Similar to the way you store your cards or cash in physical wallets, Bitcoins are kept in a type of wallet called the digital wallet. These digital wallets are either web-based or hardware-based. Moreover, these wallets can stay on a computer, a mobile device, or you can safely print the addresses and private keys needed for access on a paper.
So, you analyzed the market with something as sleek and advanced as Bitcoin Equaliser. But how do you store all the Bitcoins you have? Well, here are your safest options:
Hot wallet
Online wallets are also called ‘hot’ wallets. These are the ones that run on the internet-connected devices, such as, tablets, phones, or computers. It can cause vulnerability as the wallets generate private keys to the coins on the internet-connected devices.
The hot wallets are extremely convenient in how they let you access and make transactions quickly with your assets, although they aren’t too secure. These are the wallets for smaller amounts of cryptocurrency. Exchange custody wallets, web, desktop, and mobile are the hot wallets.
Cold Wallet
The other safe storage option is the cold wallet. The easiest way to define a cold wallet is to say that it isn’t connected to the internet. Thus, the risk of being compromised is a lot less. You can call these hardware wallets or offline wallets.
Such wallets hold the private key and address of a user on things that aren’t connected to the internet. Typically, these come with a type of software that functions parallelly. Thus, the users get to view the portfolio without risking the private key.
Other Safety Precautions
- Backup
It is necessary to frequently and repeatedly backup the complete Bitcoin wallet. If there is a computer failure, the history of consistent backups can be the only way of recovering the currency. You need to back-up all the files and keep them stored at several locations, such as, on the CDs, hard drive, and USB.
- Software Updates
Your software needs to be updated. Any wallet running on the old version of software is an easy target for the hackers. The latest wallet software is always equipped with better security features. Thus, your Bitcoins are safer than before.
When the software contains all the latest bug fixes and security checks, you might evade major crisis due to the greater security delivered by the wallet. So, to make the Bitcoin safer, update the computer operating system or mobile device consistently.
- Multi-Signature
The idea of multi-signatures has recently gained popularity. It is about gaining approval from a particular number of people (about three or five, at least) to complete a transaction. Therefore, it mitigates the risk of theft because one server or controller is unable to complete the transactions – whether it is withdrawing or sending Bitcoins. The ones who are allowed to transact are pre-decided. So, when someone from that group wants to send or spend Bitcoins, they need the transaction to be approved by others.
Go ahead and assess the safety and convenience of these storage options as per your situation and select one.