Investing in Cryptocurrency or Cryptocurrency trading might sound really exciting. The hot buzz that Bitcoin has created is driving in many investors for cryptocurrency trading. People are buying Bitcoin wallets which allow you to send and receive the Bitcoins, thus enabling trading and other related transactions in cryptocurrencies like Bitcoins.
With the entire buzz around, comes a list of measures that one needs to adopt in order to carry out secure transactions in cryptocurrencies.
Bitcoins are completely different from the other traded stocks in the share market. Before you start trading in cryptocurrencies using the Bitcoin wallet, you need to choose the type of your Bitcoin wallet wisely from the different types of wallets available, based on your requirements. It is highly important for one to take appropriate steps that are required for the security of his or her Bitcoin wallet.
Bitcoin wallets are highly vulnerable to security issues, hence one need to adopt all good practices that will help secure money stored in the wallet.
So how do you secure your Bitcoin wallet?
Below listed are some of the security measures that will help you secure your Bitcoin wallet –
- Keep small amounts –
It is advisable to have smaller amounts of Bitcoins in your Bitcoin wallets. More the number of Bitcoins, greater the loss! Hence it is advisable to keep small number of Bitcoins in the Bitcoin wallet and the rest in a safer environment.
- Back up Bitcoin wallets –
Online Bitcoin wallets are prone to data loss issues, computer failures and other common types of human mistakes, hence it is highly recommended to back up the Bitcoin wallet. A backup of the wallet will be handy in case of theft of computer device or mobile phones. It is a good practice to regularly back up the Bitcoin wallet if the user is highly active and has frequent cryptocurrency trading transactions.
- Encrypt Bitcoin wallets –
While storing offline Bitcoin wallets or back-up copies of Bitcoin wallets, it is highly recommended to encrypt the Bitcoin wallet files. This will prevent unauthorized access to the Bitcoin wallet.
- Use offline wallets –
For a trader who is more of an investment person in cryptocurrencies, it is highly recommended to go for cold wallets also known as offline wallets. These are less vulnerable to the risks that are associated with an online wallet.
- Enable the 2 factor authentication –
With security being the utmost priority, all Bitcoin wallet apps are allowing the 2 factor authentication. This can be in the form of a finger print or a 6 digit code that is often updated regularly. This two factor authentication for your online wallets is a highly secure practice to follow.
- Change wallets –
Yes, this might sound contradicting but it is highly recommended to change the Bitcoin wallets as a whole during regular intervals. Doing this will prevent the wallet security from getting vulnerable.
In spite of carrying out various security measures, there are lot of Bitcoin wallets that are prone to security issues, loss of data, malware attack and so on. Unfortunately, there is no magic wand that will entirely protect the Bitcoin wallet from financial crisis. But in order to protect your financial digital assets, one needs to ensure that all components of the system are equally protected and interact in a secure way by all means.