Where can I buy Bitcoin in Montreal?
October 1, 2020
How to secure your Bitcoin?
Which wallet should you choose to use?
Over the past years, the value of Bitcoin (BTC) has been continuously increasing. Bitcoin’s listing on the stock market has brought in a large volume of investors looking to make a profit. However, investing in this completely digital currency is not risk-free. In fact, it is nearly impossible to talk about the Internet without making reference to the hackers who are constantly willing to hack the personal data of other Internet users. It is thus crucial to think about how to safeguard one's Bitcoin and other cryptocurrencies.
Why secure Bitcoins?
The obvious answer: to reduce the risk getting your your sensitive information hacked. Indeed, to buy Bitcoin or any other cryptocurrency online, you need to open an account on a trading platform.
However, keeping your digital currencies on the trading platform comes with risks. This is because the site can be hacked, down temporary or closed permanently. In any of these cases, you risk losing all of your funds. Even though these platforms usually have adequate insurance, the risk is still too high and your losses can be considerable.
In order to make sure your Bitcoins are really secured, you should store them in a Wallet of your preference. As you can tell, there are various kinds of wallets, and the level of security differs from one to another. But first, we will explain what the concept of a Wallet is.
When purchasing Bitcoin from a Bitcoin ATM, you can skip the trading platform and store your purchased crypto directly on your wallet from the Bitcoin ATM.
What is a Wallet?
A Wallet is either a website, an app on your smartphone or a software on your computer. It enables you to store all your cryptocurrencies outside the trading platform. In reality, your Bitcoin and other crypto are safely secured in a blockchain and are accessible even offline.
A Wallet is typically made up of a set of two parts: a public address and a private key. The public address is your ID on the site. It is the name you enter in order to receive Bitcoins or other cryptocurrencies. The private key is your password. It will allow you to perform transactions in your wallet. You must thus never share it with a 3rd party.
Once you have logged in with your username and password, you will be asked for verification. This is a set of figures sent to your mobile phone that you must provide on the website. This double authentication is the principal advantage of a Wallet. As stated above, there are different kinds of BTC wallets that we encourage you to explore.
Web-based Wallet
Also known as a Hot Wallet, an online wallet is a website on which you can buy Bitcoins. It operates in the same way as an exchange trading platform. You can however also keep your cryptocurrencies safely there.
You can easily access your funds by just having an internet connection. Nevertheless, Web Wallets are the less secure wallets on the current market. Their weakness stems from the simplicity of their usage. They are in fact the favorite target for hackers and you can very easily risk losing everything that is in your wallet.
Besides, your security keys will not be shared with you. As a result, there is hardly any way to recover your assets in case of an incident. We do not recommend going with this type of web-based only wallet.
Nevertheless, it is the most convenient way to secure your funds temporarily. Some of the most frequently used HotWallets are: Coinbase, and Kraken. If you do end up using this type of wallet to store your Bitcoins, we strongly recommend that you do not keep all of your BTCs on the one platform.
Software Wallet
Wallet Softwares or software portfolios are currently offered in two versions: Wallet Desktops for computers and Wallet Mobiles for cell phones. As their name suggests, they are a software that you can install on your PC or mobile phone. They enable you to store your BTCs on your device.
These Software Wallets are mainly suitable for Windows, Max, Linux and Android (cell phone). Their security level is relatively high. But as soon as you connect to the internet, you are vulnerable to hacking. You will therefore need to think about frequently updating your firewall and installing anti-malware software. Among the most widely recommended are Coinomi, Blockchain.com and Exodus.
In the case of smartphones, the exposure is higher since they stay connected to the Internet for extended lengths of time. Additionally, cell phone thefts are frequent. We advise you to store only a small amount of Bitcoins and other crypto and to avoid using public Wi-Fi.
Hardware Wallet
Hardware Wallets are the "must" when it comes to storing safely Bitcoins or other cryptocurrencies. It is the best tool to secure your assets for the long run. Known as Cold Wallets, these physical wallets will enable you to store your BTCs on a physical device offline.
In reality, your private keys are not disclosed to you. Instead, they are transferred to a very secure physical place. Before performing the installation, you will be asked to remember a "seed" (sequence of words). This is the only way for you to recover your crypto in case of a failure or loss of your Hardware Wallet. You must store it in a safe place at the risk of losing your Bitcoins.
Among the most secured Wallet Hardware we recommend Trezor, Nono X Ledger and KeepKey. They are compatible with the most popular operating systems. One drawback of these wallets, however, is that you can neither sell your Bitcoins nor buy them.
Securing your Bitcoins
There are a number of ways to secure BTCs, but hardware wallets are still the best option. The fact that they do not rely on the internet is their main advantage. They are more difficult to hack. In addition, these Cold Wallets are not subject to the effects of time, as is the case with Paper Wallets. But they won't permit you to do any trading. This is the reason why we suggest that you should always have a few assets on an exchange platform.