Tips for Securing Your Bitcoin and Crypto Wallets
Although Bitcoin is the first thing that comes to mind when you think “blockchain,” the famed block-based technology is about so much more. The online security branch has seen tremendous improvement since the dawn of blockchain.
Blockchain wallet security has turned into somewhat of a heated debate over the past few years. “How to safely store cryptocurrency?” becomes even more of a burning question each time a crypto hack occurs.
In this article, we’re going to help you learn more about blockchain wallet security. Instead of googling “how to keep Bitcoin wallet safe,” we invite you to learn how to truly protect your Bitcoin wallet.
Your Investment Is as Safe as Your Wallet Is Secure
Cryptocurrency wallets are secure platforms that store information about the users’ cryptocurrency balance. You can think of them as crypto storage, although the wallets don’t store your funds – just the access information about your cryptos that are actually on the blockchain.
Your crypto security is all based on private keys, which are unhackable. As long as you are the only one in possession of a private key, you can protect your Bitcoin wallet – you have the most vital piece of information.
Some wallets might not be the best way to hold cryptocurrency, though. Exchange wallets, for instance, are as safe as the parent platform. Exchange-wide hacks have been known to happen, meaning that they might not be the pillars of blockchain wallet security. Private wallets are a much safer option.
Most Secure Bitcoin Wallet
Unfortunately, there isn’t a single most secure Bitcoin wallet on the market. There are various options and alternatives. Let’s consider the wallet that you might want to go with and look at the most secure Bitcoin wallet types.
We’ve already discussed the difference between exchange and private wallets. But not all private wallets are the same. There are offline and online private wallets. Offline wallets aren’t connected to the internet. In fact, they are in “physical form”.
Offline wallets are the safest crypto storage option. There are two main offline wallet storage types: hardware and paper wallets.
Hardware wallets are usually specifically constructed USB storage options that contain your private key on them, behind layers of security. Using one of the available online software options, you can turn any device into a hardware wallet, but this is a less secure option. However, as long as you have a computer that is never connected to the internet and used only for private key storage, your crypto information is safe. Hardware wallets are the most secure Bitcoin wallet type.
Then, there are QR code-based paper wallets, which store all your private key and crypto storage information as a QR code on a piece of paper. Although this option is also very secure, all it takes is for someone to take a photo of that piece of paper, and they can gain access to your entire crypto storage.
Online wallets are, in some way or another, installed on your preferred device. They come in three main types: app wallets, extension wallets, and online wallets.
App wallets are the most secure Bitcoin wallet type when it comes to online options. They are pretty much apps that are installed on your device (typically computer or smartphone) and accessed without using a browser. This makes hacking attempts more difficult.
Extension wallets come as extensions installed to your browser. They don’t involve you visiting any website, which cuts the risk of phishing (hackers often create a redirect-type website that looks like a website you have an account on, prompting you to enter your login info or even private key). Still, extension wallets are susceptible to hacks.
Finally, there are online wallets, which operate like websites. You follow a URL, enter your credentials, and get access to your funds. These are the least safe blockchain wallet security type out of all private storage options.
How to Keep Your Bitcoin Wallet Safe
There are two types of keys when it comes to cryptocurrencies: public and private. Think of public keys as your crypto addresses – they are shared with everyone. Private keys, on the other hand, are best not shared at all, as this is how people gain access to your crypto savings.
Whatever your wallet type, never share your private key, especially not online. This is the pillar of Bitcoin wallet safety. This is also what makes private wallets a much safer option, compared to their exchange counterparts. Whereas you are the only one who has the private key information (as long as you don’t share it with someone or make it easily hackable), exchanges also store your private key info. A single exchange hack can leak your private key information.
Best Way to Hold Cryptocurrency
It’s not really about the most secure Bitcoin wallet. Like with any valuables, you shouldn’t keep everything in one place. If a crypto storage’s access is breached, you’ll most likely lose everything you’ve stored in it.
Being smart about it and storing your cryptocurrency assets in a number of different locations is the best way to go.
