Just like conventional currencies, the Bitcoins in your wallet must be secured. To some people, this might sound like a complex task, but Bitcoin has made it possible for you to manage your money in a way that’s very easy for securing your Bitcoin Wallet.
Bitcoin wallets come with outstanding security features that help protect your wallet from hackers and thieves. However, you need to use it correctly if you want to rest assured that your coins will remain safe. Nevertheless, the following are some of the best ways that you can utilize in securing your wallet.
Securing your Bitcoin Wallet using Encryption
The sole purpose of your Bitcoin wallet is to store your Bitcoins, but if you don’t secure it, anyone can gain access and transfer your coins to another address. Fortunately, encrypting your wallet allows you to set a password for anyone trying to access or send your funds.
Basically, this help in protection against theft, put it should be noted that it can’t prevent against key logging software or hardware. However, it is highly recommended that you should create a password that’s strong especially the one that contains numbers, punctuation and letters in both upper and lower case.
Also, ensure that the encryption password is at least 16 characters long, and you should ensure that you never forget it or else your money will be permanently lost.
Securing your Bitcoin Wallet Using Two factor authentication
Online exchanges and wallets are more like online banks. Nonetheless, you should select such services more cautiously. It is necessary to mention that modern online services do not offer adequate security and insurance to be used to store money like a conventional bank. Fortunately, two factor authentication security features can help boost your wallet’s security.
Securing Your Bitcoin Wallet by Backing it UP
Note: this is HIGHLY RECOMMENDED. This is one of the best ways for securing your wallet, online and offline. A back up of your wallet can help protect you against most human mistakes and computer failures. In some cases, backing up your entire wallet sounds like the best alternative given that if you only have a backup for private keys and visible Bitcoin addresses, you might not be able to retrieve a majority of your funds.
Also, encryption of online backups is an excellent security practice because any backup file stored online is more vulnerable to theft. To enhance your security, use secure locations like USB keys and CDs/DVD to make regular backups.
Securing your Bitcoin Wallet by Enable multi-signature authentication
Most Bitcoin wallet clients come with a multi-signature security feature that protects against theft. Ideally, this allows a transaction to require the signature of more than one private key to be appended. A greater ability of this security feature is expected in future, but for now, it is only usable by technical users.
This security feature can also allow leading organizations to provide access to its treasury to its members while only allowing up to 5 individuals to approve the transaction in order to validate it. This way, a thief would have to compromise your online wallet servers and your computer in order to steal your funds.
Securing Your Bitcoin Wallet Offline
This is also well known as cold storage, and it provides top notch security for your savings. Fundamentally, it involves storage of your wallet in a location that’s not connected to any network. An offline wallet can offer protection against computer vulnerabilities when done properly.