Today’s guest post comes from Nick Rojas:
How to Keep Your Cryptocurrency Safe
If you didn’t already know, cryptocurrency is worth a lot. With Bitcoin’s value jumping from $400 all the way to $17,000 in 2017, it and other blockchain cryptocurrencies have seen massive gains.
As decentralized cryptocurrencies skyrocket in value, their holders need to ensure they’re taking the greatest precautions to not put their portfolios at risk. Here’s exactly how you can keep your cryptocurrency safe from digital thieves.
A Quick Explanation of Cryptocurrency
Unlike the money you keep in your bank accounts or the stocks in your trading account, cryptocurrency doesn’t technically exist attached to you. Individuals possess private keys which contain access to addresses containing cryptocurrency. For example, Bitcoin uses 256-bit encryption for its private keys.
With anonymity being one of the greatest advantages of blockchain cryptocurrency, the entire system is decentralized. There’s no organization you can write or contact for misplaced Bitcoin private keys. Your information is stored across countless systems in a peer-to-peer network. Any and all means of protecting your private keys and their access lies with you and you alone.
Diversify Your Wallet
You want to ensure that you’re keeping your cryptocurrency as secure as possible, but also want access to it when necessary.
There’s some advantages of using an online digital wallet. You can keep spending amounts ready to exchange, and it’s quicker to manage. However, keeping the majority of your coin there is a large risk.
Instead, using a cold storage method is the most secure method. Using a storage method that has no direct connection to the internet eliminates the risk of online theft. Those with a large amount tend to utilize these methods, even the largest exchanges.
Another piece of advice is to maintain backups of your wallet regularly. If you’re keeping your cryptocurrency on one device, split it up across multiple storage methods such as USB, discs, and hard drives. You don’t want to have a critical system crash costing you thousands or more.
Practice Good Security Habits
To start with, ensure that you’re using strong passwords for everything. From accessing your wallets to your online accounts, it’s important to make it as difficult as possible for someone to brute force your passwords.
The software you use to monitor and access your private keys should also be updated regularly. Without proper maintenance, it’s easier to gain access to your portfolio, especially if you’re using a popular software suite. Updates should be paid attention to, especially when they detail security patches.
For an added level of security, it’s advised to try multi-signature authorization when accessing your wallet. What this does is requires the confirmation from two or more persons whenever your cryptocurrency is accessed.
As your portfolio grows, you’ll definitely want to ensure that more than one safeguard exists between your cryptocurrency and would be thieves. More and more prying eyes will be interested in seizing your wallet as Bitcoin and other cryptocurrencies fluctuate in pricing. The market is still ripe with opportunity, just make sure your wallet isn’t for online theft.
Guest author bio
Nick Rojas combines 20 years of experience working with and consulting for small to medium business and a passion for journalism to help readers grow. He writes about technology, marketing, and social media for the aspiring entrepreneur. When Nick is not sharing his expertise, he can be found spending time at the beach with his dog Presto. @NickARojas