A Bitcoin Security Guide for Beginners
by Antony Matthews | Nov 27, 2014 | Crypto News
Have you ever felt anxious about the security of your Bitcoins? With a currency that is entirely digital, knowing how to store your Bitcoins safely from the threat of hackers, scams, and possible data loss is very important.
After all, you are a bank of your own, and there is no consumer protection! Here are the four ways of staying immune to the potential threats in this digital world.
1. Encrypt and back up your wallet
If you do not encrypt your wallet, you may be subject to easily losing your entire Bitcoin collection, and that would be a disaster! Anyone who has access to your computer can simply use your Bitcoin wallet and possibly steal your private keys. Having your wallet encrypted, you will have to enter a password every time you want to access any of the wallet’s features.
After encrypting your wallet, you should back up your wallet.dat file. By doing this, you will keep your Bitcoins secure if anything were to happen to your computer, which ranges from hardware issues to software issues with the wallet. I recommend you saving your wallet.dat file to a USB stick and suggest that you back up this file weekly and with every wallet update. Read more in the “5 Tips How not to Loose Your Bitcoins” article.
2. Store your Bitcoin wallet on a virtual machine or USB stick.
If you are worried that the previous security measures are not good enough, you can always store your wallet on a virtual machine or USB stick. If you use your main computer daily, it is naturally that you might be worried about the security of your Bitcoin transactions. Using a USB stick or creating a virtual machine for the sole purpose of storing your Bitcoin wallet can be a great idea.
3. Educate yourself
While knowing everything about Bitcoin/digital currencies is not entirely necessary for those who use them, having a strong knowledge of how they work can be very helpful. There is an entire wiki section dedicated to Bitcoin – en.bitcoin.it/wiki/Bitcoin. It contains a lot of useful information on how Bitcoin works, what encryption it uses, and what are its possible vulnerabilities.
reddit.com/r/Bitcoin is also a great place to visit if you have any questions to ask the community on what services are best to use and whom you should stay away from.
There are also some online educational resources, such as Coin Academy and a Bitcoin-related course on Udemy.
4. Still not secure enough for you? NFC chip your wallet into your hand!
Well, this one surely is a very futuristic attempt to stay secure…
Besides, this obviously won’t be so secure if you tell anyone about it. You can have a glass chip inserted into your hand that will store your encrypted private key. Recently, Martijn Wismeijer, founder of Mr Bitcoin, a company that installs and operates cryptocurrency ATMs around Europe, decided to use this kind of hardware pieces himself. The chips are capable of holding 888 bytes of data, which is more than enough for storing several private keys and some contact information.
So there are plenty of ways someone can take your money, track your spending, or violate your privacy. Fortunately, you know how to prevent it.
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