Bitcoin today is not only the possibility of payment and payment services, but also investment.
Therefore, for many investors, the question arises, how to store bitcoins and where is the best place to do it.
The article discusses a few options and making some recommendations.
This method of storing bitcoins involves installing on a PC or laptop with a special application.
There are two types of local wallets – thick and thin.
The first involve downloading the entire blockchain onto your computer.
Accordingly, for such applications, it is necessary to take care of free disk space.
Slim wallets don’t download the whole system, and refer to it using third-party services. Accordingly, in this case you install a small application.
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Room bitcoin wallet
The user was identified in the system uses the number of the bitcoin wallet. This is the address that is assigned during the registration process.
It remains unchanged throughout time until the user will operate the system. What is this address? This is a set of symbols and numbers. Mobile gadgets this set is usually converted into QR codes.
To the purse, you can bind an unlimited number of addresses, but there is one that is unique and change which after registration will not succeed.
A bitcoin wallet is not a wallet in the truest sense of the word. He has no physical embodiment and is a set of two keys. One public and the second is personal, to be used for signing transactions. Maximum anonymity the user can receive by setting up different addresses for each transaction. skip to content ↑
How secure are these purses
Software applications of this kind are also called hot wallets.
This is due to the fact that they allow for fast transactions due to online connections.
In this lies the main danger when using similar apps. The fact is that with increasing bitcoin exchange rate, intensified hackers.
In 2014 was hacked exchange MT GOX, the result of which was stolen about 7 percent of all bitcoins, which were in General circulation at the time. After that, the exchange was forced to close. The main problem was that the money was kept in hot wallets, which allowed hackers to steal the money of users.
Today most exchanges are already moving to other methods of storage of clients ‘ funds, including cold. Therefore, the chances of hackers is much less.
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Computer application for the storage of cryptocurrency, especially those that are called thick, is relatively secure because the user downloads the entire blockchain.
However, from the point of view of practicality, they are not very interesting.
The thing is, if the user wanted to pay, he just can’t do this, as not have keys.
In this case it is useful to use the mobile app. Are already developed by various companies, as an example – Bitcoin Wallet directly from Google Play.
This app stores the bitcoin address and allows the payment directly from your tablet or smartphone.
How reliable it is hard to say. By and large, if the mobile device has constant access to the Internet, the danger exists. The keys can be stolen, and along with them, and bitcoins. From a security standpoint, mobile wallets are virtually indistinguishable from the other hot. skip to content ↑
There is such an option. You can record the keys on some paper or print on the printer.
It is relatively reliable, because the keys are never stored. Accordingly, even if the evil PC, no one will be able to access cryptocurrency user.
However, a fully reliable and safe, this method cannot be called.
The fact that the paper is not a reliable custodian of information.
It’s flammable and can be deformed from moisture. Accordingly, to store such media is better in the safe.
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The most reliable to date is storing bitcoins on hardware wallets.
Most often, it is a separate device in the form of a stick, on which is written the keys.
Such devices do not have access to the Internet and steal the keys with him almost impossible.
How reliable is it? The only risk is a loss of the device or its breakdown. In this case, to restore access to your wallet will not be possible unless backups. In all other cases, the hardware wallets are much safer than hot. Example – Ledger Nano S. skip to content ↑
The advantages of storing bitcoins
What are the advantages of cold storage of bitcoins?
- The ease of use. Such wallets are designed specifically to work with cryptocurrency. Accordingly, working with them can even novice PC users.
- The software is compatible with most modern operating systems.
- The ability to quickly connect and run ACCORDING to operational transactions.
- A high level of reliability and security.
- The ability to work with any cryptocurrency, including bitcoin.
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How to choose a hardware wallet for storing bitcoins
There are two options – buy a USB flash drive or removable hard disk or to seek the services of companies that offer a ready-made option.
In the first case, the user will have to do all the settings yourself. The second offered a ready-made option with which to work.
Today there are several major manufacturers in the industry which offer the most interesting models – best wallet, Ledger, Keep Key. Now consider these models in more detail.
Best wallet can work without connecting to the Internet. This device has a special display where you can store sensitive information. If the pin is entered incorrectly, the wait time increases. This is one of the security measures.
Another interesting option – Ledger. This is one of the most affordable hardware wallets terms of value. Comes in the form of a stick. The wallet allows you to Transact with various cryptocurrencies. To use this hardware store need a computer with special software. Keep Key little functionality apart from the competition. Work is being done through a special extension in Chrome. To work a large convenient screen. It can be used to verify shipping address, not to be mistaken. Hardware wallet allows you to work without connecting to the Internet. The advantage of this device is that in case of loss or damage, to your data using a passphrase.
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Ways to protect bitcoin wallets
If the user decides to keep their money in hot wallets, there are a few recommendations that allow you to increase the level of protection and security:
- Encryption via a password. Wallets can be protected using a code word. This method is safer than if the user has not used at all no encryption, but it does not give an absolute guarantee.
- Backups. This method will be useful in case if the wallet is lost. Besides, this method is useful when your PC’s hard disk breaks down, for example.
- The distribution of funds. To increase security, you can keep funds partially hot and partially cold wallet. Hot in this case is translated exactly as many cryptocurrencies as you need to pay for goods and services, or replenishment of the trading account on the exchange.
- Multipoles. This method also promotes an increase level of protection. When using such functions for the transaction to be signed by multiple users.
From how correctly you will store your bitcoins, will depend the safety of your investments and capital in General. In the real world we hide your money in a safe place, so why just not to bear such a useful habit in the virtual world?