How To Keep Your Bitcoins Safe
To keep your bitcoins safe, deep cold storage and running your own node is best. But this can be technical for the average person and isn’t for everyone.
Being a Bitcoiner, the first thing you should know is that many people want your bitcoins. On the blockchain, your bitcoins or satoshis are secure, but you have to be vigilant online, especially now the digital files you own are valuable.
For the everyday Bitcoiner owning a hardware wallet is secure enough and using a smartphone wallet is the most convenient way to store bitcoins, but these come with their own dangers.
Both allow easier access and are relatively secure way to keep your Bitcoin safe and liquid. Hardware wallets are safer but less liquid, and smartphone apps have their dangers but as long as you’re vigilant you should be safe.
Bitcoin A Financial Revolution
Bitcoin is a revolution in many ways. Since anonymous creator Satoshi Nakamoto launched it in 2009, Bitcoin is disrupting the very core of the global financial industry.
With Bitcoin, there’s no need for middlemen, such as banks. Some see this as a problem, because they’re used to banks looking after their finances. But what if that bank goes bankrupt? It happens.
Don’t get me wrong, middlemen have their uses, but you pay for that. With Bitcoin we don’t need middlemen, because you are your own bank. But of course, it connects to the Internet, and that can create its own problems for people who are not privacy focussed.
As a Bitcoiner, you have to be conscious of cybersecurity. Imagine working hard to build up your Bitcoin holdings only to wake up one day and discover you have 0 bitcoins!
It happens all too often and it’s not Bitcoin that’s been hacked, but always down to the Bitcoiner falling for a scam. But you can easily keep your bitcoins safe if you are vigilant.
Keep Your Bitcoins Safe: Keep Your Private Keys Private
First rule about keeping your bitcoins safe: Keep your private keys private.
All bitcoins are located with public and private keys. If you have a private key you have the value of BTC associated with it. And if you share your private key with anybody, you are basically giving them your BTC.
Your public key is to be shared with anyone who’s wanting to send you some satoshis. Don’t worry if anyone sinister has this, they can’t access what’s in there because they don’t have the private key
Think of your private key as the details to your credit card, or the keys to your vault. They are that important. Do not share them, and do not store them online. They are the most important factor for how to keep your bitcoins safe.
Write your private key down on some paper, or even engrave it into some steel to ensure it is secure from damage. And keep 2-3 versions of it in different locations just in case.
Sounds extreme? Imagine coming home from work and your apartment is flooded because the clown upstairs forgot to turn his bath off, and all your paper is damaged. An unlikely scenario, but it could happen.
Do Not Share Your Bitcoin Value On Social Media
Bitcoin transactions are not anonymous, but you can protect your privacy. Don’t share your Bitcoin value on social media. I know it sounds crazy to some, but many people like to show off and share their Bitcoin holdings.
That said, you don’t even have to share your holdings on social media for hackers to know you’ve probably got some Bitcoin. Even if you’re in social media Bitcoin groups, the chances are you have some Bitcoin.
So, if you’re active in Bitcoin social media groups, especially with your real name hackers might be trying to target you. That doesn’t mean your bitcoins aren’t safe, as long as you keep your private keys private, and don’t store them online.
In these groups, scammers post invites to things such as trading groups with guaranteed gains, or giveaways, and they’ll want you to send them Bitcoin or ask you for your private keys etc.
Sounds crazy to think people fall for it, but many do. Don’t believe anyone you have met in a social media group, they are likely after your bitcoins.
Keep Your Bitcoins Safe And Don’t Keep Them All In One Wallet
You can store the private keys to your bitcoins in many places, such as hardware wallets, desktop wallets, smartphone apps, or as stated earlier on a piece of paper.
Writing it down on a piece of paper is arguably the safest place to keep your private key, but of course Bitcoin is a digital money, and to use it you need a device of some sort to send and receive it.
Most people use hardware wallets and are a great way to keep your bitcoins safe. Desktop wallets are relatively safe, and most have had no problems, but for $50 or so your bitcoins are much safer with a secure hardware wallet.
Hardware wallets are an everyday cold wallet. They’re not as secure as a deep cold storage, but because they don’t connect to the Internet they are secure enough and easy to use.
Hardware wallets are not really used for everyday spending, but are a great place for a Bitcoiner to store value for the medium to long term.
Because they don’t connect to the Internet, they are the safest everyday wallet used by most Bitcoiners. However, there are scams that people have fallen for even with secure hardware wallets.
There have been email scams from hackers pretending to be the hardware wallet manufacturer. In the email they will ask you for your backup seed phrase, which is basically the password to your private keys.
If ever you get an email of any type from what looks like the hardware wallet manufacturer asking for your backup phrase, it’s a scam. The wallet manufacturer will never want to know this and anyone who does, wants your Bitcoin, so be careful.
Smartphone Wallets Are Most Susceptible But You Can Keep Your Bitcoin Safe If You Take Precautions
Smartphone app wallets are what are known as hot wallets, and these are more susceptible to being hacked. Of course they are, they’re on your smartphone and it uses public wifi more often than your home device.
It’s not advisable to keep all your Bitcoin savings on a hot wallet for obvious reasons. Of course, they make transacting Bitcoin easier, but they also put whatever value is stored in it, more susceptible to being hacked.
If you do choose to use one, be careful when using public wifi, and make sure you have your smartphone and your wallet on the most secure settings.
Use the hot wallet to carry out trading and transaction activities, and only hold enough to see you through this day-to-day activity. And if you suspect your hot wallet might be under attack, you can quickly transfer your bitcoins to your hardware wallet.
Remember, not all hot wallets provide an adequate level of security for your bitcoins. Hackers can steal your funds if enough security is not available. Always do a thorough search and select a good hot wallet that offers extra security features such as private key encryption.
Always Be Vigilant And Don’t Tell Social Media
If you had lots of gold or money at home you wouldn’t tell everyone, so why would you tell everyone you own Bitcoin?
People like to show off, and its those that do that are most at risk. But because it’s digital, your private keys are at risk if you don’t take precautions.
If you only keep the private key on something physical like paper, make sure you have more than one copy of it in more than one location.
If you have a hardware wallet, make sure you have more than one version of your backup seed phrase in more than one location. The seed phrase is basically your private key.
If you get an email about your hardware wallet, always question it. Do not ever give your seed phrase to anybody, even the wallet manufacturer. If anyone wants to know your seed phrase, you are under attack. Be careful.
As for a hot wallet, some are safe, but of course, your phone can be hacked or sim swapped, etc. Anything on your phone is more susceptible to being hacked, so always be vigilant using it and don’t keep your life savings on there.
Pablo is a writer at Bitcoin Maximalist. Originally from Spain, Pablo grew up in the UK, and loves clubbing and gaming. Pablo is a keen Bitcoiner and loves to share his wisdom to help spread the good news of Bitcoin.