{"id":294283,"date":"2022-07-29T08:48:37","date_gmt":"2022-07-29T07:48:37","guid":{"rendered":"https:\/\/nigerianfinder.com\/?p=294283"},"modified":"2022-07-29T08:48:37","modified_gmt":"2022-07-29T07:48:37","slug":"how-to-safely-store-bitcoin","status":"publish","type":"post","link":"https:\/\/nigerianfinder.com\/how-to-safely-store-bitcoin\/","title":{"rendered":"How to Safely Store Bitcoin"},"content":{"rendered":"

Cyber-criminals made away with <\/span>$3.2 billion worth of cryptocurrency<\/span><\/a> in 2021.<\/span><\/p>\n

You can lose your Bitcoin because of loss of access keys, computer damage, or hacking. Therefore, you need to select the safest way to store your Bitcoin. The chosen method should also allow easy access for withdrawals and trading.<\/span><\/p>\n

Over the years, Bitcoin investors, miners, and traders have come up with many ways of storing Bitcoin. Here is how to store Bitcoin.<\/span><\/p>\n

Custodial Wallet<\/span><\/h2>\n

A custodial wallet is the most common way of storing Bitcoin. It involves trusting the third party to create a secure wallet and store your Bitcoins.<\/span><\/p>\n

You typically get a custodial wallet when you sign up on a cryptocurrency exchange. The cryptocurrency exchange will provide a username and allow you to create the password. However, the exchange will maintain ownership and overall control of the custodial wallet.<\/span><\/p>\n

Some custodian wallet providers allow users to withdraw or transfer Bitcoin from their network. But, many custodial wallet providers only support the purchase and sale of crypto within the network. This means that you can’t move your Bitcoins anywhere else.<\/span><\/p>\n

Storing your Bitcoin in custodial wallets has some advantages. Easy setup is the main advantage of using a custodial wallet. It’s also easier to access the Bitcoin in the wallet, and the security of custodial wallets is quite strong.<\/span><\/p>\n

Nevertheless, relying on a third party to provide security for your Bitcoin is risky. The provider can decide to limit access to your Bitcoins at any time.<\/span><\/p>\n

Cold Storage<\/span><\/h2>\n

Cold storage involves storing the Bitcoin in an offline storage platform. The Bitcoin wallet should not have access to the internet. There are many cold wallets, but the hardware wallet is the most popular.<\/span><\/p>\n

A hardware wallet includes a tiny device that can link to a computer. The wallet’s main benefit is superb security since hackers cannot remotely regain access to the wallet.<\/span><\/p>\n

The main working principle of cold storage is keeping keys offline unless you are doing a transaction. This means that the private and public keys cannot be accessed via the internet.<\/span><\/p>\n

To create cold storage, you will need to generate a public and private key. You will then generate an offline Bitcoin address that will contain the private and public keys pair. It’s also important to keep the keys away from the internet.<\/span><\/p>\n

Go to a web page that can generate the public and private keys. Once the web page loads fully, turn off your internet connection. You will then generate the keys without exposing them to the internet.<\/span><\/p>\n

Create an offline copy of the web page with your keys. The private key enables you to activate the Bitcoin in your wallet. On the other hand, the private key is essential when signing transactions and sending Bitcoins.<\/span><\/p>\n

It\u2019s a good idea to store the copy in a secure place. The storage area should also be fireproof and not accessible to pets and children.<\/span><\/p>\n

Hot Wallet<\/span><\/h2>\n

A hot wallet is a cryptocurrency storage vault that works through the internet. The private and public keys of the hot wallet are part of a software code that connects to the internet. The hot wallet facilitates the storage and transfer of Bitcoin between users and owners.<\/span><\/p>\n

Users can transfer Bitcoin from a hot wallet regardless of the blockchain. This enables the transfer of different types of cryptocurrencies between users and owners.<\/span><\/p>\n

Hot wallets maximize user privacy by providing a high level of anonymity. You can also expect greater transactional flexibility when you store your Bitcoin on the hot wallet.<\/span><\/p>\n

Website servers provide the tools and software that powers hot wallets. The server allows owners of Bitcoin to send cryptocurrency through online web pages. However, the hot wallet itself cannot store the Bitcoin.<\/span><\/p>\n

The website service will run from any internet-connected device, such as a tablet, desktop, or smartphone.<\/span><\/p>\n

The main disadvantage of hot wallets is security risks. Cybercriminals can hack your hot wallet and steal the Bitcoin. This is something that may not be possible if you are using cold storage.<\/span><\/p>\n

Most Bitcoin owners typically store small amounts of Bitcoin in hot wallets due to security risks.<\/span><\/p>\n

 <\/p>\n

Here are the main types of hot wallets.<\/span><\/p>\n

Mobile Wallets<\/span><\/h3>\n

Mobile wallets are becoming a popular Bitcoin storage method. The wallet is a mobile application that runs on Android or iOS. It can act as a secure archive for the private keys while allowing users to do Bitcoin transactions.<\/span><\/p>\n

