Just like traditional currency, bitcoin too can be lost or stolen. It is crucial to take steps to protect your bitcoin or you may end up in a situation where your bitcoins are coin and there is absolutely no way to get them back. You can’t go to the police because unlike normal theft or burglary, most police are not equipped to handle digital theft, etc.
Prevention is better than cure. Follow the steps below to safeguard your money.
The number one reason people lose their bitcoins is through carelessness. Bitcoins are kept in a digital wallet. There is an encryption and a password. If you commit the password to memory and forget it later on, it is impossible to recover the bitcoins. This has happened to many people and they were never able to retrieve their coins.
The best thing you can do is write down the password to your wallet and keep it under lock and key. If you’re storing the details on a portable hard drive, make a backup and keep that under lock and key too. As always, write down the details. There is no substitute for good ól pen and paper when it comes to this.
It would be a good idea to use paper wallets because of their high level of security.
While all these measures are good to protect your bitcoins from digital theft, one must not neglect threats in the real world. There may be IT savvy thieves who may know that you have bitcoins and will steal them if they have a chance.
Do not go around boasting to every Tom, Dick and Harry that you have bitcoins and they are a dream come true. Someone who is familiar with the system may be looking for an opportunity to relieve you of these coins.
Keep your bitcoin wallet encrypted and under lock and key. Friends, relatives and even strangers may steal your bitcoins. The temptation is always there. So, keep a low profile as far as your investments are concerned.
The internet is not a safe place. If you are surfing online a lot, you may have all types of malware, keylogger software, etc. on your computer without even realizing it. These software will send details to your bitcoins, passwords, credit card details, etc. to the person trying to hack into your account. Anything is possible.
The threats of hacking are very real and this is not a case of “it only happens to others”. It can happen to you too. So, take steps to secure your computer from these attacks. Invest in a good computer security system.
Make sure your computer operating system is clean. Keep only small amounts of bitcoin in your wallet if you’re making purchases online. In this way, even if there is theft, the amount lost will be minimal.
Implement a 2-Factor authentication feature. This means that anytime you try to use your bitcoin, you will receive a text message on your phone with a one-time password. Only after you key in the password, will you be able to access the bitcoin.
These are just some of the ways that you can protect your bitcoin. Always remember that the initial hassle to protect your bitcoins will pay off in the long run.