Securing your Bitcoin wallet is as important as securing the physical wallet.
Same principles apply but with Bitcoin wallet more attack vectors are present.
Because of it, it is more important to pay attention to securing your funds against attackers and malicious software.
Every single Bitcoin wallet should be encrypted with a strong password!
If you use a software that doesn't support password protection, you should look elsewhere.
Encrypting the wallet means that the data file holding private keys (such as Bitcoin Core's wallet.dat) is not readable by default.
When the file gets stolen the attacker can't easily extract keys and spend your bitcoins.
He'd need to brute force the file which takes a lot of time - thus the importance of a strong password. It should be reasonably long (at least 16 chars) and comprises of numbers, lowercase, uppercase and special characters.
Click here for more info on strong passwords.
Multisignature wallet is a type of wallet where at least 2 keys are needed to spend outputs.
The most common use is 2-of-3 multisig wallet which means 2 out of 3 keys are needed. The third key is usually an independent arbitrator in case 2 parties can't come to an agreement.
In a single user setup, you may create a 2-of-2 wallet. A transaction could then be created in your computer and cosigned with your mobile wallet.
An attacker would need to access both of your devices to be able to spend your bitcoins.
Store smaller Amounts
As with your physical wallet, you shouldn't have all eggs in one basket.
It's a good practice to load your regular mobile/computer wallet with smaller amounts and replenish it when needed. The rest should be kept somewhere secure in a cold storage.
We recommend using Bitcoin Trezor for keeping your bitcoins safe.
Keep it Up to Date
Every software has bugs and Bitcoin wallets are no exception.
Make sure to check for updates regularly as they bring new features and most importantly security and stability fixes.
You should use modern operating systems such as Linux, Mac OS X, iOS and Android to keep your software updated automatically.
Always backup your wallet and store it in a safe place.
It prevents you from losing your bitcoins in a case of a hardware and software failure. It also lets you recover funds after your PC or mobile was stolen or lost.
We hope you like the post. Please share it with your followers. Thank you for your support!
Subscribe to our newsletter for weekly thoughts and tutorials. You'll receive a FREE e-book as a bonus!