Mobile devices have unique features, such as near-field communication (NFC). This feature allows Bitcoin holders to pay using Bitcoin by just tapping their mobile device against a terminal.<\/span><\/p>\n

Mobile wallets leverage parts of the blockchain instead of using the entire Bitcoin network. The mobile wallet will connect to trusted notes within the blockchain to verify transactions. The connection enables the wallet to work with accurate data.<\/span><\/p>\n

Using a few trusted nodes can be disadvantageous since it is difficult to transfer huge funds. It also limits the access of users to their stored Bitcoin. Moreover, hackers can use malware and viruses to gain control of your mobile device and steal your Bitcoin.<\/span><\/p>\n

You can enhance the security of your mobile wallet by adding extra security measures. The most common mobile wallet security feature is two-factor authentication 2FA. With 2FA, you must use a one-time code to access your account.<\/span><\/p>\n

Code generation tools such as <\/span>Google Authenticator<\/span><\/a> will generate the one-time code when you enter your username and password. The code generator will send the code through SMS, phone, or email.<\/span><\/p>\n

Again, putting large amounts of Bitcoin into a mobile wallet isn\u2019t a good idea. The common practice is only to store needed Bitcoin into a mobile wallet.<\/span><\/p>\n

It’s also important to know that there are many scam crypto wallets on the internet. Before you download any wallet and provide your confidential details, conduct due diligence.<\/span><\/p>\n

Web Wallet<\/span><\/h3>\n

A web wallet usually runs on a browser. Bitcoin web wallet holders can only store, transfer, and receive Bitcoin by accessing the wallet through the internet.<\/span><\/p>\n

You can opt to store your web wallet’s private key. Alternatively, the digital wallet site can store the private keys on your behalf.<\/span><\/p>\n

You can withdraw money from your web wallet through a Bitcoin ATM. This is relatively straightforward, especially if you use a <\/span>location finder<\/span><\/a> to know the nearest Bitcoin ATM.<\/span><\/p>\n

Desktop Wallet<\/span><\/h3>\n

A desktop wallet is computer software that uses your laptop or desktop device. Its primary purpose is to act as a storage medium for Bitcoin private keys. Generally, desktop wallets only use essential features that aid in Bitcoin storage and security.<\/span><\/p>\n

Most desktop digital wallets run on Linux, Windows, or Mac systems. These operating systems have varying functions and features that impact the operations of desktop wallets.<\/span><\/p>\n

The primary advantage of a desktop wallet is the high operating power of desktop computers. Unlike mobile or web wallets, desktop wallets can access the entire Bitcoin blockchain. There is no need for it to use a section of trusted nodes to store or verify Bitcoin transactions.<\/span><\/p>\n

Therefore, the desktop wallet provides full access to your Bitcoin without any limitations.<\/span><\/p>\n

Desktop wallets form the core of the Bitcoin blockchain. The wallets can use a complete node to verify all transactions from and to your wallet. However, the wallet will require a lot of computing space on your laptop or desktop device.<\/span><\/p>\n

They are also relatively slower than mobile or web wallets. The slow speed is because the wallet has to complete more calculations when storing or transacting Bitcoin.<\/span><\/p>\n

Desktop wallets are not ideal for Bitcoin users who only do a few transactions per month. This is due to slow speed, high operating power, and space requirements.<\/span><\/p>\n

On the other hand, desktop wallets are the perfect choice for Bitcoin traders. The wallet can support a high volume of transactions.<\/span><\/p>\n

Paper Wallet<\/span><\/h2>\n

A paper wallet is a document that has details of your Bitcoins account. The details include the private key as well as your wallet’s public address.<\/span><\/p>\n

You can print the paper wallets and store them as a QR code. When you want to use the stored Bitcoins, you will just scan the paper document. You will then use the private key to send or withdraw Bitcoin.<\/span><\/p>\n

Cryptocurrency services can generate paper wallets by enabling Bitcoin holders to create their private key and random public address for the Bitcoin account. You will then get a printed copy of the generated keys. Some Bitcoin holders even store their keys on holographic labels.<\/span><\/p>\n

Paper wallets can be a good way to store vast amounts of Bitcoin. Their offline status makes it impossible for hackers to access your paper wallet remotely.<\/span><\/p>\n

Nevertheless, paper wallets do have challenges of their own. The biggest challenge is that anybody can access your Bitcoin if they see the paper.<\/span><\/p>\n

It\u2019d help if you also took precautions to protect the paper wallets from theft. Storing it in a locked safe can secure your paper wallet from prying eyes. The safe should be dry to prevent wear and tear as well as water damage.<\/span><\/p>\n

Learn How to Store Bitcoin<\/span><\/h2>\n

Cyber-attacks and negligence can lead to the loss of Bitcoin. That is why it is vital to learn how to store Bitcoin. Your chosen method will depend on your investment strategy and the number of Bitcoins that you plan to store.<\/span><\/p>\n

If you need more cryptocurrency investment tips and advice, we have tons of articles that might interest you. Feel free to browse around for more related information.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Cyber-criminals made away with $3.2 billion worth of cryptocurrency in 2021. You can lose your Bitcoin because of loss of … <\/p>\n

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