How to keep your bitcoin/ethereum/coins safe
Before I tell you safest way you can store your coins, I want you to be aware of how serious bitcoin hacking is and why it's almost never retrieval.
Here are just few articles that involves bitcoin hacking:
- Hacked South Korean Bitcoin Exchange Loses $5.5 Million
- Report says North Korea stole bitcoin from South Korea for years
- Hackers stole $60 million from a bitcoin exchange in a massive heist
- And there is even steemit post from hackers that stole bitcoins
Now these are only few stories and if big exchange and government can get hacked, do you think you're safe? When I first started using cryptocurrency, I lost good portion of my bitcoin due to hacking too. And, it can happen to anyone who are not storing bitcoin safely!
This is a picture from darknet that give user guides on how to hack bitcoin.
So what makes bitcoin or any coins so vulnerable to hack?
If you didn't know, bitcoin and most of the coins is operated through what's called blockchain. I will explain what the blockchain is on later entry, but it's very different from how our banks works. If money gets stolen from our bank account, we can simply call bank and claim fraud. However, for bitcoin, there is no such thing as a bank. And once the transaction goes through and is store in a blockchain, there is no retrieving it back. Also, due to anonymity of bitcoin wallet, you can never know who might have hacked it.
Different ways to store bitcoin
There are four main ways to store your bitcoin. Mobile, Desktop, Hardware, and web. (paper bitcoin works too but that's for stone-age)
How most of you're storing your bitcoin currently is probably through web where you purchased your bitcoin. This includes coinbase, kraken, and blockahin.info. This is most dangerous ways to secure your bitcoin for multiple reason
So what wallet should I use? and how do I keep my coins safely?
I'm a big advocate of hardware wallet. I own keepkey myself and never had problem with it. However, I can't just tell you what wallet to use because everyone has different ideas and resources. It's important to go through each of my post to learn more about all these wallets.
However, these are general guideline you should take
- Always have your private key. Most of web service holds onto private key from you. This is dangerous in lots of ways.
- Make sure it's cold-storage. Having your wallet off the internet makes the hackers job almost impossibleunless they physically sneak into your house and takes it
- Make sure to have 2FA system. 2FA system is way of securing account by validating both email and phone number.
- Make sure there is away to retrieve wallet. What's worst than getting hack? losing your wallet. Whatever wallet you choose, always make sure you have some source of way to retrieve it either by private key or seeds
- Try not to use wallet with other devices. If you have mobile or Desktop wallet, don't go on any sites that might give you virus.
- Diversity your wallet. put some on hardware, put some in web, put some in mobile. Diversity your wallet so once hacker gets control of your one wallet, they don't steal everything. But, it's always important to remember the amount you store and how to access it.
Here is the simple scale charts of each wallet.
| Shared control over your money | Simplified validation | Basic transparency | Two-factor authentication | Basic privacy | Full control over fees | |
|---|---|---|---|---|---|---|
| Mobile | 3 | 5 | 3 | 5 | 5 | 4 |
| Desktop | 5 | 5 | 4 | 5 | 3 | 5 |
| Hardware | 5 | 5 | 5 | 5 | 5 | ? |
| Web | 0 | 4 | 3 | 5 | 4 | 4 |
Due to the length, I'm going to upload information, benefits, and downside of each wallet on different post.
Mobile wallet
Hardware wallet
Web wallet
Desktop wallet
Always remember it's better to spend some time and take proper action than saying sorry to yourself later. Let's not be michael scott.
Thanks for reading and please upvote&follow!!