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Bitcoin is a decentralized currency and is powered by the user and cryptography. Generally, investors store bitcoins (BTC) in the Bitcoin blockchain network. Also, since there’s no involvement from a bank or authority, users themselves must store their BTC themselves. This process is complicated and difficult, especially if you have no idea how.
If you’ve bought or are planning to invest into Bitcoin, here’s a simple guide on how you can store it safely.
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Where Should You Store Your Bitcoin?
The best place to store and keep your Bitcoin is in a wallet. These wallets have codes that act as passwords that only the user can know. The codes, or private keys, are vital in keeping your money secured. So, losing or having your key stolen would mean losing your crypto currency.
Bitcoin wallets allow users to store their money online for other online purposes, like trading. If you’re interested in trading, Bitcoin-Trading.io has the best and most secured platforms to choose from.
There are many types of Bitcoin you can store your funds in. These Bitcoin types can be classified into hot or cold wallets, which we’ll discuss later after this.
Here are six most common types of wallets investors use:
1. Offline Wallets
These are considered cold wallets or cold storage and aren’t internet-accessible. However, that doesn’t mean they are physical objects. Instead, an offline wallet’s keys are stored on an offline or physical object, such as a password-protected flash drive. They are similar to hardware wallets for Bitcoin storing.
2. Digital Wallets
These are either hardware or web-based wallets which can be used with a phone, a computer, or paper. Digital wallets are accessible anywhere and are great for people who like to take their money when having trips.
3. Paper Wallets
As the name implies, it is a physical copy of your public and private keys. These wallets are straightforward, require knowledge of digital currencies, and can be generated online or offline.
4. Desktop and Web Wallets
These wallets are installed through the software on computers and laptops. They can also be included in browser plugins and website wallets. Most importantly, the security of these wallets depends on the computer’s security.
5. Hot Wallets
Hot wallets are one of the two main classifications of Bitcoin wallets. They can store only small to medium amounts of Bitcoin that can be used for spending and as well as walking-around money. The private keys of wallets like these are stored online or in devices connected to the internet since these wallets are stored digitally on mobile devices.
6. Cold Wallets
These are opposite of hot wallets. Unlike a hot wallet, a cold wallet can store and hold most of the user’s Bitcoin, which can then be used to refill the coins in the hot wallet. However, cold wallets are stored entirely offline and are considered the safest storage for Bitcoin.
How to Securely Store Bitcoin
If you have selected a wallet to use for Bitcoin storing, here are some of the best practices you should perform to ensure that your money is safe and secured.
Installing Antivirus Software
All devices that are used to store Bitcoin must have antivirus software that can detect and remove viruses and malware. Good antivirus software will prevent any malware from stealing your money, even if your wallet is connected to the internet or not.
Using Strong Passwords
Protecting your Bitcoin with a strong password is an ideal practice. Typically, a strong password should have at least 16 characters and must contain a unique combination of letters, numbers, and punctuation marks. There are even wallets that may require capitalized letters in your password to make it stronger.
There are many ways you can come up with a strong password. Also, you can make your password and check it on a safe checker online to see if it’s strong and secured. You can also make a password with a password manager. For safety purposes, ensure that the password you will use is not used in your other online accounts.
Backing Up Your Wallet
Back up your wallet and do it regularly. Include all keys, even the hidden private keys. So if the device you’re using ever fails, you can use your backup to recover your stored Bitcoin. Generally, you can backup wallets with hard drives, USB sticks, or CDs.
Storing Passwords Securely
The best way to keep your wallet secured is not to let anyone know your password. Losing your password could lead to little to no way of recovering your crypto currencies. For example, one of the best ways to secure your password is to keep a paper copy and storing it in a safe place, like a vault.
Importance of Storing Bitcoin
Bitcoin is money. So, money should be stored and kept safe. It is a valuable currency nowadays. Furthermore, it is important to store it properly to avoid theft or loss. From the sections above, bitcoins should always be stored in different types and classifications of wallets.
However, the most important thing when storing BTC is to know how to keep it safe once it’s stored. Ensure that your wallet is protected by a strong password and keep that password safe.
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