Protect Bitcoin Wallet: How-Tos

Protecting Bitcoin wallet is vital necessity for every Bitcoin user. Bitcoins are one of the most appealing things for hackers to steal now. In defending your earnings you should follow several simple steps and just be highly precautious.

Use small amounts for everyday needs

In real life you do not carry all your money in the pocket every day. Similar to real funds, you should part your Bitcoins and store small amounts required to cover your everyday spendings in your mobile or online wallet. Distribution of your funds between several depositories makes it impossible to steal all your funds at a time.

Backup your wallet

Backup of the wallet is very important. Keeping backup of Bitcoin wallet in secure place helps to restore it in case of computer failure or multiple human mistakes. It can also help you to restore wallet if your mobile was stolen. Of course in case it was encrypted properly. If you decided to backup your wallet you should take into consideration several suggestions:
  • Backup entire wallet.
    As some of Bitcoin wallets use internal hidden private keys, you need to backup entire wallet. If you only backup your private keys, you may not have possibility to restore most of your funds using such backup.

  • Online backups need to be encrypted
    Any backup stored online is highly vulnerable for theft. Even hardware wallet on the computer connected to the Internet is not protected against malicious software. If you mind presenting your funds to thieves, you should consider encrypting your backups.

  • Several depositories.
    It is great if you have already used the above-mentioned tips to safeguard your wallet. But what would happen if you saved and encrypted your backups but they were lost too? In order to avoid this unpleasant situation you need to store your backups in several secure depositories. It is recommended to consider different medias such as USB keys, CDs, papers, etc.

  • Backups must be on regular basis
    You should backup your wallet periodically. The latest backups have to contain all new private keys and Bitcoin change addresses. If not, you may fail to restore everything properly.

Encrypt your wallet

This advice is perfect in both cases - when you wish to protect either your wallet or your backups. Setting password prevents anyone from withdrawing your funds and helps to protect wallet from thieves. Although it doesn’t protect you from keylogger software or hardware.

Use strong password.

Passwords that contain letters or recognizable words are very weak. Strong passwords contain letters, digits, punctuation marks and are at least 19 characters long. Such passwords can be generated by special programs designed for this case. Although such passwords are hard to remember you should take some time and effort to memorize them.

Never forget your password.

This advice is very applicable if you set password on your wallet. Make sure that you will never forget your password. Unlike the banks, Bitcoin wallets have very limited options for restoring your lost or forgotten password. In case you cannot remember your password it is very likely that you will not be able to restore access to your wallet.

Use offline wallet

Offline wallet or cold storage is said to be the most reliable type of wallet. If made properly it makes it possible to store your Bitcoins with no connection to the Internet. So your wallet cannot be stolen by hackers. Using offline wallet in connection with encryption and backups is also a good practice.

Update is good

Software is always checked and renewed by developers. Bitcoin wallets are not an exception. Latest versions of Bitcoin software are more stable and have more fixes in their security. There may also appear some new features that you will love.

These basic security tips are very important for Bitcoin users. Bitcoin thefts happen frequently, so you should spend some time to learn how to protect funds from being stolen.