The worst thing you can do is store all your assets in an exchange wallet, for trading convenience. As already discussed, there are a lot of examples of exchanges getting hacked and people losing their funds. So, set aside a portion of your currencies for trading and move it to your exchange wallet. As soon as you get a substantial influx, move some of your funds to a private wallet.
You should also consider using more than one private wallet type. Spread your funds over a number of storage options and make sure that you use at least one offline wallet. Yes, this can get a bit frustrating and tedious, but it’s the best answer to the question of where to keep your Bitcoin.
The pillar of blockchain wallet security isn’t using the most popular wallet on the market – it’s about splitting your crypto possessions in multiple locations.
Store Your Private Keys Offline
Private keys aren’t something that you’re likely to remember – they are encrypted number strings. So, you’re obviously going to have to store this information somewhere. If you’re using a private wallet and lose your private key, you also lose all the funds held on it. No tech support will be able to help you here. This is why private wallets are more secure than exchange wallets – even the most secure Bitcoin wallet company doesn’t have your private key.
But if you store your private key online or on a device that’s often connected to the internet, a cybercriminal can easily find their way to your key’s location. For that reason, storing the key offline is recommended, whether we’re talking about a computer that isn’t connected to the internet or another offline wallet option.
You should always have offline backups of your keys. If your offline storage device happens to malfunction, your private key may end up irretrievable. Blockchain wallet security isn’t just about keeping your private key away from hackers – it’s about ensuring that you can always access it.
Be Careful – Phishing Scams Are Everywhere
The more the technology moves forward, the easier it is for an average internet user to recreate the physical appearance of a popular website. A scammer might create a faux exchange website and steal your login information. This is one of the more obvious phishing scams.
Phishers know that people are usually careful around exchanges. This is why they may choose to strike by creating faux Facebook, Google, and YouTube sites or ads. In fact, they may even get to your device using wrongly-uploaded fake Android and iOS apps.
To play it safe, don’t use a device with your crypto storage for visiting anything else than websites that you trust 100%. Even when visiting a trusted website, be sure to triple-check its authenticity. Blockchain wallet security and online security, in general, is founded on being careful and checking everything multiple times.
Pay Attention to Destination Addresses
Just like losing your private key means losing the crypto funds stored on it forever, sending funds to a wrong address most likely means losing the sent amount permanently.
Always check the destination address at least three times. Pay attention to the first few and the last few characters, but also check the entire string. Using the copy-paste function is much better than typing the destination address in. Still, you should always pay extra attention when sending funds.
Use Client-Side Open-Source Wallets
The biggest benefit of open-source software is that it is developed by the community. This means instant marketing testing, no trial or test runs required. Everyone can get access to the project’s development. Yes, this does include cybercriminals.
A great way to ensure safety here is going with a client-side open-source wallet. A client-side wallet is run entirely from the client’s browser, which means a practical, safe storage option for your crypto funds. Taking every single precaution here as with any other wallet type goes without saying, of course.
Regardless of whether you’ve decided where to keep your Bitcoin or not, one thing is for sure – the vast majority of wallets have a two-factor authentication (2FA) option. Essentially, this safety measure gives you a new security layer. Every time you try logging into your account, you’re asked to confirm that it’s actually you via email or using another device (smartphone, for example).
The 2FA has pretty much become a no-brainer, even for websites that don’t include any financial transactions. The least you can do for your blockchain wallet security is enable the 2FA and confirm an account login via your smartphone (SMS). Most wallets have optimized this brilliantly, with SMS confirmations arriving at your phone instantaneously.
Making Your Wallet Secure
We hope that this information will help you protect your cryptocurrency savings. Keep in mind that crypto security doesn’t boil down to using a popular wallet option. We hope that we’ve helped you decide where to keep your Bitcoin. You should keep your funds in several different locations, use 2FA, pay attention to phishing attempts, and have at least one offline storage option. Additionally, never keep the bulk of your funds on a crypto exchange – a single hack can lead to you losing everything.