Bitcoin is a strong and viable currency, but it has been compared to digital cash for a reason. If you leave all your cash in plain sight or in an insecure place, be prepared to have it stolen. Likewise with bitcoins, their security is ultimately up to their owners. If users can’t keep their own wallets secure, there’s a good chance they will lose their digital coins.
If you have a little more than a couple of bitcoins, the pressing question for you is how to store them securely. We’ll list some practical tips based on our personal experience with bitcoins.
General security issues
First of all, don’t put too much trust in online services that offer to store your coins for you. Yes, they are convenient – but any service can be hacked or can simply disappear with your money. Storing your bitcoins yourself (for example, in an offline wallet) is more difficult, but preferable from a security standpoint. You can also use this bitcoin wallet online. This solution will be secure. Additionally, you can buy a plastic bitcoin card for everyday expenses.
All passwords and passphrases to bitcoin wallets and online bitcoin stores must be COMPLETELY complex. Never use the same passwords for bitcoin services that you use for other sites. Learn practices of creating strong passwords. Use special password generators (preferably those of an open-source nature) if you lack imagination. However, as with anything, don’t be fanatical. If you come up with an amazingly complex password for your wallet, and after a while you just forget it – you will lose access to your bitcoins, for good. In most cases it is simply impossible to reset your password.
After you put your bitcoins into an offline wallet, and password protected with safe password, and password securely remembered, make sure that your computer is protected with good reliable anti-virus, and that all last software updates are installed. If you have a lot of bitcoins, you should keep them in a wallet on a computer that is not connected to the Internet at all. And for those who are not at all computer-friendly, there is such an extreme solution as a dedicated storage device or a paper wallet.
Don’t put all your eggs in one basket
Your first principle with bitcoins should be diversification. The best strategy to use them is not to put all your eggs in one basket. Use different approaches for short-term and long-term storage.
The most flexible solutions are often the least reliable. For example, a mobile wallet on your phone or an online wallet is very convenient for everyday payments. However, online wallets are most susceptible to hacker attacks, and it’s easy to lose your smartphone. So, should you give up this convenient storage method altogether? No, but there is absolutely no need to keep all of your bitcoins on your smartphone – a week’s supply is enough. And once a week you can refill your account from a much more reliable and secure long-term storage. You can also use a handy bitcoin prepaid card.
