Since the beginning of time, man has found the need to store or preserve things that are of value. From the storage of gold coins to diamonds to paper money and now Bitcoin, proper storage can not be overemphasized. Governments, businesses and even individuals ensure and seek ways they can store their money (physically) in a safe place. Many keep their money in a bank, some invest their money, some save in a thrift contribution while others in a piggy bank. This shows how critical people are towards the storage of their physical money. This should be the same for the storage of bitcoin.
Bitcoin is one of the first cryptocurrencies and also the most popular cryptocurrencies. A lot of people trade, invest, and mine bitcoin every day. Every bitcoin transaction is stored in a highly encrypted blockchain. Despite this, a lot of people still lose their bitcoin every day due to poor storage. Hence this article will teach you everything you need to know regarding how to store your bitcoin safely.
How to Store Bitcoin
Bitcoin is stored in a wallet. A wallet is safeguarded by private keys and public keys. However, there are different types of wallets. Each one of them has its uses, advantages, and disadvantages. The different types of wallets are:
Hot Wallet / Online Wallet
These are wallets that can run on any internet-connected device such as a mobile phone, laptop, desktop, etc. This means that the private keys to this wallet are connected to the devices. This wallet is best for storing a small amount of bitcoin. It should be used to store bitcoin for day-to-day transactions. This is because the wallet is not very highly encrypted and thus is vulnerable to hacking. This wallet is mostly found in an exchange account.
While it is very easy for you to access, it is not advisable to store the bulk of your bitcoin in it. If you must store any bitcoin there, it should be what is just enough for a cryptocurrency exchange in a day. This is to safeguard your bitcoin so as not to lose it to fraudsters. To get started, you need to learn how to open and fund a bitcoin wallet in Nigeria.
Cold / Offline Wallet
This type of wallet is the safest for storing bitcoin. This wallet is the opposite of the hot/online wallet. This is because it is not connected to the Internet and thus is not vulnerable to hacking. You can say it is a wallet with minimum risk. The cold wallet should be used to store the bulk of your bitcoin. This is because it allows its users to store their addresses and private keys on hardware that is not connected to the internet. It also has software that enables users to view their details without risking their private keys. However, cold wallets are difficult to set up and access, unlike hot wallets.
As the name implies, a hardware wallet allows a user to store his wallet in a physical hardware device. Hardware wallets are the least popular type of wallet. Transactions performed with hardware wallets are often anonymous. This is because it doesn’t store the user’s details on the hardware thus safeguarding the user against fraud or malware. In addition, it is possible to recover your funds should you lose your private key. This is because there is a 20-word phrase you are required to set up while creating the wallet. However, it is advisable to write the phrase on paper or anywhere safe to access your wallet in such situations.
Presently, it is possible to buy physical bitcoin as several services are coming up that allow users to do so. This physical bitcoin contains tamper-proof stickers covering a certain amount of bitcoin. Storing a physical bitcoin does not require the internet or its devices. Hence it is impossible to encounter any form of online scam. If you have a physical bitcoin, you are free to store them anywhere you deem fit. This is because you have exclusive rights and control over the coins. However, to purchase a physical coin, you have to pay higher than the actual value of bitcoin. This is due to the manufacturing and shipping fees that will be added. Hence we can say physical coins are expensive.
It is one thing to own bitcoin and it’s another thing to store it. Storing Bitcoin is even more important than buying bitcoin. This is because if your bitcoin is not safely stored, no matter how many times you bug your bitcoin you can lose it. As examined in the article, all bitcoin wallets have their uses, advantages, and disadvantages hence it is advisable to own at least two different types of bitcoin for your own best interest. Exchanges like Bitmama also afford you an opportunity to get access to a wallet. So you can buy your bitcoin and still store it on the same exchange.