The Bitcoin wallet is a secure digital cryptocurrency wallet used to send, receive, and store the bitcoin cryptocurrency. This applies to every other wallet out there. Most coins/tokens have official wallets or a few recommended third-party wallets. For you to interact with your cryptocurrencies, you need a cryptocurrency wallet.
How Cryptocurrency Wallet Works
Technically, cryptocurrencies aren’t stored in wallets. A cryptocurrency wallet holds your private key (which is a secure digital code known only to you) that show your ownership of a public key/a set of keys (which is a digital code connected to certain amounts of virtual currencies).
In other words, your cryptocurrency wallet stores private and public keys which allow you initiate transactions and also act as your ledger of transactions.
Can I Lose My Bitcoins?
Absolutely yes, you can lose all of your hard earned or purchased Bitcoins/any other cryptocurrency if you don’t follow the safety rules we share later in this article.
Losing your bitcoins to a system hack is possible. Whether your keys are stored on your own computer devices, or you have your cryptocurrencies on an online wallet or exchange, cyberhackers are continually trying to break into peoples devices/wallets to steal their private keys which grant them access to their cryptocurrencies. You can also lose access to your cryptocurrencies if you forget to backup your seed. Lastly, you could lose your bitcoins to a scam program.
The good news is there are ways to avoid losing your coins and following these simple rules will give you some piece of mind holding your investments.
How To Protect Your Bitcoin Wallets
There are few proven ways to “keeping the bad guys away.” Though one major purpose of cryptocurrency is to be anonymous (not traceable), the device on which these wallets are being stored are prone to attacks. So you want to do all you can to make sure you guard against such attacks that could cause you a fortune.
Keep Your Private Keys Offline, Have Them Printed On Paper Or A Cryptohex
Obviously, an attack can be launched on any device on a network. Whether the attack is successful or not depends on the security in place. To be safe though, it’s a good idea to have your private keys printed out on a paper.
There’s an option for a paper wallet for your bitcoins that allows you print out your private and public keys directly as they are generated on a paper. This would require you have a printer connected to your PC to do this. Having your cryptocurrency coins access on a piece of paper eliminates the fact that you could be hacked over the internet. Anyone who would steal your coins would have to physically steal that piece of paper to gain access to your coins or tokens.
Cryptohex on the other hand as a more “indestructible” option to store your mnemonic phrase/private keys.
To understand what the Cryptohex is all about, we previously wrote a guide that’ll tell you more about it, click here to read.
The Cryptohex device cannot be easily destroyed as a paper wallet can. The device is made of a metal that can’t be burnt by fire or soaked by water. It can easily be hidden in a door frame or even buried in the ground.
With a set of punches that come with it, you can easily have your phrases punched on the Cryptohex device.
Always Use A Secure Internet Connection
You don’t want to access your bitcoins on a public network. Most public networks are not safe as basic security guidelines are not followed. This makes having your wallet installed on a PC connected to a public network unsafe.
It’s best to assess your cryptocurrencies on a PC that’s on a private network, could be your home or office PC, or anywhere you know how the connection was set up. You want to be sure your network is secured with a password, though this doesn’t keep cyber attackers away, but will give them a tough time while trying to steal your coins.
Have A Strong Antivirus Installed
For those using a Windows unit most especially. You need to have reliable and up-to-date antivirus software installed on your PC. As most of the attacks are made through viruses sending out vital information from your computer, you want to make sure your PC is virus free. Keeping your antivirus updated also eliminates the fear of having new forms of virus attacks which the older version doesn’t prevent.
Use A Strong Password On Your Web Wallets
If you ever choose to have your bitcoins stored on a web wallet (which is not advisable, unless you have just a little for small transactions), use a password that’s hard to figure out.
Don’t use your phone digits or your birthday date like others would do. Use a phrase that only makes sense to you, possibly alphanumeric.
Don’t Click On Spammy Links
This is a way to give your privacy away online freely. Cyber attackers can clone legitimate sites on a slightly different URL to the real one.
You’ll probably think your network isn’t working when you enter your private keys on a spam site, but what happens is the private keys get sent in plain formats and they use it to gain access to your coins.
Don’t believe people impersonating well-known figures such as Vitalik Buterin, John McAfee or Changpeng Zhao.
Never Disclose Your Private Keys
Your private keys are meant for you alone. You shouldn’t give it out to anyone to make transactions for you unless you are passing them down to someone else.
Your security when it comes to keeping your cryptocurrencies safe is in your hands. It is essential to follow the rules to the letter to achieve the best result.
It’s important to note that cryptocurrencies and blockchain technologies are in their early stages, with time we look forward to significant improvements regarding security, anonymity, and transaction times.