One of the biggest concerns of new cryptocurrency investors is the aspect of keeping their coins safe. If you’ve recently purchased Bitcoin on an exchange, this is certainly a topic you’ll want to read more about. First, let’s examine the basics of safe coin-keeping.
Own Your Coins… No, Really!
There’s a saying, “If you don’t own the private keys, you don’t own the coins.” This is in reference to storing your coins on online exchanges. There have been too many stories about thousands, tens of thousands of coins falling victim to hackers or thieves. People learned the lesson too late because they thought their coins were perfectly secure. A good example of this is Coinmama. This exchange is a wonderful place for new investors to purchase their very first cryptocurrencies. However, after some time their coins may begin to hold great value. The coins become a liability as they are stores on the website; it just takes one network security breach for them to disappear.
Therefore, if you have a substantial amount of coins stored online, you really want to consider getting those transferred into “cold storage” or an “offline wallet”. It’s really easy to generate an offline paper wallet, and there are an innumerable amount of guides to teach you exactly that. There’s no set-in-stone figure of how many coins you should keep online (to spend) versus how many you should keep safe offline (to save). You’ll have to come up with this figure yourself.
A Lesson Learned
While I’m not a Bitcoin investor, I used to own a great sum of Dogecoin (get your laughs out now, please) and I had heard of many mining pools and exchanges suffering hacks and security breaches. I decided to withdraw my Dogecoin and place them in a hard drive not connected to the Internet. Sure enough, a few weeks later, the mining pool from which I earned those Dogecoin was hacked, and all of the miners lost whatever coins they had earned prior to sending to wallet.
This taught me a critical lesson that I have shared with my investor friends. Don’t trust your coins’ safety if they’re somewhere online.
You might think that your coins are safe stored on your computer. Think again. They’re not safe as long as your computer is accessible via WiFi or a local network. Do some basic searches to read the stories of people’s coins disappearing for no apparent reason. All it takes is a friend of a friend to hear of your investment to employ a few simple methods to breach your personal security and gain access to the wallet on your computer.
When in Doubt, use Cold Storage!
Go to a secure, reputable wallet-generation website (such as BitAddress.org). You can download a copy of that website to a USB flash drive, boot up a computer that’s not connected to the Internet (after ensuring it’s free of malware) and run the script there. It’s so easy to do, and you’ll rest assured that your hard-earned investment is free from the hacks and security breaches and thefts that plague the world of cryptocurrency every day.
5