Like a physical wallet, we must keep our online bitcoin wallet safe from hackers. After all, it is our hard-earned money. However, how secure your wallet is, depends on how well you care for it. If not for hackers, you may even lose access to it if you misplace or forget your private key. Let us explore a few ways to keep your wallet secure.
5 ways to secure your Bitcoin Wallet
These wallets provide a similar level of protection while being more user-friendly than cold wallets. They are tangible objects that serve as flash drives and have a user’s private keys on them. The signing of transactions is done onboard the device. Thus, the private keys are never exposed, even when it is linked to another device. The PIN or password needed to access the private keys should be kept secure, just like with any other kind of wallet.
Most software and hardware wallets use a single signature key. The money in the wallet can be lost forever if the key is misplaced or stolen. Hence, every transaction must be approved by two or more private keys in multisignature wallets. Three keys can be used to create a multisig wallet, and at least two keys must be entered to access the online Bitcoin wallet.
Users must handle their online bitcoin wallet just like they would a physical one. Both a hot wallet and a cold wallet are recommended when using bitcoin wallets. Keep a small portion of your bitcoin in an online (hot) wallet on your computer or mobile device for daily use. Save the rest in an offline (cold) wallet. This will protect your hard-earned money from hackers.
Despite being entirely digital, bitcoin may still be secured in tangible form. It is possible to keep bitcoin offline with paper wallets, eliminating the risk of hackers or computer viruses stealing the cryptocurrency. A physical record of a wallet’s contents that must be kept safe is created when it is printed. The majority of crypto wallets can generate a paper wallet with keys that have QR codes that can be scanned and uploaded to a software wallet.
In order to use an offline wallet, the wallet software must be installed on a bootable USB or live CD that is virus-free and does not cache, log, or store wallet keys elsewhere. It is essential to keep the cold wallet offline and in a secure location.
Hackers would require physical access to a wallet and the PINs or passwords needed to access the wallet’s money in order to steal bitcoin from cold wallets. In the event that an offline wallet is encrypted, it’s crucial to remember the passcode. Since heirs would not be able to access their inheritance in the event of death, some experts suggest not encrypting this kind of wallet.