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Where to Safely Keep Bicoin?

2021-03-29

After getting to a peak price last 2017 and eventually becoming less popular, cryptocurrencies such as Bitcoin experienced another significant surge recently and surpassed all of their past all-time highs. Since this occurred, there has also been an increase in publicized hacking events. Because most of the investors appear new to the system, they may not know enough how to make sure how to secure their investments. Since that is the case, many hackers develop new and ingenious ways to steal funds. A lot of the most famous threats occurred in plain sight. Some of the hacks could have tokens blatantly rerouted and bound for another wallet. The only thing victims could do was watch as the thieves steal their tokens away from them because they can’t do anything about it.

KEY TAKEAWAYS ON HOW CRYPTO WALLETS WORK

  • Offline wallets or cold storage are among the safest methods for holding bitcoin. That is because these wallets are inaccessible through the Internet. However, users still consider hot wallets to be more convenient for them.

  • In case you want to have the safest storage, it would be best to consider using a hardware wallet as this can work on storing cryptocurrency and Bitcoin for the long-term.

  • It can be possible for users to lose their cryptocurrency tokens like bitcoin because of loss of access keys, computer failure, theft, and others.

Similar to the way people keep cards and cash in their physical wallets, bitcoins also get stored inside a digital wallet that could be either web or hardware-based. That wallet can stay on a computer, desktop, and mobile device. You may opt to make it safe by printing out the addresses and private keys on paper. However, how safe could these digital wallets be? The answer to this depends on how the user manages the wallet.

There is a set of private keys in each wallet, and without it, the bitcoin owner would not be able to access the currency. When it comes to bitcoin security, the most significant danger is when the individual user loses the private key or allows it to get stolen. Once the private key gets lost, the user may never see his coins again. Aside from losing the private key, the user can also end up losing bitcoin because of computer malfunctions like a crashed hard drive, hacking, or physically losing the computer that has the digital wallet.

Where to safely keep bitcoin? Here are the best ways people can have their bitcoin safely stored.

Cold Wallet

Cold wallets are the safest option for storing bitcoins. The cold wallet is a wallet that doesn’t connect to the Internet, which is why it has minimal risks of getting compromised. People also refer to these wallets as hardware wallets or offline wallets.

These wallets allow a user’s private key and address stored on something that doesn’t connect to the Internet. It typically comes with software that operates in parallel so that the user will check out their portfolio without placing their private key at risk.

The paper wallet may be the most secure way to have cryptocurrency stored offline. It is a cold wallet that people can generate off of specific websites. It eventually works on producing private and public keys that people can print out on paper. Having that piece of writing is the only possible way to have these cryptocurrencies accessed. Most people have these paper wallets laminated on paper and stored inside a safe in their home or their bank’s safety deposit boxes. There are no user interfaces that correspond to paper wallets aside from the blockchain and a piece of paper.

Typically, the hardware wallet is a USB drive device that stores the user’s private keys securely. Having this can be more advantageous than hot wallets as it never gets affected by viruses on a person’s computer as private keys never get in contact with possibly vulnerable or network-connected computer software. Since these devices typically are open-sourced, it allows the community to decide if it is safe instead of letting the company declare that it is safe to utilize.

The most secure way to have cryptocurrencies like Bitcoin stored is through cold wallets. However, setting them up may mostly require additional knowledge. It can be vital for people who want to own cryptocurrency to understand safe storage, including the concepts of cold and hot wallets.

Physical Coins

There has been an increase in services as Bitcoin investors are now allowed to purchase physical Bitcoins. These are coins that people can buy that comes with a tamper-proof sticker that covers a Bitcoin in a predetermined amount. If you want to buy a physical currency, you would have to include a slight premium over your purchasing Bitcoin value. It owes to the price of the coin’s manufacture and shipment.

