The world is experiencing a Bitcoin boom right now. In terms of 24 hour trading volume, Bitcoin (BTC) is the second largest cryptocurrency at USD 70.45 billion in the world, following Tether (USDT) at USD 153.65 billion . But with the increasing interest in and trading volume of Bitcoins, there’s also an increase in prying eyes that aim to steal your Bitcoins.
Bitcoin trading is supported by hundreds of Bitcoin wallets across the globe. The wallets used by cryptocurrency traders and holders are susceptible and vulnerable to cyber attacks, as these currencies run electronically on a technology known as blockchain. This is why choosing a reliable, safe and secure online Bitcoin wallet is imperative. But there are more ways in which you can secure your Bitcoin wallet . Here are a few ways in which you can dodge away hackers from your Bitcoin wallet.
1. Pick the right Bitcoin wallet for yourself
In order to trade in Bitcoins, traders require a Bitcoin wallet, which is also known as a digital wallet. A Bitcoin wallet is an electronic device and a software program that can be used to store Bitcoins. These wallets basically facilitate the sending, receiving and tracking of your Bitcoin transactions.
Technically, Bitcoins (or any other cryptocurrency) cannot be saved or stored anywhere. Bitcoin wallets essentially show you how much is your Bitcoin balance. Bitcoin wallets are similar to physical wallets. The difference is that the digital wallets, instead of storing fiat and actual money, store user information, like the secure secret key or private key which is used for carrying out transactions and to access Bitcoin addresses.
There are so many types of Bitcoin wallets out there, it has made difficult as to which one to pick. Here are a few types of wallets you can pick from:
By far, the most secure type of Bitcoin wallet is Hardware wallet. This is because hardware wallets store Bitcoins on physical equipment pieces which are usually plugged into computer systems through USB ports. Hardware wallets are practically immune to virus and malicious attacks, and fewer instances of theft have been reported. These wallets are the only ones that aren’t free and usually cost between $100 to $200.
Web or software wallets allow you to access your Bitcoins from anywhere, from any browser and mobile device. Choose your web wallet carefully as they store your private keys online. The most popular web wallet providers are Blockchain and Coinbase.
These can be installed on desktop computers. It functions as a Bitcoin address for users where he can send and receive Bitcoins. It allows users to store their private keys. A few desktop wallets are MultiBit, Bitcoin Core, Hive OS X, Electrum and Armory
Performs exactly the same functions as desktop wallets. Mobile wallets allow payments via ‘touch-to-pay’ and NFC (Near Field Communication). These are compatible with either Android or iOS devices. A few mobile Bitcoin wallets are Hive Android, Mycelium Bitcoin Wallet and Bitcoin Wallet.
2. Keep your wallet password game strong
Scammers, hackers and cybercriminals keep trying different tactics and methods of convincing you to give up your Bitcoins. They might pose as someone you can trust or even one of your acquaintances. When it comes to your Bitcoin wallet passwords, you have to be very diligent. Keep the following things in mind:
- Always set strong passwords for your digital wallets. Include alphabets, numbers, capital letters and special characters (@, #, &, etc.)
- Use different passwords for different digital wallets, if you have more than one. Strong, lengthy passwords are hard to crack
- It is highly recommended that you keep your Bitcoin wallet passwords confidential and not share them with anyone, at any cost. Don’t share your OTPs or passwords with anyone and do not save them emails or WhatsApp
Don’t fall for scammers and hackers on Groups on Telegram or other websites asking for passwords, One Time Passwords or funds. Stay aware, alert and safe.
3. Make sure you enable two-factor authentication
Also known as dual-factor authentication or two-step verification, two-factor authentication (2FA), is a type of online security process. This process provides two authentication factors to verify their identity. Different types of verifications include OTPs through emails and SMS and biometrics. Completing two-factor authentication adds a thick layer of security to your Bitcoin wallet. Good Bitcoin wallets allow you to add 2FA not just at the time of signing in but also when withdrawing and transferring funds, so that you know right away if scammers are trying to access your wallet without your knowledge.
4. Don’t forget to encrypt the Bitcoin wallet
An additional line of defense against scammers is encrypting your digital wallet. The clever process of encoding data so only people with authorized access can view or interfere with it is known as encryption. Through encryption, you set a password so that your coins get locked when scammers attempt to access your account. So, basically, no one will be able to get hold of your Bitcoins unless they know this password set by you.
5. Treat your private key as your bank PIN
Your private keys are to be treated as possessively as you treat your bank PINs. Secret keys or private keys in digital wallets are used to validate the individual sending or receiving Bitcoin or other cryptocurrencies. One of the bullet proof ways to keep your private key safe is by using cold storage, meaning printing the key and deleting all digital traces of it. Do not share these keys, or any wallet related information, with anyone on chat, mail or social media websites.
6. Use a wallet with multisig feature
Cryptocurrency Bitcoin is probably the only crypto asset that allows traders to enable a multi-signature, or multisig, feature. This feature allows a transaction to happen only if multiple authorized individuals linked to your account provide approval. Meaning, if you decide to activate the multisig feature, BTC transactions from your account will happen only if more than one individual gives approval. For instance, suppose you have a considerable stash of Bitcoin that’s known to certain members of your family. Using the multisig feature, all of you can get access to the Bitcoin wallet with the exception of enabling a withdraw only if all or majority of the family members sign the transaction.
7. Separate wallet for everyday transactions
If you’re someone who makes small transactions daily, it is good practice to create a separate wallet which can be topped whenever needed. There’s no limit to how many Bitcoin wallets or addresses you can have or create.
8. Backup your digital wallet from time to time
Always remember to take backup of your recovery/seed phrase and save it in a secure place. Some renowned digital wallet apps have a data backup feature. Backing up your Bitcoin wallet regularly enables you to access your data in case your computer system encounters a software failure. The data which is backed up and funds can easily be retrieved if they’re stolen or lost. For easy account recovery, ensure using multiple backup devices. You can consider devices such as papers or hard drives, such as CDs or USBs.
9. Ensure your software is up to date
It is important that you keep your software updated. This is because software updates allow you to get the most recent and enhanced features related to security on your Bitcoin wallet needs. Consider switching on automatic update. If not that, you at least want to be notified about the latest software updates. In this way, you will know what the new features are and your transactions won’t be interrupted in the middle. Also, you might want to consider waiting a few days before installing the latest update, in order to check if there is a bug that might affect your data or devices.
10. Make sure your internet connection is secure
If you frequently use public WiFi, you might want to reconsider. Free public WiFi networks often have flaws, are unsecured and are vulnerable. This makes it super easy for scammers and hackers to steal your confidential information. So, if you have a Bitcoin wallet on your devices, like a laptop, do not connect it to a public network. Instead, connect it to your smartphone’s hotspot. You can also use VPNs (Virtual Private Network) that secure your connection and switch off the Bluetooth of your phone to avoid connections with unknown devices. However, it would be best if you transact using Bitcoin wallet only on home networks or well-known networks which you can trust and are certain they are not easily prone to malicious attacks.
11. Use an updated antivirus
Make sure your computer and other devices are installed with an updated version of a reliable antivirus installed. As most hackers use malware and viruses to tamper and access your device, installing a proper antivirus software before downloading a Bitcoin wallet on your phone. Also, remember to update your software regularly, in order to keep your wallet protected from malware programs.
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 de Best, R. (2021) “Biggest cryptocurrencies in the world based on 24h volume on April 14, 2021” Statista [Online] Available from: https://www.statista.com/statistics/655511/leading-virtual-currencies-globally-by-purchase-volume/ [Accessed April 2021]