The cryptocurrency boom is in full swing and won’t stop anytime soon. With so much potential growth in this unique investment market, digital currency is expected to impact the financial world for years to come. Of all the numerous crypto options on the market, Bitcoin is by far the most well-known and popular among casual and experienced investors.
Bitcoin isn’t like traditional money. Instead of things like the dollar being backed up by a physical item’s value (gold, in that case), Bitcoin is not backed up by any physical material or governmental body. Instead, Bitcoin is a fully digital cryptocurrency you can use to buy goods and services and vice versa.
Since Bitcoin is entirely digital and lacks any sort of federal backing and protections, security is a primary concern. Like all cryptocurrencies, the digital safety measure you take can ensure you don’t lose the cryptocurrency in which you invest. That’s where blockchain comes along, the lifeblood of Bitcoin and its cybersecurity concerns. Blockchain is a coded ledger that tracks your assets. Without blockchain, there is no Bitcoin. That means if you lose access to your digital funds, they’re gone forever.
With that being said, here’s how to avoid that issue by ensuring you’re utilizing the safest ways to store Bitcoin.
What is a Bitcoin wallet?
A Bitcoin wallet is essentially a digital space in which you store your Bitcoin. Because Bitcoin ledgers are built with blockchain, this would be a digital access point to your blockchain for using and saving Bitcoin. Bitcoin can be stored in four different types of wallets. The first is a mobile wallet, accessible from mobile devices. The second, a desktop wallet, is accessible only through desktop computers. A web wallet is stored in the cloud and accessible from a secure location in the digital ecosystem. Lastly, a hardware wallet is an actual piece of hardware like a server or hard drive in which you store Bitcoin and blockchain.
Any security DevOps expert will tell you that there’s a right way to store Bitcoin and a wrong way. The first tip given to many beginning investors in cryptocurrency is to have two digital spending wallets. The first, a hot spending wallet, would contain a small amount of Bitcoin you plan on using to buy things. It’s the equivalent of keeping a few $20s in your physical wallet. You can store this wallet on a mobile device for easy access in online transactions.
A cold spending wallet, however, should hold the bulk of your Bitcoin. This is your savings-style account for crypto, and you can keep this wallet offline. It goes one step further as well, with many storing their cold wallets on hard drives or servers in a fireproof safe.
Online and offline wallets
A deeper definition of safe storing for Bitcoin requires knowledge of online and offline wallets. If a wallet is online, then you can easily access it via one of those types of devices listed above. These are sometimes thought of as the less secure types of wallets because they’re accessible online and that means they’re up for grabs for savvy cybercriminals. Employing proper safety measures and ensuring you secure your online Bitcoin wallet is the top tip Bitcoin’s organization offers new and existing investors. Enhanced DevOps that offer further protections from things like cloud misconfigurations is always a good idea for online wallets. The added protection provides you equally improved insights into any issues occurring in the cloud. This will clearly tell you if someone is trying to access the hot wallet that’s not you.
Inversely, offline wallets are often called cold wallets because they’re not accessible via the cloud or the internet. They’re stored on hardware such as a computer or hard drive that’s not connected to the internet. These wallets are safer from cybersecurity risks but can become targets of malware attacks. These attacks, rather than hacking your data, attack the hardware itself and cause a virus to lock or even transfer your Bitcoin elsewhere.
Below, you can find some of the best hardware cold wallets in the market:
Securing your network
Ensuring proper wallet management, diversifying where you store your Bitcoin, and ensuring you always use a safe connection to the internet are all crucial steps in protecting your Bitcoin. Storing Bitcoin shouldn’t be a hassle, and added efforts like enlisting the help of advanced DevOps programs can really help make the protection of your digital assets a lot easier.
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