the safety of your wallet. You should install updates for other softwares on your computer or mobile phone as well because it is also very important to keep your wallet environment safer.

Always update your software

Using multi-signature to prevent theft

Bitcoin has a multi-signature feature which allows users to require many  independent approvals before allowing a transaction. This feature can be utilized by organizations to provide its members or staff access to their treasury, and only allowing a withdrawal if at least 3 of 5 members agree to sign the transaction.

Several web wallets also include multi-signature wallets. This allows the users to not only control  their money but also prevent a thief from stealing money by compromising a server or device.

Using multi-signature to prevent theft

Make your own testament

Your bitcoins in the wallet can be lost forever if you don’t have any backup plan for your children and family. If no one knows the location of your wallet or your passwords, it is impossible that your fund will be recovered. Spend a bit of time on this matter.

With the development of modern technology, personal and financial information security is more upgraded. However, hackers keep up with the trend very quickly so let’s carefully prepare for protecting your endeavors, especially when Cryptocurrency is in its heyday.

 

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