5 Ways to Keep Your Bitcoin Safe
Few things have experienced the rate of growth that cryptocurrency has. And in particular, bitcoin has exploded in the past decade, becoming a global phenomenon worth billions of dollars.
But most people have yet to invest in bitcoin, due to the many risks associated with it. For one, many don’t know how to buy it. And two, few people know how to store it to keep it safe from hackers and scammers.
But it’s actually quite easy to keep your bitcoin safe. There are a few simple things you can do to ensure your bitcoin portfolio, however large or small, is as secure as possible.
Keep reading below to learn more about the risks associated with holding bitcoin and how to keep bitcoin safe regardless.
Before you can keep your bitcoin safe, you need to know how to purchase it safely. There are numerous ways you can buy bitcoin, some riskier than others.
However, the “safest” methods are also the most restrictive. For example, some people prefer buying bitcoin with financial providers like Paypal, eToro, or even their bank, if it’s offered.
When doing so, your bitcoin stays in your account with that service provider. In some cases, it’s protected in the same way as your cash. So if your account gets hacked and funds get stolen, the company would compensate you.
But, you can’t do anything with your bitcoin purchased from these providers. In fact, you technically don’t own it. When you buy bitcoin from one of these companies, you haven’t initiated a transaction on the blockchain. The company still “owns” the bitcoin, they just put your name on it.
If you try to transfer that crypto to another wallet or service, you’ll be left high and dry, as they don’t want you to do that. All you can do is buy, hold, and sell. It’s purely an investment and doesn’t serve a tangible purpose for you.
It’s technically safe, however, you are putting your trust in that company to allow you to cash out when you are ready. But they have control of your crypto, not you.
If you’d like more control over your bitcoin, try one of these methods for buying it.
Bitcoin ATMs are available nationwide. You can find one in nearly any decent-sized town. They’re often located at popular locations like gas stations and grocery stores.
You can use them to purchase bitcoin with cash instantly. And you can also sell your bitcoin and receive cash on the spot.
But are bitcoin ATMs safe? Absolutely, so long as you follow best practice. When you create an account at a bitcoin ATM, you’ll use your phone number to access your account.
And your bitcoin isn’t stored with the ATM or in a bank account. It’s stored in your own personal crypto wallet.
So to use a bitcoin ATM, you’ll want to arrive at the ATM of your choice with a smartphone, a crypto wallet app, and your government-issued ID.
You’ll quickly verify your identity when creating an account, and then you will be free to buy and sell bitcoin at your will. Click here to find a Bitcoin ATM near you.
ATMs are convenient for when you need to go from cash to bitcoin, without going through a bank account. But most people will also have an online crypto exchange that they use as well.
Popular choices include the likes of Coinbase or Binance, but there are plenty to choose from these days, with varying fees and services offered.
Getting started is the same as using an ATM. You’ll need to create an account by verifying your identity, so have your ID handy. You may even need to submit a photo of your face.
Verification can take a few hours, but most people get approved sooner. This whole process is known as “Know Your Customer” and it helps financial institutions fight fraud and other financial crimes.
Once your account is approved, you can link your bank account and deposit funds to your crypto account. You can then buy bitcoin or other cryptocurrencies like Ethereum or safe moon bitcoin.
Unlike an ATM, your crypto goes into your crypto account at the exchange. They are technically holding custody of it, not you.
The good news, however, is that you can send your crypto anywhere you want, including other service providers or your own crypto wallet, giving you the control.
So how safe is bitcoin? It depends on what you mean. Some people are referring to the financial risk, as the value of bitcoin is very volatile and can drop suddenly.
Others are referring to either regulation associated with crypto or the possibility of losing funds due to theft or scams.
All of these are real risks, but can easily be mitigated.
Regarding volatility, bitcoin, and all cryptocurrencies, are as volatile as they come. It’s the reason that investors can make massive gains, but it’s also the reason that people’s portfolios can plummet overnight.
For example, bitcoin reach a high of $68,000 in November 2021, only to fall to $20,000 in 2022.
But bitcoin has gone through big ups and downs like this before, and always rises when the next bull market comes. As a bitcoin investor, you need to be able to weather storms and not panic sell.
When it comes to keeping your bitcoin locked up and away from thieves, there are a few things to keep in mind. First and foremost, if you are sending bitcoin to a different wallet or recipient, triple-check the receiving address.
If you send crypto to the wrong wallet address, it’s likely gone forever. No one can help you recover it.
Also, if you keep crypto stored in your own personal crypto wallet, you need to be aware of malicious activity. Hackers will set up websites and programs designed to infiltrate your software wallet and drain it of its crypto holdings.
