Bitcoin is one of the most popular and widely used cryptocurrency. It has provided the general public a way to make peer-to-peer payments as an alternative to fiat currencies. The market cap of bitcoin peaked in the 2020 covid-19 pandemic and is more than all the other cryptocurrencies. Owing to bitcoin’s extensive popularity and price, individuals and companies have started accepting bitcoin as a medium of exchange. Bitcoin is a global currency, and some international companies have even started to pay salaries to their employees in digital currencies like bitcoin. For more information you can go through this link
Being a digital currency, whose every transaction is performed over the internet, there is always a risk over the wallets’ security that stores digital currencies. Since bitcoin’s birth, there have been many ransomware attacks that have attacked several computers, and as of now, bitcoin has become the currency demanded as a ransom payment. The unique thing about bitcoin is that it is based on blockchain technology to complete transactions and record transactions. Blockchain makes it next to impossible for hackers to hack or manipulate the transactions. Still, it is crucial to secure bitcoin wallets.
What is a Bitcoin Wallet?
A bitcoin wallet is similar to bank accounts, but digital bank accounts are used to store bitcoins. Like in banks, only the customer who has a bank account can check the balance and send and receive money; bitcoin wallets also contain a private key through which users can know their updates and trade bitcoins. There is a wide variety of bitcoin wallets that differentiate in features and functions, and some of them include online wallets, paper wallets, software wallets, hardware wallets, and more.
Before we learn in detail about these types of wallets, we will first learn about the security threats and concerns that are as follows:
- Hackers may try to hack your wallet by using several tricks, mainly using your old password backup. This is a technique in which hackers create a recovery program, and this never makes your wallet safe and secure even if you change your password frequently.
- The main threats include stealing the private keys, secretly knowing the PIN of your mobile device, illegal phishing method, and fooling the wallet users via fake cryptocurrencies.
- One of the most common security attacks includes vulnerable transactions, slow down time, Denial-of-Service, and more.
- More than half of the attacks occur at starting stages of the bitcoin wallet app, and this is when the developer has less computing power than the attacker.
After knowing the common security threats and concerns, let us now focus on some security tips that will ensure the security of bitcoin wallets:
Strong and unique password
You must have used mobile applications, bank accounts, and other things that require users to set a password to ensure the application’s safety or details. In a bitcoin wallet, users must use a strong and unique password that is even difficult to think or guess. A strong password is one that includes special characters, caps, and numbers. Users must never write down or save the password of their bitcoin wallets.
Update software regularly
Users must either set a reminder or make a habit of updating the software of the bitcoin wallet. It is always advised to use the latest version of a wallet to inform about the issues and latest security fixes that will provide more security to your wallet. The updated software will always safeguard the features and functionality of your wallet. In case your wallet isn’t updated, it can be the prime target of most phishers and attackers.
Encrypt your bitcoin wallet
To add a layer of security to your bitcoin wallet, you must encrypt your wallet. A passphrase is used to encrypt the bitcoin wallet as it allows users to set a PIN or password to lock the coins, and then it becomes impossible for hackers to attack your coins unless and until the hacker knows the passphrase of your wallet. Encrypting your bitcoin wallet is important, but along with it, it is important to get connected to either a private network or a secure internet network.