Looking at the present condition of the market, it is probably safe to assume that bitcoin is not going anywhere anytime soon. In the last few years, we have seen both the value as well as the application of bitcoin increase significantly. Therefore, this is one aspect to take into account while enjoying the benefits of bitcoin.
With changing times, more and more businesses are now willing to accept payments in Bitcoin and other cryptocurrencies. One of the reasons for this shift is the relatively lower bitcoin transaction fees compared to credit card processors. The customers are also ready to pay in bitcoin because these transactions leave behind no information that may lead to identity theft.
Understanding Bitcoin Security:
The security of bitcoin depends on several key elements. Firstly, any of cryptocurrency’s creation and transfer are controlled entirely by cryptography. Regardless of whatever security breaches we have seen, it is undeniable that the bitcoin protocols are extremely robust. Bitcoin makes use of blockchain, a distributed ledger that provides a record of all transactions to the owners. Most importantly, as there is no single point of failure, the blockchain can’t be tampered with.
In spite of these factors, attackers have been able to exploit the vulnerabilities within different bitcoin wallets and exchanges. These are software used for the purpose of bitcoin storage on smartphones or computers. The governments have no role in regulating the bitcoin exchanges and therefore, storing money in these exchanges does not provide adequate insurance and security to the users. Some of you may be aware of how exchanges such as Flexcoin and Mt. Gox had to shut down following attacks where bitcoins worth hundreds of thousands of dollars were stolen.
Dell SecureWorks conducted a study in 2014, revealing that along with the increase in the value of bitcoin, more and more computer viruses capable of stealing bitcoins from wallets have come into existence. The same trend continues five years down the line. Making things even worse, now, the bitcoin owners also have to deal with crypto-mining malware attacks and many other security-related challenges.
Keeping Bitcoin Secure:
Though the number of cyberattacks is continuously on the rise, the best way to secure bitcoin is through the use of cryptocurrency wallets. Ideally, you should install the wallet software on a live CD or a bootable USB. This will ensure that there is no virus in the operating system. This means that the wallet keys are not cached, stored, or logged anywhere.
Treat your digital wallet just like you treat your real wallet. The best approach would be to use two of them. For everyday use, keep just a small amount of coins on your smartphone or computer. The majority of your bitcoins should be kept in a separate wallet maintained offline. This will safeguard your bitcoins from all types of online security threats. However, please make sure that your offline wallet is kept in a physically secure manner. It is a good idea to store them in a traditional bank vault.
Maintaining regular back-ups is also necessary to secure bitcoin wallets from theft, human error, and computer failure. However, in the case of non-encrypted back-ups, they should never be stored online. Finally, do not use anything other than the latest bitcoin software version and use a password comprising of no less than sixteen characters.
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