Bitcoin is a decentralized currency and is powered by the user and cryptography. Generally, bitcoins are stored in the Bitcoin blockchain network. And because no bank or authority is involved, users themselves have to store their BTC by themselves. This can be complicated and difficult, especially if you have no idea how.
If you’ve bought or are planning to get Bitcoin, here’s a guide on how you can store it safely.
Where Should You Store Bitcoin?
The best place to store and keep your Bitcoin is in a wallet. These wallets have codes that act as passwords that only the user can know. The codes are also called “private keys” and are vital in keeping your money secured. So, losing and getting your key stolen would mean losing your crypto.
There are many types of Bitcoin you can store your funds in. And these types can be classified into hot or cold wallets, which we’ll discuss later after this.
Here are the main types of wallets.
Offline Wallets
These are considered cold wallets or cold storage and aren’t internet-accessible. But, that doesn’t mean that they are physical objects. Instead, an offline wallet’s keys are stored on an offline or physical object, such as a password-protected flash drive. They are like hardware wallets.
Digital Wallets
These are either hardware or web-based wallets which can be used using a phone, a computer, or paper. Digital wallets are accessible anywhere and are great wallets for people who like to take their money when having trips.
Paper Wallets
As the name implies, it is a physical copy or paper printed of your public and private keys. These wallets are straightforward, require knowledge of digital currencies, and can be generated online or offline.
Desktop and Web Wallets
These are wallets that are installed through the software on computers and laptops. They can also be included in browser plugins and website wallets. Most importantly, the security of these wallets depends on the computer’s security.
Hot Wallet
It is one of the two main classifications of Bitcoin wallets. A hot wallet can store only small to medium amounts of Bitcoin that can be used for spending and as walking-around money. The private keys of wallets like these are stored online or in devices connected to the internet since these wallets are stored digitally on mobile devices.
Cold Wallet
The opposite of the hot wallet. Unlike a hot wallet, a cold wallet can store and hold most of the user’s Bitcoin, which can then be used to refill the coins in the hot wallet. Cold wallets are stored entirely offline and are considered the safest storage for Bitcoin.
How To Securely Store Bitcoin
If you have selected which wallet to use for storing, here are some of the best practices you should perform to ensure that your money is safe and secured.
Installing Antivirus Software
All devices that have Bitcoin must have antivirus software that can detect and remove viruses and malware. Good antivirus software will prevent any malware from stealing your money, even if your wallet is connected to the internet or not.
Using Strong Passwords
Protecting your Bitcoin with a strong password is an ideal practice. Typically, a strong password should have at least 16 characters and must contain a unique combination of letters, numbers, and punctuation marks. There are even wallets that may require capitalized letters in your password to make it stronger.
There are many ways you can come up with a strong password. You make your password and check it on a safe checker online to see if it’s strong and secured. You can also make a password with a password manager. For safety purposes, ensure that the password you will use is not used in your other online accounts.
Backing Up Your Wallet
Back up your wallet and do it regularly. Include all keys, even the hidden private keys. So if ever the device you’re using fails, you can use your backup to recover your Bitcoin. You can backup wallets in things such as hard drives, USB sticks, and CDs.
Storing Passwords Securely
The best way to keep your wallet secured is not to let anyone know your password. Losing your password could lead to little to no way of recovering your cryptos. Some of the best ways to secure your password are keeping a paper copy and storing it in a safe place, like a vault.
Importance of Storing Bitcoin
Bitcoin is money, and money should be stored and kept safe. It is a valuable currency nowadays, and it is important to store it properly to avoid theft or loss. From the sections above, bitcoins can be stored in different types and classifications of wallets.
However, the most important thing when storing BTC is to know how to keep it safe once it’s stored. Ensure that your wallet is protected by a strong password and keep that password safe.
