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"Despite bitcoin ecosystem being relatively young there has been quite a lot of development done in order to store and secure your wealth at maximum safety".
Despite bitcoin ecosystem being relatively young there has been quite a lot of development done in order to store and secure your wealth at maximum safety. How ever not all of the bitcoin users are quite familiar with what is the most secure way to store your bitcoin and this is the reason why we have dedicated our following article to share some background into this and different type of wallets that you can store your bitcoin in.
If you do not hold your wallet private keys then effectively you do not hold any bitcoin!
Rather simple concept to grasp. Private key is equivalent with your safety deposit box key plus pin calculator. Needless to say if someone else has the control over this then they are in the control of your bitcoin. Meaning that countless exchange platforms and hot wallets which claim to be your personal wallets or storage, sure are not that. Most of what exchange platform can be is a custodian of your bitcoin which how ever might still result in you losing your commodity when something hits the fan.
There is 5 different wallets to store your bitcoin in each a little bit more secure than previous!
We are going to list variety of wallets starting from the least secure and finishing with the most secure ones.
Bitcoin Online Wallets – Coming back to our second paragraph which leaves us with the main problem that is online wallets not giving you access to the bitcoin address private keys. Yes, if you do not hold large amounts and want to have access to your bitcoin from any place and any device then those are easy workarounds but not very secure ways of storing our bitcoin. Even rare exceptional wallets that show you private keys aren’t really that secure. Why you ask? Well clearly if someone uploads private keys for you to see then it also means that they have access to all of the same keys in their database. Which means that you can say good bye to your bitcoin if sophisticated enough of a hacker or even a rogue employee decides to rip a company off.
Bitcoin Mobile Wallets – As you may have guessed from the name then these type of wallets are applications based and specifically developed for smart phones. They usually store your private keys and relay access to your bitcoin wallet. It is a convenient option for anyone moving around a lot while still performing many of bitcoin transfers. This variety of bitcoin wallet allows you to scan QR codes and make payments at the shops which accept bitcoin quickly.
Bitcoin Hardware Wallets – These type of wallets are specially developed hardware devices which you can usually plug behind your PC via USB and they hold your private keys electronically while enable you to faciliate transfers and payments. Despite being limited in availability it still is one of the most secure ways to store your bitcoin as of right now. Some of the best known bitcoin hardware wallets currently are Trezor, Ledger USB Wallet & KeepKey.
Bitcoin Paper Wallets – Quite popular and same time top secure way to store your bitcoin despite its simplicity if generated properly. Meaning that private keys are not stored digitally anywhere. How this usually works is that bitcoin wallet is generated along side with two QR images. Out of which one is your public address while other one stores the private key. This makes bitcoin paper wallets being the most secure against cyber attacks since private keys aren’t stored online or in a digital form for that matter.
Bitcoin cold storage
Is the most secure way to store your bitcoin since this type of method stores your bitcoin and private keys on the device which is offline. So as long as you don’t share your private keys with anyone it is impossible for a hacker to access your storage since it is not connected to the internet. Transfers into the hot wallet must be done over secure internet connection in order to provide extra layer of security.
I hope that this gives you all a little bit more knowledge into how bitcoin security works and which is the most secure way to store your bitcoin. How do you store your bitcoin? Do you know of any other methods how one could secure his bitcoin safety?