Last updated on January 2nd, 2018 at 12:00 am
With the recent high profile compromises and hacks in the Bitcoin ecosystem, Bitcoin wallet security has become an issue of utmost importance. We need to make sure that our wallets are not back-doored, and are not vulnerable to hackers.
In addition to this, most of you know that once bitcoins are sent, they cannot be retrieved. This makes understanding Bitcoin security a high priority. Since the Bitcoin network allows for an individual to be at least somewhat anonymous, hackers seem to feel safer, and hence, more and more hackers are resorting to stealing bitcoins.
5 Steps to Secure Your Bitcoin Wallet
Here are a few simple tips which you can implement to make your Bitcoin wallet secure, and improve your Bitcoin security habits:
Encrypt Your Bitcoin Wallet
Encrypting your wallet is very helpful. In the Bitcoin core client, navigate to settings and then click on encrypt wallet. Enter your password and make sure it is very strong. Here are a few tips to help you come up with a secure password:
- Use a password generator, this process will be completely random and your bitcoins will not fall prey to brute force attempts.
- Do not include any personal details in the password; for example your birth date, name etc.
- Try to make the password a mix of upper case, lower case, numbers and symbols.
- Try to make the password as long as possible.
- Make a few physical copies of your Bitcoin wallet password, and put them in safe places. For example, write it down, and hide it somewhere that it will be safe, you will remember it, but others would not look. Also, you can use a computer that is not connected to the internet to create a text file containing your password, then encrypt that text file with a different password that you can remember more easily, and store it on a flash drive/burn it to a CD or DVD.
For An Extra Bitcoin Security, Choose a Multi Signature Bitcoin Wallet
This can prove to be very helpful for companies with leadership divided among different people. Even if a hacker gains access to the wallet, it is still not possible to steal the Bitcoins. In simple terms, a multi signature wallet has a fixed umber of keys, say “m” and it require “n” number of keys to be signed for a withdrawal to be executed. This is also known as “m” on “n” signing. This way, you create another hurdle for the hacker to overcome, thus increasing the security level of your wallet.
Backup Your Bitcoin Wallet Regularly
This is must no matter what happens. As an added security measure, you should also try to spread out your backups across various locations. Using a secure vault is also recommended. Maintaining backups online is not recommended, as they are prone to various threats. If you do choose to store them online, try to use an online wallet that provides multi-sig wallets, and properly encrypts the wallets.
For Maximum Bitcoin Security, Use an Offline Wallet or a Bitcoin Cold Storage Wallet
Some of you may use bitcoins a lot, which means that you are likely to engage in transactions on a daily basis. If you handle a large volume of bitcoins, then Bitcoin security is even more important for you, and it is advised that you should make at least two separate wallets. One wallet will be used to perform your day to day transactions and the other wallet will be an offline wallet which should be used as a cold storage wallet, or savings wallet, so that your funds are safe from online threats. You can create a secure offline wallet by following this tutorial from Best Bitcoin wallet.
Try a Bitcoin Paper Wallet
Paper wallets are the most cost effective, and easy, ways of storing bitcoins. By using paper wallets, you are safe from the ever increasing frequency of malware, viruses and keyloggers, and thus your Bitcoin wallet is safe from them. Moreover, it doesnt take much time to create a paper wallet. You can make a Bitcoin paper wallet through bitaddress.org which is very fast, simple and secure. For extra security, you can even download the source code from their github, which is listed on the homepage, then compile it on a computer that is not connected to the internet, and use that to create your paper wallet.
Overall, with these nifty little tips, you will be much less vulnerable from hackers and malware.