Bitcoin has grown in popularity over the last few years with many companies accepting it as payment for services. There have been reports over the years that bitcoin is dying. But the cryptocurrency has shown a resiliency that has made it an asset to watch. Individuals and businesses have acknowledged the value that bitcoin has come to hold, especially with the dominance of the online platform. Here is the point when bitcoin security comes in discussion.
Different parties can conduct financial transactions online without even knowing each other. This is one reason why the digital currency has achieved such a high status. However, the relatively novel payment system is unique in many aspects, which makes it challenging for users, especially in matters of security. As with any other form of wealth, you have to ask about bitcoin security. And you have to see if the digital currency is going to be a standard transaction mode for you. What can you anticipate with the most secure bitcoin wallet? Before you start using the currency, learn what qualifies as optimal protection.
What is Bitcoin Security?
Bitcoin is an internet currency. By design, transactions are over the web. This poses significant threats, thus the insistence on using a secure bitcoin wallet. The mining process of bitcoin eliminates the intermediary that is usually present with fiat currency.
Bitcoin users don’t have to deal with banks or government regulations. While this may offer certain advantages, it also shifts the security responsibility to the user. The bitcoin encryption itself is reliable. But the wallets that people use for transactions are exposed to various risks. Users need private keys to spend bitcoins. These keys are stored in wallets that are kept on computers and other devices. The cyber threats that these machines face are apparent.
Who Needs Bitcoin Security?
The fact that users don’t have to deal with all the institutions that are available in the traditional financial ecosystem is one motivation for using bitcoin in different types of transactions. Initially, only a few people used the cryptocurrency because other than the bitcoin security concern. Back then, most individuals didn’t have much hope that the currency would last. Some online merchants have started accepting bitcoin as a form of payment, which is contributing to the upward trend the currency is on.
Of course, because bitcoin is a digital currency, it can only be utilized online. Any company that wants to start accepting bitcoin must first have an e-commerce platform where customers can make transactions. Employees can also ask companies to pay them in bitcoins. This is one of the methods used to stock up on the currency. Whatever your application, bitcoin security should never be ignored.
How to Implement Bitcoin Security
Bitcoin wallet security options are varied depending on the platform in use. Therefore, you must be careful about which ones you apply for the protection of your money.
The lack of regulatory bodies makes it difficult to hold companies or individuals responsible when they commit fraud of any sort. So, this is why bitcoin security should be a priority for any user. However, how do you approach it?
6 Ways to Increase the Strength of Strong Bitcoin Security
1. Two-Tiered Authentication
A 2-factor authentication protocol is one solution you can implement for more secure transactions. Most people make the error of creating just one password when using bitcoin exchange. This compromises bitcoin security. Hackers have all kinds of tools that can pry open accounts with one password systems for protection. Bitcoin exchange services offer account management options where you can activate 2-factor authentication processes.
2. Use a Local Wallet
The greatest step in improving bitcoin security is to avoid leaving the currency in an exchange service. When your money is in the exchange, you don’t have control. Not to mention that hackers easily target exchanges. The most secure bitcoin wallet is a local one that you can monitor. Ensure that your computer has antivirus protection and other measures for the purpose of securing bitcoin wallet. If the wallet is on a machine you utilize for web surfing, the risks are increased tenfold.
3. Pick Wallets Wisely
Another way to get a secure bitcoin wallet is to use one from recommended online platforms. Again, the lack of regulation when using the digital currency allows just about anyone to set up a shop. They can also start providing bitcoin services. It is hard to guarantee your bitcoin wallet security when the site you are using doesn’t have a reputation to back it up. Research the most secure bitcoin wallet before selecting one. Some of the well-revised ones are BlockChain, Mycelium and Waves.
4. Wallet Encryption
After finding a suitable wallet, take measures to encrypt it for enhanced bitcoin security. A password is the safest way of securing bitcoin wallet. Therefore, find a strong one. Note that if you forget the password, then the wallet will be useless. This is why users are advised to use a password management system. You can also use mnemonics to remember. However, if you don’t trust online programs, write it down.
5. Don’t Put Too Much in a Wallet
Regardless of how good you are at securing bitcoin wallet, don’t keep all your money in one. In fact, if the wallet is on your smartphone, don’t store money that you cannot afford to lose. When a wallet gets lost, so do the keys. This means that no one can ever spend the bitcoins even though they are still online. Given the probability of losing your phone or damaging it, that is a high risk to take.
6. Backup Wallets
Backup processes are advised for a secure bitcoin wallet. Your information is on a server, meaning that if one location is unsecured, data is lost. Thus the need for backup procedures. Don’t let natural disaster, a damaged hard drive or computer virus be the reason your bitcoin wallet security is compromised. Find a robust system for secondary storage for your wallet information.
In the End
As it stands, bitcoin is not going anywhere. That means more people will start using it for everyday transactions. With users operating anonymously online, bitcoin security is fundamental for safe transactions. So users should invest in protection measures. It may not be possible to factor in all the threat that bitcoin users have to deal with, particularly because cyber criminals are very resourceful. But you can do something to minimize the risk.
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