People tend to buy Bitcoins under these circumstances in hopes of making money. Although Bitcoin’s price has increased, malicious hackers have taken advantage of it by harvesting funds from unwary individuals unaware of its security.
Make sure your online wallet is protected
Joining a cryptocurrency wallet like Coinbase or Binance is the fastest way to get started with Bitcoin and other popular cryptocurrencies. People who are less tech-savvy or new to Bitcoin will find online wallets an attractive option since they hide many of Bitcoin’s technical challenges, including managing private keys and addresses. A few minutes are typically required to set up an online wallet, and you only need a browser, username, and password to access your account.
However, you should not store your cryptocurrency in an online wallet. Using your email and password can allow anyone to access and steal your coins, and phishing emails can be used for this as well. It is also nearly impossible to recover lost Bitcoins, unlike with traditional payment systems.
Wallet security can be enhanced by following these best practices:
Authenticate with two-factor authentication
Two-factor authentication and multi-factor authentication are supported by most online wallets. Your account is linked to a phone, mobile app, or physical dongle when you enable 2FA. It will still take an extra factor for a malicious hacker to access your account even if they have your username and password.
Don’t Use Your Phone Number for 2FA
A few 2FA methods are more secure than others, but most sites support multiple types of 2FA. Hackers can intercept your 2FA passcode if you use SMS passcodes to protect your account. A SIM card paired with a separate, secret phone number will be best if you are associated with a phone number.
Your Bitcoin wallet should have a separate email address
For most of us, we have a primary email account where we send our daily communications, but we also use the same address for Facebook, Twitter, and PayPal. Our family, friends, and coworkers have access to our primary email account. A malicious hacker might eventually gain access to it if they share it with others. The hacker now has one of two items necessary to access your wallet if your online wallet is linked to this email.
For your online wallet, use an email address you do not use anywhere else. This minimizes the possibility of a cybercriminal discovering your account.
Offline wallets are useful
A Bitcoin wallet stores Bitcoins in one or more “addresses.” An address is a string of characters that is unique to a Bitcoin address. Each address has a pair of public and private encryption keys. Bitcoins are sent to your address by users using your public key. Bitcoin transactions are signed with your private key when you want to spend your Bitcoins. You must have the private key in order to prove that the Bitcoins in a particular address belong to you. Keeping your private key in a safe place is therefore the key to securing your Bitcoins.
You give your private keys to the service provider by using an online wallet. Online wallets are easy to use because they give you your private keys. Hackers will also take advantage of that. It is pretty common for these companies to breach user accounts, even though they do their best to protect them.
You can also use offline wallets to control your private keys in place of online Bitcoin exchanges, which will protect you from mass data breaches at Bitcoin exchanges.