Keeping Your Bitcoins Safe

Securing Your Bitcoins

There are basically 2 general types of wallets to keep your bitcoins, and other cryptocurrencies, safe.

There are cold and hot wallets.

In this article, you find out the pros and cons of each type so you can make an informed decision when choosing which to go for.

Hot Wallets

Hot wallets are called hot because they are connected to the Internet which generally means it is easier for hackers to hack into and steal your valuable coins from you.

Examples of hot wallets include those free wallets at your favorite bitcoin exchange website like Coinbase or Kraken, and mobile app wallets.

Desktop wallets are another form of hot wallets especially if you install it on a system connected to the Internet.

However, you do have control over your private keys, and you can encrypt your wallet to prevent hacking attempts.

The only downside to desktop wallets is if your computer gets destroyed or stolen, then you can pretty much say goodbye to your bitcoins.

There have been many instances of theft in hot wallets.

Some hackers have even managed to steal millions of dollars’ worth of bitcoins!

Hot wallets are great for storing small amounts and transacting on the fly.

But if you got quite a sizeable number of bitcoins, then it is best to move these to offline storage or cold wallets.

Cold Wallets

Cold wallets are the preferred storage method of people with a significant amount of bitcoins.

Examples of cold wallet include paper wallets and hardware wallets.

Paper wallets may sound a bit funny at first because we are talking about storing digital currencies here.

But it is precisely why it has been regarded as among the best types for long-term storage.

With paper wallets, there is zero chance of anyone hacking anything on paper.

The downside is it can be stolen, burned, or destroyed.

To keep your paper wallet safe, consider putting it in a safe environment like a safety deposit box.

The second type of cold wallet is the hardware wallet.

It is a physical offline device much like USB plugged into your computer when you need to make a transaction.

There are 3 main popular brands among crypto owners.

These are Trezor, Ledger Nano, and Keep Key.

All 3 will cost you some money but will definitely help keep your virtual treasure chest safe.

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