The FDIC insurance may protect the money you deposit in your bank account. However, you don’t enjoy this protection with Bitcoin and other cryptocurrencies. Therefore, securing your cryptocurrency is your responsibility. Taking a closer look at Quantum AI reveals its potential in revolutionizing various industries. Unfortunately, some people have lost a significant amount of money to hackers. Others have forgotten their private keys, meaning they can’t access their Bitcoins.
What is a Bitcoin Wallet?
A Bitcoin wallet or a crypto wallet is a service, an app, or a physical device like a USB stick for storing private and public keys that keep cryptocurrency safe. These keys are a complex string of numbers and letters that allows you to decrypt and encrypt when transacting with Bitcoin.
No central authority, such as a central bank or the federal government, issues or insures crypto wallets. A public key compares to a bank account number, while a private key compares to a password or PIN code. You must safeguard your private keys to ensure nobody can empty your wallet.
Most crypto wallets provide several protection mechanisms, including secret phrases and complex passwords. Therefore, hacking a Bitcoin wallet can be challenging, though possible. Also, the rise in crypto wallet hacking attempts should prompt you to take extra safety precautions.
How to Secure Your Cryptocurrency
When buying Bitcoin, consider a reputable crypto exchange. For instance, you can click hier for information about a platform where you can purchase and sell Bitcoin. Some crypto exchanges provide digital wallets for storing Bitcoin. However, avoid holding a large amount of Bitcoin in your crypto exchange account due to its hacking vulnerability. Here are tips to secure your Bitcoins after buying them.
Back-Up Your Crypto Wallet
Once you create a Bitcoin wallet, record its recovery phrase. Self-custody wallets don’t save seed phrases since they want to allow you total control over your crypto asset. That means you lose your funds if you lose the seed phrase before recording it. Once you’ve registered the seed phrase, store it in a safe or lockbox. Avoid saving it where hackers can access it via the internet.
Activate 2-Factor Authentication
Many crypto wallet providers allow customers to leverage 2-FA device-enabled security. This feature enhances the Bitcoin wallet’s safety by requiring users to enter a code that an authenticator app creates to sign in. Therefore, check whether your wallet has this feature and activate it to ensure nobody can sign into your crypto wallet without an authentication code.
Encrypt Your Password
Some Bitcoin wallets allow encrypting the password to prevent unauthorized funds transfers. You can enable this feature on your preferred keys. However, remember that the crypto wallet provider doesn’t store the password. Therefore, you’re responsible for keeping it safe.
Use Facial or Biometric Recognition
Another person will inevitably handle your mobile device with the digital wallet. Therefore, you can use facial or biometric recognition to safeguard your crypto wallet. Most Bitcoin wallets offer optional facial or fingerprint recognition. By activating this feature, you can prevent unwanted access to your cryptocurrency.
Use a Multi-sig Wallet
A multi-sig wallet requires several signatures to confirm a transaction when transferring funds. That means it may need two or more parties to sign a Bitcoin transaction. With this crypto wallet, a thief must access the parties’ devices to transfer the funds.
Watch Out for Phishing and Scams
Most people lose their Bitcoins by sharing their wallet details unknowingly. Therefore, avoid signing into your crypto wallet by following an unknown link whose legitimacy is uncertain. And this includes emails, airdrops, Twitter threads, and Reddit texts. Legit wallet providers and crypto exchanges never ask for private keys, encrypted passwords, and recovery phrases.
The Bitcoins in your crypto wallet are like the fiat money in your conventional bank account. Follow these tips to safeguard your funds and stay up-to-date with crypto safety news.