Currencies have always changed their look from time to time. I mean, at one time we would use food and services as payment, then it was gold, followed much later by paper and eventually plastic in the form of credit and debit cards., Now, we have cryptocurrencies like Bitcoin, which have no physical presence at all, but can be just as valuable of all of those other forms of money previously mentioned.
Cryptocurrencies, specifically Bitcoin are very popular right now because their value has soared a few times in recent months, making more people take them seriously. If you don’t know what they are, the easiest way of describing them is as a virtual currency, which has to be ‘mined’ using computer processes and which can be bought and sold through anonymous transactions online.
If you’re looking to invest in Bitcoins, first, you need to know that they’re very volatile and they’re just as likely to decrease in value as gain according to some experts, including Warren Buffett. If that doesn’t put you off, then you also need to know how to keep your coins safe. You’re going to need the following guide for that…
You’ll Need a Wallet
Just like you keep physical cash and cards in a wallet, Bitcoins too are stored in a wallet. There are lots of different wallets available as you can see from this debate on ledger vs trezor – just two of the bets wallets available, Wallets can be on or offline, and they have private keys that you will need to make a note of and keep private if you want your Bitcoins to remain safe. Lose your private key, and you lose everything.
Cold Storage is Smart
When you use an offline wallet to store your Bitcoins, this is known as cold storage. Most people agree that storing your Bitcoins offline is a smart move because it’s much more difficult to hack them when they’re stored offline. Of course, there is always the possibility that someone could steal your Bitcoins in the real world, but if you’re careful, it is probably less likely. If you want the convenience of online storage with the security of cold storage, then consider using both methods, so that if you do get hacked, not all will be lost.
Backup is Essential
Whatever you’re doing to store your Bitcoins, it is absolutely essential that you backup your wallet as soon as You buy Bitcoins and then on a very regular basis after that. Then, if something goes wrong, which it well may, you will have an opportunity to backup your Bitcoins and not end up losing a fortune.
Software Updates Aren’t Optional
As soon as you become a Bitcoin owner, you become a regular software updater too. If you let your wallet software remain un-updated for even a day, you could end up getting hacked, and it’s not just your wallet software you should start updating more regularly either, it’s every piece of software you run on your device because there are few things that can’t be exploited to rob you of your cryptocurrencies.
Encryption is like having an extra lock on your door – it gives you more protection. So. use it to make your Bitcoin wallet even less accessible than it already is. Just make sure that you choose a strong password, but one that you can remember so that you don’t end up losing your Bitcoins to your own security measures.
More and more people are using multi-signature – the process of requiring approval from a number of different people before a Bitcoin transaction goes through to keep their Bitcoins safe. Since more people are involved in the process, there are more checks and balances, and your Bitcoins cannot be taken from you so easily. It can and does slow the process of buying and selling Bitcoins down, but that is a much better scenario than having your coins stolen from you due to being too lax.
The Bottom Line
Bitcoin has been around since 2009, and in that time, it has become very popular with investors and online shoppers, It has also become very popular with hackers and fraudsters, which means that, if you want to invest in a few Bitcoins of your own, you cannot afford to be lax with your security measures, and at the very least, you should be doing all of the things above. Fail to do so, and there is a very real point that you will be ripped off at some time in the future.