In 2021, we experienced the biggest crypto theft in history, where a hacker stole a monumental $600 million. One of the most significant reasons why people love Bitcoin is that it’s blockchain-based technology and hence super secure. However, it’s the bitcoin wallets that let the cryptocurrency down.
Over the years, we have seen more and more hacks, and cybersecurity has become a major global concern. The worst part is that once your digital currency is stolen, there is no insurance and no way to get it back. This makes having a secure bitcoin wallet the most important thing to have if you’re looking to invest in crypto.
In this guide, we’re going to explore some of the best ways to keep your bitcoin wallet safe. Read on to find out what you can do to prevent theft and keep your bitcoins away from cybercriminals.
Importance of Having a Secure Bitcoin Wallet
Your bitcoins are only as secure as your wallet. Understand that the threat to your digital currency is not through the blockchain but through your chosen wallet or exchange. Now, the competition amongst the growing number of bitcoin wallets is ever so fierce, so you need to be selective.
Essentially, you should use bitcoin wallets developed by reputable companies that have already proven themselves. Still, even with the most secure bitcoin wallet in the industry, there are certain measures you can take to protect your bitcoin.
More importantly, use secure bitcoin ATMs, such as bytefederal.com to ensure that all transactions are safe.
Choose Wisely Between a Custodial and Non-Custodial Wallet
The first important thing you have to consider is whether you want a custodial or non-custodial wallet. A non-custodial wallet allows you to control your private keys and your cryptocurrency holdings. This means that you’ll be responsible for remembering your keys and maintaining security measures to protect your bitcoins.
Forgetting wallet private keys is very common, so you have to be very careful not to lose them. On the other hand, a custodial wallet is a third-party exchange that controls your private keys. When you buy bitcoin, the exchange will give you a sort of “IOU” and hold the cryptocurrency in their wallet.
They will owe you bitcoin until you decide to withdraw it. While some bitcoin exchanges may not be completely secure, a lot of people prefer this option as they don’t have to worry about losing their keys. Besides, you can always use two-factor authentication to put an extra layer of security for your bitcoin.
Don’t Put All Your Eggs in One Basket
When creating a secure bitcoin wallet, it’s never a good idea to put all the investments into one basket. This is even riskier due to the ongoing cyber security threats. Regardless of whether you choose to use hot or cold storage, use several trustworthy bitcoin wallets and distribute your savings.
In case you are compromised, you won’t lose everything you have invested in. Cold storage or a hardware wallet is highly recommended because it’s not connected to the internet. This makes it harder for you to fall victim to hacking and phishing scams.
Back-Up Your Wallet
Backing up your wallet is arguably one of the most critical aspects of keeping a secure bitcoin wallet. Backing up your crypto wallet typically involves writing down your recovery phrase or word seed, which is usually 12 to 24 words long. Some bitcoin wallets will require you to save a file and use it in conjunction with a password.
Others will require you to write down your username and password. Moreover, it’s critical for you to store your recovery phrase security. First and foremost, it’s unwise to store your recovery phrase on the internet, your gallery, or any app in your phone that accesses your photos.
Ideally, you should write down your recovery phrase in a notebook offline and put it in a secure place. Make sure no one can read it unless they have your permission, and don’t share it with anyone either. It’s critical that you never share this place with anyone, even the wallet team.
Technically, no legitimate wallet team will ask you to give them your wallet security phrase. If someone contacts you pretending to be the support team or a technician asking for your recovery phrase, know that it’s going to be a hundred percent scam.
Avoid Downloading Malicious Files
Phishing scams are growing by the day, and it’s important for you to avoid downloading malicious files. Malicious files come in many forms, and they could come from social media websites, YouTube advertisements, emails, and fake apps.
Additionally, it’s important for you to avoid clicking malicious links from unknown senders to protect yourself from bitcoin stealing malware. If you click on a malicious link, a hacker could get into your computer and remotely steal your private keys. Go the extra mile and download anti-malware and antivirus software on your devices to avoid falling victim to these targets.
Avoid Public Wi-Fi
Most cryptocurrency wallets come with mobile phone applications, and these are usually very easy for hackers to exploit. Now, whether you’re using a mobile application or your laptop in a public place like a hotel or coffee shop, it’s advisable to avoid public Wi-Fi. It’s very easy for hackers to breach devices connected to public Wi-Fi, so avoid falling victim.
If you must transact using public Wi-Fi, use a VPN to encrypt your traffic. If you don’t, it’s quite easy for hackers to view your traffic. If you enter your username and passwords during the transaction, they’ll be able to access your bitcoin exchange account.
Keep Up With Software Updates
While sometimes you may perceive software updates to be annoying, they’re very useful and effective. Technically, software updates patch any security vulnerabilities that may have popped up since the last update.
Moreover, most crypto wallets also regularly update their software in order to remain compatible with operating systems. This makes it vital for you to update your operating system and upgrade any updates necessary to keep your bitcoin wallet safe at all times.
Setting Up a Secure Bitcoin Wallet
Setting up a secure bitcoin wallet can be easy, as long as you follow all security measures. Beyond that, it’s essential for you to stay vigilant at all times because no wallet is 100% safe.
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