How To Store Bitcoins
Bitcoins are an extremely popular form of digital money. They are known as a cryptocurrency because they are virtual assets, a new form of digital currency which is secured through cryptographic encryption.
Bitcoins are used all over the globe as they allow users to make transfers extremely convenient, without the involvement of a third party, and to some degree anonymously and privately.
Many people are excited by the prospect of investing in Bitcoins. People observe the growing public adoption and demand. It’s easy to see the ever growing market value as well. However most people still don’t know how to navigate the process of properly storing Bitcoins.
Fortunately, we are ready to help you out. This article will provide you with guidelines as to how you can store Bitcoins and help set you up for owning some Bitcoin of your own.
To find out how to store Bitcoins, keep on reading.
Before we can brief you about storing Bitcoins, you should know what a Bitcoin wallet is.
A Bitcoin wallet is basically a software program where a Bitcoin owner’s Bitcoin credentials are stored.
Your Bitcoin wallet holds your Public and Private cryptographic keys, and these two pieces of code identify you as being the owner of a portion of Bitcoin on the Blockchain.
How Can I Store My Bitcoins?
You can usually purchase Bitcoins in exchange for real (fiat) currencies, such as $USD, £GBP or €EUR.
But before that, you should first think about purchasing a secure Bitcoin wallet.
This wallet should be backed up and most importantly, it should be secure.
You do not want your Bitcoin to get stolen or lost because if that does happen, you will have no way of recovering it back as it is not physical money, nor is it monitored by a third party.
All that being said however, Bitcoin storage is still very easy once a Bitcoin wallet is purchased.
Hot And Cold Storage Wallets
Bitcoin and crypto wallets come in two primary forms, known as either “hot storage”, or “cold storage”. There is a clear distinction between hot and cold cryptocurrency storage. That is, hot storage is connected to the internet and cold storage is not.
This makes a huge difference. The fact that hot wallets are easily accessible over the web, means that you can use them to quickly access your funds, move funds, trade and buy things. But this also means that they are also more vulnerable to hackers, since anything connected to the public internet has a potential attack surface.
Cold storage however, is much more safe and secure. With cold storage, your Bitcoin and cryptocurrency credentials are offline and cannot be accessed remotely by potential hackers.
Most cold storage wallets come in the form of USB sticks. They can be disconnected from the web by removing them from the USB port of your laptop or desktop, and then stored in a safe place in your home. With cold storage, you can also backup and take multiple copies of your credentials, which is a useful insurance step.
At a very rudimentary level, you can even ‘make’ a cold storage solution of your own and just write down your cryptographic keys on paper and put that in a safe place. As you’re probably already thinking though – that’s not a very robust or secure solution, since the paper records can be lost or damaged by water or fire.
The usage of cold storage wallets is less than that of hot wallets. This is often because people are too trusting of web hosted hot storage options and favour the convenience which they offer. Moreover, most of the hot wallets available are cheap or free while cold wallets cost money. Cold storage wallets are often more of an investment for those who want to secure and hold onto their digital assets for a longer period of time.
Most cryptocurrency trading platforms (such as Coinbase and Binance) will hold your trading assets in hot storage wallets, for ease of access to let you trade quickly. As a user of these platforms, you entrust the providers to secure your funds and make those wallets bulletproof from a cyber security view point. That’s no different from elsewhere on the web, where we often surrender our bank card details to retailers such as Amazon, to make it more convenient for us to re-purchase and buy again from them. That’s great from a convenience point of view, but we all know that even the biggest and most secure of tech firms fail us from time to time. Every few months we hear of another major data breach.
With that in mind, why treat your Bitcoin and Crypto assets any different? If you intend to hold them for a prolonged period, and can make them more secure by using a cold storage wallet, then give it some real consideration.
Where Can I Purchase A Wallet?
Although, cold wallets are not free, they are certainly worth it as they provide you with security.
When you purchase such a Bitcoin wallet, you can rest assured that you will be much less likely susceptible to online hackers. You can purchase a reliable Bitcoin wallet from a range of trusted online sellers.
There are quite a few types of wallets and you can choose one which suits your needs best.
Hot storage wallets are usually free and can even be downloaded free of cost onto your smartphone. Keep in mind though that hot storage wallets are essentially software and pieces of code… and anyone can write code. But that means that big, very reputable firms can also develop hot storage wallets and provide them for free. One of the best of these is probably the Blockchain.io wallet, which downloads onto your phone as a mobile app.
Most people are confused about technical terms and so hesitate to proceed with what could prove to be an amazing investment which is Bitcoins. But they don’t need to be put off. Just a bit of time spent reading up, and going through the steps is enough to set yourself up for success.
You can easily purchase Bitcoin safely, using a platform such as Binance or Coinbase, and using a fiat currency of your choice. You can now also buy an easy to use cold storage wallet with the latest encryption and security standards to secure the digital assets.
It is very important to keep wallets backed up as you are completely in charge without the government or banks snooping on your Bitcoin balance.
With the use of cold storage, you can protect your Bitcoins from potential hackers and be left to enjoy the benefits and opportunities offered by this new cryptocurrency.