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Crypto wallet or life! Best way to secure bitcoin wallet

14 November 2017 21:00, UTC
Massimo Di Giuda
How to purchase bitcoin - to mine or buy on exchange? The more expensive it becomes, the more often people prefer to choose the third option - to steal it. Therefore, it is necessary to secure bitcoin wallet. Bitnewstoday.com chose 6 most reliable ways to protect crypto savings.
Visitors of the forums know that people mostly complain not about hackers, but blame themselves. Are online bitcoin wallets safe - this question in this case is of secondary importance. Cryptocurrency primarily should be protected from yourself.

1. Make a backup

Technique is important thing, but elevator breaks down more often than the stairs. No matter how far the technology advanced, the good old backup wouldn't hurt. Cryptocurrency is in the risk zone if a wallet file is not backed up. Even if you have secured your equipment from hackers and totally disabled the Internet, your laptop can fall and break. You can accidentally spill coffee on it, or some day thunderstorm can cause interruptions in the network - and your computer will burn.

Seeds can be a sustainable way of making a backup, says Andrew Bard from Computer 21: "Seed is a password that can restore your wallet if you lose the device. Or if your device is stolen, seeds allow you to restore the wallet and transfer your money before a thief can use them. I always tell my students that seed is your money. 100% your money."

2. Don't forget your password

Many people have a choice: to create a strong password that is difficult to keep in mind, or simple, but weak. "Qwerty" or your date of birth should be left for your account in online RPG. Best way to secure bitcoin wallet is at least to have a unique password of 15 characters with numbers, letters and signs. Password can be generated with the help of special programs. Steven Weisman, college professor at Bentley University recommends to add 2FA. "There is a number of services that purport to protect your cryptocurrency, but you should not depend entirely on these services. You also should use strong passwords and two factor authentication whenever you use any of these services," expert says.

A strong password sometimes is hard to remember, but you can write it in a notebook and put it in a box. This is not universal advice, many users fear that the password will be available to intruders. In general, this is of course true, but in order to find the password written on a scrap of paper, you need, first, to know that it exists, and secondly, to spend a lot of time to find it. The choice is yours. Alicia V. Nieva-Woodgate from ANW Networks believes that there is nothing to worry about. "You can write down those words in public places, photograph them and publish on the web. You are the only one who knows their meaning," says expert.

3. Encrypt secret keys

Among numerous wallets, select those that encrypt secret keys. Zak Cole, marketing manager at Apposite Technologies warns that exchanges don't provide users with public keys. "Protecting your private keys is the only way to actually maintain the possession of any cryptocurrency, so needless to say, it's important to properly protect your wallet. A lot of people hold their cryptocurrency in the wallets offered by exchanges like Coinbase, but these wallets don't actually provide users with private keys, which technically means they don't really own any coins at all," expert says.

Secret keys can help to protect your wallet from unreliable persons who also have access to your computer or smartphone. "If you are worried that other people who have access to your computer or phone can take your private key, or use your wallet - you need to set encryption on your private key so a password is required to send any transactions. Additionally, this password needs to be strong because they could just try to crack the password after moving your encrypted key."

Cryptocurrency wallet must also be protected from scammers, says Cameron Bowen. "People always discuss security that blockchain and cryptocurrencies have. They're right, the actual blockchains themselves are very secure. It's almost impossible to dismantle or forge a transaction on blockchain. The problem lies in cryptocurrency wallets. These wallets are very similar to email addresses in their format. There is a password and usually a two factor authentication process to access your wallet," expert says.

4. Install antivirus

Even top secure bitcoin wallets won’t help you if keyloggers read your strongest password. This is part of the program or equipment that records all the keyboard actions. Keyloggers can be either software or hardware. Software-based keyloggers can be stopped by antivirus. Antivirus can also help to recognize and block phishing links, which allow hackers to get access to passwords. Hardware  keyloggers are much harder to detect, they are inserted into USB drives or in a keyboard wire without an owner knowing. You can see them only if you deliberately inspect the computer. A good way to keep your password safe in this case is to enter it on the virtual keyboard.

5. Keep cryptocurrency on cold wallets

You must have at least two wallets. The wallet for storage should be cold. Only in this way cryptocurrency will be really safe, believes content marketing manager Sara Ramler. "Distribute your tokens between your “hot wallet” that you use daily for trading, various transfers, etc. and a “cold wallet” which is for long term storage. A cold wallet should be installed on a device (laptop or an old mobile) that is never connected to the Internet, i.e. an air gapped device", recommends specialist.

On hot wallets it is better to keep only those means which are necessary for daily transactions and payments. There you can even have a bigger part in order not to pay transfer fees. "Cold storage is by far the best way to protect your wallet. Nano Ledger type of products is the first thing that comes to mind", says Lawrence Richardson from ZeroSum.

6. Be careful with Wi-Fi

If a wallet is installed on a laptop, smartphone or tablet, then be careful with connecting to unknown wi-fi networks. Unprotected networks can intercept incoming and outgoing data and access files on a gadget, says Abhishek Pitti, CEO of Nucleus. "Beware of malicious Wi-Fi connections and phishing websites that can compromise your data. Don’t leave your devices unattended and ensure you have adequate security measures for these devices as well. In the end, it all depends on how you manage your wallet, and using common sense approach to data safety goes a long way in securing online wallet," says expert.

Similar advices on how to secure a crypto wallet are given by the financial analyst of FxPro Alexander Kupitsikevich: "Cold storage of secret keys, storage of keys on special hardware bitcoin-wallets is connected via USB, but the keys are not transferred to a PC or network (hardware wallet). Wallets with multi-signatures are cheaper than devices, since they are implemented programmatically. It is necessary to constantly monitor the software updates: antiviruses, wallets protection programs. Do not keep on a hot wallet more than you are ready to lose."

Among other things, take cryptocurrency out of your wallet before handing over this gadget to the service.