The discourse of Bitcoin and Security has not been a new one, in fact, the topic has been up for debate ever since its inception.
The one place where Bitcoin clearly outshines its fiat counterpart is providing safety from hegemonic institutions such as Central Banks and Government control of currency manipulation.
Plus, Bitcoin’s most fundamental characteristic is its blockchain, which in no way can be manipulated or altered. Bitcoin uses SHA-256 encryption for both its Proof-of-Work (PoW) system and transaction verification, one of the highest standards used today.
Although this is a major plus for Bitcoin, unfortunately, this alone is not the only aspect of safety that any currency needs to address.
Exchanges and payment processors that deal with Bitcoin has long been subject to cyber-attacks and hacks.
Mt.Gox, perhaps the most famous hack that ever happened to a bitcoin exchange, reported that more than 750,000 BTC went missing from its exchange.
Other major exchanges such as Bitfinex, Binance, Poloniex, Bitstamp have all been subject hacks with a total of 146,097 BTC being stolen.
Recently, a major twitter hack — the biggest of its kind, attacked twitter accounts of major celebrities such as Elon Musk, Jeff Bezos, Bill Gates, Kim Kardashian, and tweeted out a bitcoin scam, the hacker managed to collect $120,000 worth of BTC in a matter of 2 hours.
Such incidents beg the question of can there be anything done to protect one’s bitcoin?
Thankfully, there are steps that you can take to protect your bitcoin and safeguard them from potential hacks and cyber attacks.
Use Hardware Wallet
There are many types of Bitcoin wallets currently available that you can choose. They are categorized into 2 main categories, ‘Hot’ and ‘Cold’,
Bitcoin Wallets that are online and connected to the internet are referred to as ‘Hot’ wallet. These wallets are generally the least safe since they are most susceptible to hacks. They can be on both phones or desktop.
Wallets that are offline and not connected to the internet are referred to as cold wallets.
Most hardware wallets such as Trezor and Ledger fall into this category. They are considered one of the safest ways to store your bitcoin. Since they are not connected to the internet hackers cannot easily access your private keys and steal your bitcoin.
If you are looking for security it is best to stick with hardware wallets.
Never Store your Bitcoin on Exchanges
If history has taught us anything it is that you should never store your bitcoin on an exchange.
Given exchanges are the prime target of most hackers it is always advised to use exchanges only for making the trade but never for storing. Once the desired trade is made, withdraw your bitcoin and any other crypto and keep it in your personal wallet.
Store your Private Keys/Wallet Seed Offline and Never Share Them
There is a very common saying in the bitcoin world:
Not your Keys, Not your Bitcoin
This basically means that if you do not own the private keys you don’t own that bitcoin. The proof of ownership with Bitcoin lies in the private keys of your wallet/address, thus keeping it safe is of utmost importance.
Make sure that your private keys are securely stored offline. This is the most secure way to protect your wallet from hackers.
The same goes for your Wallet Seed. Never store your wallet seed online, in case of a cyber-attack you risk exposing your seed to the hacker if they are stored online.
While storing your private keys/Seed for your wallet, it is always a good idea to keep backup.
If by any chance you lose access to your wallet and your private keys, this backup is the only way you can recover your bitcoin.
Use separate wallets for daily use and savings
While storing bitcoin, it is never a good idea to store all your bitcoin at one place, especially when they are meant for ‘various purposes’.
What this means is that, if you have bitcoin for several different purposes such as, daily use, savings, trading, it is never advised to store them together in one address.
Always separate your bitcoin into different wallets based on their purpose. Even if one of your wallets gets compromised at least the rest of your bitcoin will be safe.
Never click or access unverified bitcoin links
This goes without saying but, avoid clicking any unverified links claiming to be investment opportunities, bitcoin giveaways, or anything similar asking for your private keys or asking you to send bitcoin.
If you are unsure about what the particular bitcoin-related message is about it is always better to leave it alone.
Bitcoin as a currency gives us control over our money but this control does not come without a few responsibilities.
Since Bitcoin is owned by you and stored by you, this makes you ultimately responsible for your bitcoin.
Just some basic steps and practices can ensure that your Bitcoin stays safe and out of the reach of unwanted criminals.