Hot Wallet

Hot wallets are what people also refer to as online wallets. These wallets operate on devices connected to the Internet like tablets, phones, or computers. However, having this can be vulnerable as these wallets generate your coins’ private keys on devices connected to the Internet. Despite the convenience of having a hot wallet as it can quickly access and get into transactions, this doesn’t provide enough security.

Despite sounding far-fetched, people who don’t use enough security whenever they use hot wallets could allow others to steal their funds. It can frequently happen in a lot of ways. Because of that, it wouldn’t be wise to boast that you have a lot of Bitcoin in a public forum like Facebook, especially if your hot wallet doesn’t have enough security.

It would help if you only used hot wallets to store cryptocurrency in small amounts. You may have it linked to a checking account. According to conventional financial wisdom, only hold spending money in your checking account and have a bulk of it in savings or investment accounts. The same should be applied to hot wallets as they encompass most of the wallets for exchange custody like the mobile, web, and desktop.

It is vital to note that cryptocurrency in an exchange wallet may not be similar to having it in a personal wallet. Since exchange wallets are accounts that the exchange provides, the user doesn’t hold the private key to the cryptocurrency in this wallet.

Whenever your account is compromised, or the exchange gets hacked, you can lose your funds. Since cryptocurrency doesn’t have FDIC or SIPC insurance, safe storage is vital. The concept “not your keys, not your coin” is repeated continuously in cryptocurrency forums. It wouldn’t be wise to store many cryptocurrencies in hot wallets, especially in exchange accounts. We highly suggest that you have the funds withdrawn to your cold wallet. Since these wallets connect to the Internet, they can get hacked to trade cryptocurrency or make transactions.

Other Security Precautions

Multi-Signature

Multi-signature is a concept that recently became popular as it involves the approval of three to five people for every transaction to happen. Because of this, theft is limited as a single server or controller can’t undergo any transaction. You can decide on the people allowed to transact from the start. When anyone desires to send or spend bitcoins, the other people in the group should approve the transaction.

Software Updates

It can be vital to make sure that the software gets updated as wallets that run on non-updated bitcoin software could end up as a target for hackers. Get the updated version of the wallet software so you can improve your bitcoin’s safety and have a better security system. Once you have an updated software with the latest security protocols and fixes, you can easily evade any crisis as the wallet has improved security. Have your computer or mobile device’s software updated consistently so that your bitcoins will be safer.

Backup

Frequently backup your whole bitcoin wallet so you can recover your digital wallet’s currency whenever your computer fails. Have all of the wallet files stored and backed up on various secure locations like CDs, hard drives, or USBs. Make sure that the backup has a strong password.

Know how crypto wallets work with Binance

The prominent cryptocurrency exchange in terms of users and trading volume is Binance. It announced a P2P (peer-to-peer) crypto without fees trading platform in PHP or Philippine Peso. The company aims to provide Filipinos access to cryptocurrency in their local currency.

It can now be possible for Filipino Binance users to sell and buy ETH, BTC, BNB, USDT, EOS, and BUSD using the Philippine Peso. Binance has a P2P platform that allows Filipinos to do this without any transaction fees. When this gets integrated, it will enable the user to trade crypto in their preferred prices and payment modes. They can even have their crypto assets transferred to a Binance wallet without an added cost.

Because of the platform’s zero transaction fees, it offers an escrow service. It aims to ensure that all of the cryptos will go to the users’ wallets. Binance has a P2P platform that lets users gain more access to various financial services. Included here are spot, margin, lending, and futures trading of Binance.com.

Since its launch in October 2019, Binance’s P2P platform has supported approximately 31 fiat currencies. It was also able to process trades of more than $1 billion. For their Global P2P Merchants Program, the company now actively searches for local merchants with reliable crypto and fiat access. Here, verified merchants enjoy a lot of benefits. It includes exclusive support for customers, VIP discounts, ad transactions and postings, and security deposits without any fees. 

Start learning about Binance P2P trading by downloading the Binance mobile app now.