Top 3 Safest Methods To Store Bitcoin
The history and progression of cryptocurrencies like Bitcoin have been fascinating, to say the least. The live Bitcoin price spiked significantly during the latter part of 2017, only to subsequently drop in popularity shortly after in 2018.
With the slow burn of dwindling popularity, Bitcoin suffered a heavy collapse in price from 2018 to 2019. Specifically, in 2019, the digital currency closed the year out with an INR value of 5,76,472. Because of the consistent downtrend and relative inactivity for two years, people began to write Bitcoin off as nothing more than a fad.
To the relief of those who had invested in Bitcoin, the Federal Reserve responded to the COVID-19 crisis by printing money for fiscal stimulus. That resulted in a sharp rise in asset prices across the board, and Bitcoin’s INR peaked at 8,23,537 by May 2020.
Eventually, Bitcoin hit an all-time high INR of 56,81,883 toward the end of 2021 due to retail investors and The Federal Reserve causing continued inflation of assets.
These days, people debate less about Bitcoin’s viability and more about the safest methods for storing it. Many investors who are new to the system may not have the knowledge to keep their digital assets secure. Meanwhile, cybercriminals come up with frightening methods to steal money every day.
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With the Bitcoin price running at about $17,438.91 a piece at the moment, investors look to more innovative ways to safeguard their digital assets. Here are the top three safest ways to store your Bitcoins.
A hot wallet is another term for an online wallet. These hot wallets run on devices connected to the internet, including smartphones, tablets, and personal computers. An issue with using these wallets is the possibility of creating a vulnerability since they generate private keys to access your coins connected to them.
While hot wallets are a convenient way to quickly store, access, and make transactions with your Bitcoins, they severely lack security. Hot wallets are easily the most targeted form of storage for cybercriminals because of this lack of security.
That does not necessarily mean you should not use a hot wallet to store Bitcoins. When used correctly, a hot wallet can still be a safe and secure digital currency storage form. It is ideal for storing cryptocurrency in small amounts while storing the rest in other more secure storage devices.
Think of your hot wallet as a current (checking) account. The conventional financial wisdom states you should only store spending money in your current account and the bulk of your money in your savings account. Instead of putting all of your Bitcoins into a hot wallet, using it in conjunction with another storage device or method is advisable.
A cold wallet is arguably the safest option available today for storing Bitcoins. In simple terms, a cold wallet is a type of storage that does not connect to the internet. Essentially, these digital coin wallets are hardware or offline wallets. Because these wallets are offline, it diminishes any chance of cyber criminals breaking into your wallet to steal its contents through the internet.
Cold wallets save the user’s address and private key in an offline location, and it usually comes with software to support it. This way, the user can access their portfolio without the risk of compromising their private key.
A paper wallet is one of the most secure forms of a cold wallet. A paper wallet is generated from specific websites, which create private and public keys to print out on paper. It is only possible to access the cryptocurrency stored in these addresses with that piece of paper.
Many who use paper wallets also laminate them and store them in safety deposit boxes in their bank or a safe at home. You can also follow a similar procedure with a USB, as it does not require connecting to the internet to access it.
The last method is similar to cold wallets but is essentially a more tangible form of cryptocurrency known as physical Bitcoins.
The coin is purchasable and comes with a tamper-proof sticker that covers a predetermined Bitcoin amount. The logic behind this method is to secure your Bitcoins as if you were protecting physical cash. Like physical cash, you can also use them to make purchases provided the vendor accepts Bitcoins.
The only drawback is that you may have to pay a slight premium on top of the physical Bitcoin’s actual value when purchasing. That is usually due to manufacturing and shipment costs for the physical coin.
Use Every Security Measure Available
Before further researching the best and safest forms of storing Bitcoins, you need to understand a universal truth. Nothing digital is 100% secure from vulnerabilities unless you go entirely off the grid.
The best way to combat cyber criminals is by having multiple security measures and contingencies ready while remaining vigilant in protecting these digital assets.