With the current price of Bitcoin in the market, it has now become paramount to protect your Bitcoin wallet. As the largest cryptocurrency by market cap, it is no brainer that many hackers will try to steal Bitcoin because of its immense value. If you are a Bitcoin holder seeking to secure your wallet from hackers in cyberspace, then this article is for you. Here, you’ll learn a few tips for securing your Bitcoin wallet. Follow each of them to reduce the risk of your wallet getting breached by hackers.
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What is a Bitcoin wallet and how does it work?
A Bitcoin wallet is a device or software, online service, or physical medium that lets you store the private and/or public keys for your Bitcoin transactions.
Basically, if you want to send, receive, or even store Bitcoins, you will need to get a Bitcoin wallet. Your wallet will be the medium used to execute any of these tasks. Technically speaking, your Bitcoin wallet doesn’t store any actual Bitcoin in it because Bitcoin is a digital network with records of immutable transactions. Rather, your Bitcoin wallet serves as a store for your private and public keys.
- Your private key is just like your unique bank account number. It is a private and unique number that lets you access your Bitcoin at any time.
- Your public key is just like your bank’s routing number. It is a number that can be shared to be public to allow them to send funds to your wallet. So if you need to receive funds in your wallet, you need to share your public key with the sender.
You will need to have both your private and public keys to complete any transaction with your Bitcoin wallet. Also, you need to keep your private key safe, as it acts as a password to your Bitcoin wallet. Anyone who knows your private key can access your wallet.
Are there any security issues associated with crypto wallets?
Yes, there are security issues that come with crypto wallets in general. Generally, anything that exists in the digital space comes with security risks, and crypto wallets are not left out. Here are some common security issues associated with crypto wallets:
1. DoS attacks
A DoS attack, short for denial-of-service attack occurs when a malicious actor bombards a digital wallet with numerous requests that cause it to become overloaded and unable to function well.
2. Deanonymization
Deanonymization happens when a third party traces transactions and eventually identifies the owner of a digital wallet. For instance, this can happen when you make use of a Bitcoin mixing service that later gets hacked.
3. End users’ lack of data security
End users’ lack of data security is another security issue that can occur due to negligence. This simply happens when people are negligent about keeping their Bitcoin wallets secure. For instance, this can happen when you use weak passwords for your wallet or store your private key in an unsafe location.
4. Platform trust issues
This happens when there is a security breach in the platform where you store your private keys safely. When you use a digital wallet to store your Bitcoin and unfortunately, the platform gets hacked and loses user’s private keys, you’ve been breached based on platform trust issues.
5. User authentication problems
This happens when a digital wallet doesn’t have adequate user authentication set in place. When this happens, it becomes possible for anyone to access your wallet and steal your funds.
6. Cryptographic flaws of crypto wallet apps
Cryptographic flaws can also exist in cryptocurrency digital wallets. For instance, some Bitcoin wallet apps use unsafe random number generators to generate passwords. This can make them very liable to attack.
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Tips for securing your Bitcoin wallet
Now that you know what a Bitcoin wallet is and the different security risks it can be exposed to, let’s share the top 11 tips for securing your Bitcoin wallet. Follow the tips below to reduce your chances of getting a breach in your Bitcoin wallet:
1. Always choose hardware wallets
Your safest bet when it comes to securing your Bitcoin is a cold storage because it keeps you away from cybersecurity threats. Hence, you should always choose hardware wallets for your Bitcoin.
Crypto wallet manufacturers like Trezor and Ledger have different models of USB-like storage devices that already come with solid encryption features and pre-installed security layers. These devices don’t connect to the internet so your Bitcoin is safe from cyber criminals.
2. Always make use of a secure internet connection
Most people should know by now that public networks have security loopholes and are very vulnerable to attacks. So if you use a mobile app as your Bitcoin digital wallet, try as much as possible to avoid connecting your phone to public networks when accessing the app. Rather, use your phone’s Internet connection or your home or any other well-known network to connect.
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3. Keep your private key offline
Let’s keep it simple. Keeping your private key offline is the best way to protect it from online threats. When you take your private key offline, you save yourself from a lot of headaches. The safest way to do this is to simply write down your private key on any piece of paper and keep it safe, instead of saving it on an electronic device.
Ensure that you keep the paper where your key is written in a dry and cool place. Protect it from heat direct sunlight or rain, to avoid deterioration.
4. Do not try to access unknown or suspicious links
Always be careful with any activity you do online and check the link of the website you access if something feels odd about it. Internet scammers and hackers can clone an entire website and even use practically identical URL addresses to the original ones.
If you make use of an online wallet or any electronic service that requires you to input your wallet’s private key, ensure that you confirm that the website address you are on is the authentic one.
Also, always be on the lookout for Bitcoin sham emails. These kinds of emails are increasingly becoming popular and often request that you visit a certain website or input your details.
5. Use a reliable and updated antivirus software
Although Windows users are generally exposed to more varieties of bad malware, all operating systems still have their fair share of malicious programs. Hence, you should check if your computer has reliable and updated antivirus software installed. Most cyber-attacks make use of viruses and malware to get access to your device and tamper with it. So it is very crucial to do a proper device scan before you install your wallet.
Also, don’t forget to always update your software on time, as this will protect you from all the latest viruses or malware programs.
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6. Keep a different wallet for your daily transactions
If you want to actively trade in the crypto space, it is best to create another wallet separate from your main wallet. This wallet should be used for your day-to-day trading and make sure you top it up when necessary.
There is no specific limit to the number of Bitcoin addresses or wallets that you can create for trading. Sorting your crypto transactions and reserving the most important accounts will generally improve the safety of your portfolio.
7. Never give away your private key
Don’t forget that private keys are secure and should be for your eyes only. Never share your private keys with anyone and do not allow anyone to execute transactions for you. Ignore all requests that involve you giving out your private key to any person.
8. Use a strong password for your online wallet
If you decide to use an online wallet to store your Bitcoin, be very careful when selecting your password. Make sure you don’t use phone numbers, names of pets, birth dates, your middle name, your mother’s name, or even the name of your favorite movies. Rather, use an alphanumeric combination that just makes sense to only you. Ensure that the password to your Bitcoin wallet is unique and different from your other passwords.
9. Always check the Bitcoin address
When executing crypto transactions, you need to always be cautious about the recipient’s address. Certain harmful malware programs can ‘intervene’ whenever you copy and paste a Bitcoin address. This malware can change the pasted output to an entirely new address. If you don’t check carefully, you may end up transferring your Bitcoins to another recipient.
10. Back up your digital wallet
A backup will let you access your Bitcoin wallet whenever you lose your device or maybe your device ceases to function. So make sure you make provisions for backing up your device. If your wallet device is stolen, you can easily restore access to it with the backup file you created. Your backup should serve as a precautionary measure.
11. Always make use of two-factor authentication to add an additional layer of protection for online wallets
Most online wallets give users room for two-factor authentication, so you should take advantage of it. It’s a simple but very effective security measure for your Bitcoin wallet.
Your Bitcoin wallet holds your private and public keys, so anyone who has access to it can steal your coins. For this reason, you should do everything within your capacity to keep it as safe as possible. Follow the tips for securing Your Bitcoin wallet we’ve listed above to help you through the journey of securing your wallet. Lastly, note that the crypto world is constantly evolving. So you must stay updated on the latest threat that can endanger your wallets and take active steps to protect your wallet accordingly.
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