Luckily, there are ways to prevent bitcoin losses entirely. Here are just five of them.
One of the benefits of cryptocurrency is that it’s a peer-to-peer currency. So users can send funds directly to each other without a middleman like a bank or payment processor.
In the old days of bitcoin, many people would buy directly from each other, as exchanges were few and far between, and not very efficient.
Today, however, buying directly is quite risky. It’s easy for scammers to run away with your money before they transfer your bitcoin. So it’s vital that you buy your bitcoin from a reputable source.
Stick with exchanges that prioritize security and have a high-profile team. Coinbase is the oldest exchange in the US and has secured tons of funding from high-profile investors.
Gemini was started by the Winklevoss twins, entrepreneurs who are famous for creating Facebook, yet having Mark Zuckerburg steal their idea.
These teams have serious security measures in place to keep their platform secure and to make the user experience as seamless as possible.
And while no one will insure crypto like banks insure your savings, certain exchanges go to great lengths to earn your trust regardless.
Most crypto enthusiasts would agree that storing crypto in your own personal wallet is the safest option. That way, you truly own the cryptocurrency and aren’t giving custody of your funds to a third party.
If you are getting a software wallet, there are two main types. Browser wallets are extensions added to your web browsers, like Google Chrome or Safari.
These are convenient for wallets that you use frequently to make purchases or send crypto to others, but they are the riskiest. That’s because they are always connected to the internet.
If you click on a bad link and are taken to a malicious website, your wallet could be compromised.
So many choose an app-based wallet. Rather than the browser, these are installed on a phone or desktop computer.
These are less risky since they aren’t directly connected to the internet. However, they are kept on a device that is typically always connected to the internet. So while the risk is lower, it’s still present.
As long as you practice good internet hygiene and keep your device free from malicious software, you should be good to go.
Want maximum security and control of your bitcoin? There’s one perfect solution; a hardware wallet.
Hardware wallets are physical storage devices. You plug them into a computer to use them. They look like little USB drives, and they cost between $50 and $200.
Why are they so vital to keep crypto safe? Because it’s next to impossible for a scammer to retrieve funds from the wallet.
In order for any crypto (or NFTs) to leave a hardware wallet, it has to be plugged into a computer. Then, a passcode has to be typed onto the device, using physical buttons.
Then, each transaction needs to be confirmed by pressing physical buttons again. So basically, only someone who is in physical possession of a hard drive wallet can remove crypto from it. And they need to know the password.
If it’s not plugged into the computer, the wallet is completely offline. This is cold storage. There’s no hack, scam, or piece of software that can hope to access it, making this the safest option for storing crypto.
Hardware wallets are ideal for storing crypto long-term. You can move crypto from your hardware wallet at any time, but it takes a few minutes, thanks to the button pressing.
So if you’re moving crypto multiple times per day, it can get annoying. If you only need to touch your crypto once a week or month, then it’s perfect.
The two most reputable hardware wallets are the Ledger and the Trezor. It’s a tiny investment that can keep your much larger investment as safe as possible. It’s a no-brainer.
Private keys and keyphrases are confusing to most casual crypto users. But these are what secure your crypto wallet.
Each crypto wallet, whether it’s a hardware wallet or software wallet, has both a private and public key. The public key is your wallet address. It’s safe to display this publically.
The only thing it can be used for is to send crypto to your wallet.
The private key is the opposite. Accessing a private key means you can move crypto out of a particular wallet.
Private keys are more complicated and are kept hidden in your wallet. They are secured by a seed phrase, which is essentially an ultra-secure password.
They are often made up of 12 random words, in a specific order. When setting up a new wallet, you’ll need to write this down on a piece of paper (never store it on a device).
Keep this paper secure, as it controls your access to your crypto wallet. Never share your private key or your seed phrase with anyone.
The last thing you can do to keep your crypto holdings safe is to learn how to identify malicious content. Most of the time, malicious content is a hyperlink sent to you.
If you click a bad link, the code on that web page tries to take control of your browser or device and can lead to losing your crypto. It can also lead to you losing private information such as passwords, bank information, and identification information.
To practice good internet hygiene, consider each link you click. Are you clicking an official link? If a stranger sends you a link in a message or email, be very wary before clicking.
If a strange email arrives in your inbox, always check the source. Many scammers will create fake email accounts that mimic real companies. If it doesn’t look official, it probably isn’t.
There you have it, five ways to keep your bitcoin safe. As this asset class continues to grow in popularity, so too will its value increase. This makes it more of a target for hackers and thieves.
Luckily, a few simple practices can make investing in crypto virtually risk-free.
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