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Bitcoin wallet security. 6 best practices you need to know now!

Bitcoin wallet security. 6 best practices you need to know now!

When we acquire cryptocurrencies, we must keep in mind that we are dealing with assets of value, but still digital. Therefore, in order to obtain the complete data, the care and welcome of safety practices of the Bitcoin wallet is fundamental.

We listed six of the best tips that you should practice to keep your wallet protected and not in danger from threats  like attacks on their exchange or your Bitcoins being stolen.

In this article you will learn more about:

  1. Analyze the security features of an online wallet
  2. Keep an offline wallet
  3. Encrypt the backup of your wallet
  4. Have a good antivirus installed
  5. Combine the use of an online wallet with an offline wallet
  6. Consider the risks of a wallet on a mobile device

1. Analyze the security features of an online wallet

No matter how reliable the exchange you chose to do your trades with Bitcoins is, it is important to transfer cryptocurrencies to a wallet so that you have more control over them.

In general, keeping Bitcoins in the custody of the exchange is only recommended for those who do trading on a daily basis or when they are used for arbitrage operations.

If you are looking for on an online wallet, i.e., a hot wallet, you need to research properly  in order to establish that the wallet chosen has a distinct reputation to make sure it is indeed safe. In practice, you are entrusting your assets to the company or organization that administers that wallet.

Therefore, make a rigorous analysis of the security features of the wallet, such as the use of two factor authentication (or 2FA) and recovery phrase. Also remember to create a strong wallet access. The password needs to be long and has letters (both uppercase and lowercase), numbers and special characters or punctuation marks.

Never use the same password as other web services. Plus, if you wish, rely on a password generation program to create a secure enough password.

Another tip is to create a unique email to register in this wallet, with a password as strong as the wallet. This will be used to identify its authenticity and possibly for password recovery, it is important that it is not a weak link in this chain. 

2. Keep the wallet offline

When we keep our Bitcoins on a hot wallet, we are unfortunately subject to certain attacks. Such attacks could be avoided if digital coins were in a disconnected location on the internet.

In addition, besides being safer than a hot wallet, the offline wallets – or cold wallets – are more suitable for those who do not want to do many transactions and want to take responsibility for storing their cryptocurrencies.

Among these wallet options there are the wallet on disk and the hardware wallet. The first option must be installed on a computer that is disconnected. The second is a USB device. That serves exclusively as a wallet and does not allow the installation of any software.

This alternative allows to back up, which makes it possible to recover Bitcoins in case of loss or failure

3. Encrypt the data

If you want to add an extra layer of security to your backup, it’s worthwhile to encrypt this data. This creates an extra password to prevent the theft of your wallet.

Since a connected computer can be infected by malicious software, this is a practice mainly aimed for those who have the wallet on a disk. However there is no way to keep the machine offline at all times.

Numerous encryption tools are available, many of which are free and use known encryption safeguards

4. Use complete antivirus solutions

As much as using encryption is a great wallet protection system, malicious software like a keylogger can expose your passwords.

Therefore, it is crucial that you have a good antivirus installed. Make sure to always use a legitimate operating system. In fact, for those who want to keep the wallet on a computer it would be ideal to save in a distribution such as that of a Linux operating system.

5. Divide your assets between an online wallet and an offline wallet

To maintain the safety of Bitcoins, you can also combine your hot wallet with a  cold wallet. One valid guideline here is to keep a small amount in the online wallet and a considerable percentage in the offline wallet.

The quantity of digital coins in a hot wallet will be the one that you intend to use everyday in order to make purchases with Bitcoin, payments or transfers. Meanwhile, the Bitcoins which are intended to be utilized for the future or even that you would like to save up, should stay in the cold wallet.

Using this strategy, even if Bitcoins is stolen from your online wallet. Most of your assets in crypto will be in a more secure location. By making good use of security systems, multiple wallets are unlikely to be compromised at the same time.

6. The risks of mobile wallets

There are also solutions for the installation of wallets in smartphones, the mobile wallets, which are accessible only from these devices. A mobile wallet has one main advantage: it is portable and therefore always with us. But the risk of loss or theft is much greater than a hard drive inside a computer. Or even a hardware wallet that is protected in a safe place. 

So if you are considering using a mobile wallet, be aware of these risks and avoid leaving too much money in it. We realize that taking care of Bitcoin’s wallets security can be a tough task. So avoid doing things the easy way and go for the smarter route. Put these tips into practice and preserve the assets you’ve earned in cryptocurrencies with ease.

Did you like our security recommendations? So how about you stay tuned for more content like this about virtual coins?

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