Bitcoin usage has grown globally as an investment property, a way to save money and grow wealth, and a substitute in parts of the world where financial services are difficult to access. This has also meant a rise in hacks, thefts, and cyber-attacks. In recent years, a record $3.8 billion in cryptocurrency value was stolen.
Here is how to keep your Bitcoin safe and mitigate the risk of a security breach or an unauthorized party accessing your crypto.
Be a Smart User
There are no known cases of cryptocurrency stored on a blockchain being stolen. This is because of the encryption that blockchains use. Security errors often result from Bitcoin owners not securing their cryptocurrency. This is why following all best practices for Bitcoin security is essential.
Withdraw Your Bitcoin
Do not leave Bitcoin on an exchange. Withdraw it to a wallet. This way, you have more control over its security. The cryptocurrency left on an exchange is exposed to anyone accessing your account.
Conduct Quick Transactions
Conduct quick transactions to minimize the time your Bitcoin is not properly stored in an offline wallet. Once a transaction is finalized, move those funds into your wallet for safekeeping.
Research Exchanges
You can use exchanges to buy Bitcoin. Research any platform you intend to use to buy or sell. Ensure they are reputable and established. Do not use any exchange that you can't verify as legitimate.
Buy and Sell with Bitcoin ATMs
A Bitcoin ATM is easy to access, and no bank account is required. Transactions can be conducted anonymously, and in many ways, they're a far more secure way to trade Bitcoin and another cryptocurrency than through an exchange.
Don't Share Your Bitcoin Holdings Publicly
As tempting as it can be to share your victories, do not ever let people know the amount of Bitcoin you own. If you post about your Bitcoin holdings on social media or public forums, you become an immediate target for hackers.
Software Wallet
A software wallet is convenient but opens you up to security vulnerabilities. Ensure you choose a reputable wallet where you know the encryption is strong. Set up two-factor authentication and input a complex password to maximize security.
Hardware Wallet
For long-term Bitcoin investors, a hardware wallet is the safest storage option for any cryptocurrency. This way, your Bitcoin is kept offline. The only way to hack the wallet is to take it from you physically.
Avoid Newly Launched or Unverified
Whether it is a wallet provider, cryptocurrency exchange, or type of Bitcoin ATM, avoid newly launched brands or companies you cannot verify. There are established providers that you can rely on. Any newly created entity may pose a risk to your Bitcoin storage.
Update Your Wallet Security
When a security patch or wallet update is released, download and enable it. This process can be automated on several wallet brands.
Keep Your Private Keys Offline
Your private keys are how you access what's in your wallet. Keep your private keys stored in a secure location offline. Could you not share them with anyone? If someone has your private keys, that's a vulnerability. Also, if you lose your private keys, it could mean permanently losing your Bitcoin.
Limit Bitcoin Access on Mobile
Mobile devices and wallets are convenient, but if someone gets hold of your phone, they can access any cryptocurrency stored on it. Limit Bitcoin access here. Do not stay connected to your Bitcoin wallet. Always lock your devices with a PIN or biometric security.
Limit Third-Party Integrations
Limit connections to third-party apps or services through your wallet. Any third-party apps with access provides another way for hackers to access your Bitcoin.
The Value of Two-Factor Authentication
Always use two-factor authentication on any Bitcoin wallet or cryptocurrency exchange you use. This adds an important layer of security, as annoying as it can be to navigate as a user.
Avoid Using Public WiFi
Unless you have to tap into public WiFi, such as at a Bitcoin ATM, please do not use it unnecessarily to check what's in your wallet. If you must, take precautions and employ a VPN for added security.
Monitor Transactions
Use blockchain analytics if they are available to you to monitor transactions for suspicious activity. Set up alerts to act quickly if something is detected over time.
Consider Diversifying Your Bitcoin Storage
Do not keep all your cryptocurrency in a single wallet or exchange. Consider spreading your Bitcoin across multiple storage devices.
Be Cautious with Peer-to-Peer Trades
Only buy and sell Bitcoin with trusted individuals and on strong platforms. Do your best to verify the credibility of buyers or sellers to avoid fraudulent activity or theft.
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