Bitcoin has changed how transactions are made online, enabling users to move money via the Internet in a fast and reliable way. Despite the many benefits that Bitcoin offers, there are still some risks associated with it. Without taking the right security measures, there is a chance of you losing your money. Below are some of the necessary precautions that you should take before transacting using cryptocurrencies.
Avoid Using Web Wallets
A web or hosted wallet refers to the type of Bitcoin wallet that is hosted by a third party. They are meant to offer some form of convenience, but some may not provide high-security levels for your cryptocurrency. To avoid the possibility of hacking, it is essential that you avoid using the web wallets altogether. If by any chance you have to use one, do thorough research to find a company that offers excellent security. Also, transfer the money from the wallet as soon as you can.
Store Your Private Keys Offline
It is crucial that you never store your private keys anywhere online. This is because online information can be hacked, which means that your account will be exposed to security threats. You should also not share the keys with anyone else. It is, therefore, advisable to store your keys on a private computer that does not have a connection to the internet. This will reduce the risks of losing your money to malware attacks.
Use Fragmented Backups
It is essential that you create many backup copies of your seed and store them in different locations. Creating a fragmented backup will split the seed into six fragments, four of which will be needed to recreate the seed. Doing this makes it quite difficult for any hacker to access your wallet, given that he has to locate four of the six fragments stored in different locations.
Use Linux Operating System
Saving private keys offline is quite safe, but you will have to connect them to the Internet at some point to make transfers. Use a USB drive to transfer data between your offline and online computers. If possible, make sure that both machines use Linux OS as it is known to resist any USB based threats.
Use a Hardware Wallet
Cold storage is the best way of storing Bitcoin. The hardware wallet is a USB device that features an onboard computer running a special OS. The device is not vulnerable to any hacking attacks as the private keys are stored offline.