If we talk about modern technology, cryptocurrency is an integral part of it. It has completely transformed the ways to make payments. Bitcoin has no physical appearance, so one of the biggest doubts about it in the minds of people is its storage. Bitcoins are stored in virtual lockers termed bitcoin wallets. Bitcoin wallets are online, so they are exposed to few online threats. So, you must follow the security tips mentioned below to increase the security of your wallet.
Avoid online wallets
If we talk about bitcoin wallets, there are several options available in the market. There are numerous types of bitcoin wallets, and each one of them has different functions and features. Some of the common bitcoin wallets are web wallets, desktop wallets, paper wallets, mobile wallets, etc. There are mainly two kinds of wallets; hot wallets and cold wallets. If we talk about security, hot wallets are considered to be risky as they are always connected to the Internet.
So, if you want to store bitcoins, you must try to avoid using online wallets as it will expose your bitcoins to online threats such as hacking, phishing. It is easy to hack online wallets; that’s why they don’t offer any insurance to the users. To ensure the security of bitcoins, you must use offline wallets as they are protected from all kinds of online risks. For additional security, you can use two-factor authentication.
Use separate wallets
It is irrefutable that an online bitcoin wallet offers great accessibility, but it is also true that it is not safe. So, the best way to secure your bitcoin is using two separate wallets. If you want to enjoy accessibility as well as excellent safety, you must maintain a hot and a cold wallet. You can use the Bitcoin Compass hot wallet to make transactions and store small amounts of bitcoins as it will allow you to make easy transactions. You can use the other cold wallet for storing massive amounts of bitcoins as it is offline and offers excellent safety.
It is the perfect way to maintain the security of your bitcoin wallet without compromising on accessibility and convenience. You can store bulk bitcoins in a cold wallet and use the hot wallet to transfer small amounts of bitcoin and make transactions according to your needs and requirements. It allows you to store bitcoins in a safe environment and make transactions with great convenience.
Create a backup for your wallet
The bitcoin wallet is computer software in which bitcoin is stored, and software can crash anytime. So, you must create some backups of the wallet so that in case your private keys get lost and your wallet crashes, you will be able to use the wallet and access your bitcoins. Some users only backup, private keys, which is a huge mistake. Some bitcoin wallet has internal private keys that are hidden. So, if you create a backup for private keys only, you will not be able to recover the entire wallet.
After creating a backup, you must store it in a safe location. Storing backups online is not a good idea as it will increase the risk of online theft as any system connected to the Internet is exposed to online threats, viruses, and malware. So, for maximum security, you must store the backups in an offline USB device, paper, or CD.
Use a strong password
One of the most important steps you need to follow to secure your wallet is encryption. An encrypted bitcoin wallet is a wallet that can only be accessed by using a particular password. You can set a password for your wallet, which will ensure that no one else can access it. The only issue with encrypting the wallet is that there are minimum options to recover your password, so you need to be careful while choosing a password and ensure that you never forget it. For extra security, you can write down the password on paper and store it carefully.
You must avoid using simple words such as name, surname, etc., as the password. The password must be a combination of different letters, alphabets, numbers, and symbols. It will enhance security and will make it impossible for anyone to guess the password.