How To Protect Your Bitcoin From Thieves

How To Protect Your Bitcoin From Thieves

After attaining a certain peak in winter 2017 and then receding from popularity. Bitcoin and other cryptocurrency Behemoths have undergone a pronounced surge thru 2019 and 2020, moving beyond their previous all-time highs. This has been contemporaneous with several hacking events. Considering that many investors are new to the system and may not be aware of how their investments may best stay secure, hackers present the new frontier in security threats. ‘Daylight robbery’ best characterises some of the more bare-faced thefts. Tokens were rerouted from one wallet to another in plain sight. ‘How to protect your Bitcoin from thieves’ thus becomes a theme valid for exploration. 

Akin to the way we store cash and cards in a physical wallet, bitcoins may also be stored in something termed a ‘digital wallet’. The latter can be either web-based or hardware-based. The wallet may be found on a mobile device, on a computer desktop, or maintained in safety by printing private keys and addresses paper-accessible. The digital wallets are only as secure as the particular user can make them.

Every wallet has a private key set essential to currency access. Losing the private key or having it stolen from them is the single most compromising situation a user can find themselves in. how fundamental private keys are to bitcoin security cannot be overstated. Other than losing the private key, a user may also lose their bitcoin thru the agency of computer malfunctions. Other disasters in this vein include hacking and the physical loss of the computer where the digital wallet is resident. 

Hot Wallet 

Online wallets are also called ‘hot wallets’. These wallets operate on internet-connected devices such as phones, computers, or tablets. This may lead to susceptibility given the fact that these wallets yield the private keys to user coins on these internet-connected devices. Whereas a hot wallet may be extremely user-friendly in the manner we can access and make transactions with our assets swiftly, they lack security. 

This may seem unrealistic, but the truth remains that folks without sufficient security are apt to have their funds stolen. Not only is this a fairly regular hazard, but it can strike in myriad ways. For instance, engaging in a Reddit gasconade over the amount of Bitcoin you hold is really asking for trouble. 

It would not be too amiss to liken these wallets to a checking account. Unfortunately, they can accommodate only so much. Hot Wallets include desktop, mobile, and the majority of exchange custody wallets. 

Exchange wallets 

A word about exchange wallets. These are exchange provided custodial wallets. The user of this wallet type does not hold the private key to the cryptocurrency obtained therein. Should an incident occur where the exchange is hacked, or the user’s account becomes challenged, you could lose your funds. Cryptocurrency exchanges do not give FDIC or SIPC insurance, underscoring cryptocurrency safe storage paramount. The relevance of the phrase ‘not you keys not your coin’ cannot be overemphasised. Rather than letting hot wallets/exchange wallets be the receptacle for the bulk of your cryptocurrency, the latter category of funds should be put in your personal ‘cold wallet’. 

Cold wallet for Bitcoins

The most storage-friendly option is the cold wallet. A cold wallet is not connected to the internet. Hence, it stands a far more diminished risk of ending up challenged. These may be called hardware wallets or offline wallets. 

These wallets contain a user’s address and private key on something unconnected with the internet. As a rule, these feature software that works parallelly. This enables the user to view their portfolio sans the possibility of risking their key. 

In all likelihood, the most secure way of keeping cryptocurrency offline is thru a paper wallet. This is a cold wallet that you can obtain from specific websites. Subsequently, it produces both private and public keys that we may print out on paper. You may access cryptocurrency in these addresses, contingent upon your possession of that bit of paper. Folk laminate such paper wallets and keep them in safety deposit boxes at their bank. 

Generally, a hardware wallet is a USB drive device that keeps a user’s private keys. This is a significant improvement over hot wallets since that is not affected by viruses that could be infecting one computer. In addition, private keys never are in touch with your network-connected computer or likely susceptible software. These devices are also generally open-source, permitting the community to decide its safety, instead of a company vouchsafing that it is safe to use. 

Cold wallets remain the safest way to keep your Bitcoin or other cryptocurrencies. Essentially, however, they need a bit more expertise to install. 

Shielding yourself from Crypto theft: a practical overview 

It is challenging to vouchsafe cent per cent safety. However, several steps diminish the risk and let your bitcoins stay safe. 

  • Use strong passwords as a rule. It is still appealing to use “12456” and “password”, and the widespread acceptance behind it must count for something. On the other hand, even a moderate algorithm can crack such accounts in a blinking. 
  • Employ Two Factor Authentication – 2FA -like Google Authenticator. However, you ought to make sure that you keep your backup words offline and in a very secure place. Recovering access, should that eventuate, is either quite painful or frankly impossible. 
  • Desist from using your phone number or text messages for account verification. You should eschew the possibility of using your email for account recovery. These may be hacked with relative ease. 
  • Go only for cold storage. It is offline and hack-proof. 
  • Don’t share your private keys/permit others to keep them. It might be easier to let exchanges keep them. Exchanges certainly do have good defences. However, when they do get hacked, your keys inevitably fall into criminal hands as well. 
  • Scrutinise websites, double-check URLs, search for possible scams related to the cryptocurrency or ICO. Trust no address save the one posted on a genuine site as far as token sales are concerned. Also, keep away from links in dubious emails or social media – as scammers might have placed them to inveigle you into fake websites containing malware. Or the clicking of these could even directly download malware too. 
  • The last nail in the scammer’s Dream’s coffin would be strictly following the adage -’ If it’s too good to be true, it likely is’. 

Protecting your Bitcoin from thieves: the importance 

We will give instances to illustrate the rationale behind all the urgency after security measures. 

  • This IT guy from Wales consigned his hard drive to the bin and then elected to sift thru a landfill to recover the same. On the jettisoned hard drive, he had 7500 Bitcoins he had mined. That was certainly a mountain of money sitting in a landfill! Ultimately, he was denied access to said landfill by authorities. Had he used more prudent security measures, he would have been rich today beyond measure!
  • There was this tech newshound who lost the bit of paper with the pin to this hardware wallet. He tried to recover the code with the aid of a hypnotist. To no avail! His travails ended courtesy of a heaven-sent 15-year-old, who actually hacked the hardware wallet, thus permitting access. 
    It’s rather rare to chance upon such genius hackers by ourselves. Instead, we would do better to implement wise security measures. 
  • The final instance will potentially leave you in stitches! There was this wallet owner who perchance came into control of a digital wallet service. In November 2017, Parity, a web browser-compatible Ethereum wallet, was racking its brains trying to fix a bug a hacker had placed in an attempted theft. Parity, while doing this, underwent a flaw in its systems. This in turn, permitted one user to become the sole owner of every multi-signature wallet. When said user found out that he would be accused with the theft of $300 million worth of Ether, he got so unnerved he deleted the code that had transferred ownership of the fund to him. The coins were lost – and the rightful owners have no idea of neither hide nor hair of them. 

Conclusion

There are a number of remedies ready to hand if you know where to look. So lose no time in getting the right security guarantees for your lovely hoard! Whatever you opt for ought to make the security least vulnerable to hackers. Also, you must be able to remember pertinent details if you are going for a paper wallet. Lastly, aware vigilance will put paid to your security concerns. 

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