Cryptocurrency has taken the world by storm and is growing every single day. This means that new people are coming to the scene every day which is awesome, but newcomers need to stay aware of how they can protect their new investments.
Hardware wallets are a great option to safeguard your bitcoin or other cryptocurrencies, and we will briefly cover why it is important that you safeguard your bitcoins and how hardware wallets do exactly this.
What is a cryptocurrency wallet?
These digital assets and the ownership of them is defined by holding a secret – a private key, which grants you access to them.
Keeping this digital secret, while still having access to it can be proven hard. If a malicious hacker gains access to this private key all your funds can be gone within seconds. At the beginning of bitcoin, many people carelessly lost their private keys or wrote them online resulting in various hacks.
Today, however people are more aware of the importance of safeguarding their private keys and thus hacks are less common, but still prevailing. Using a hardware wallet – a little dedicated security device is definitely the safest and best option for users to secure their cryptocurrency funds.
How does a hardware wallet work?
Hardware wallets are small USB devices that can store your desired cryptocurrency offline safely from hackers. It is a great way to provide secure key management while still keeping your funds accessible and easily usable.
Hardware wallets are however pricier than storing your cryptocurrency online and usually cost around 70-150$. In order to justify this price tag, we will cover the various options you have to store your bitcoin and determine what option is the best and safest for you.
Option 1: Buy bitcoin and store them on an exchange
Storing your bitcoin on an exchange is a convenient and easy way for many users new to the crypto field. However, why is this not a good option to securely store your funds?
If you don’t have any private key to your bitcoin you are actually not the owner of them. The exchange simply has an obligation to give you the bitcoin if you ask, but on the blockchain, they are the owners of the bitcoin itself. Exchanges have been hacked previously and this could happen again in the future. Therefore, an option where you store them with a private key gives you full ownership and more security.
Option 2: Install a software wallet
The second best option you have is to install a software wallet, which grants you a private key and thus control of your bitcoin. Installing a wallet on your computer or mobile phone is a decent option for limited funds, but if you are investing more than you are willing to lose this is still not the safest option. The software can be hacked and malicious mobile apps or a virus could get access to your private key as long as it is on your computer or phone.
Option 3: Use a hardware wallet
A hardware wallet or bitcoin wallet is a dedicated device with a secure screen that provides the safest option and can’t be hacked or compromised by a virus it will:
- Keep your private keys safe from malicious hacks or unauthorized access from external users.
- Independently verify and show on your screen the activity of the wallet.
It is therefore the safest option as no external hacker or user can access this device except the physical holder of the bitcoin wallet. If you store a larger amount of BTC or any other cryptocurrency we therefore strongly recommend this option as it will keep your funds safe so you can HODL as long as you’d like.
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We hope that you found this overview useful and if you have any questions feel free to reach out and we will get back to you as soon as possible.
Where to buy bitcoin?
Where do you buy bitcoin? Binance or Coinbase are both great exchanges to buy bitcoin on. These are highly secure and trusted exchanges as well as reputable financial services in their respective fields. I personally use Bitfinex for buying bitcoins but many other people find this exchange also very helpful if you want more anonymity with a digital currency because of the higher transaction fees that come with it.
In most cases, your goal is simple: sell some BTC at any time when conditions change so there’s nothing wrong with selling instantly after setting up funds via one place like we did here where all trades were confirmed by us before sending them out again due cost-cutting measures such things must be done regularly through careful market planning against expected fluctuation rather than trusting fiat markets blindly (or “trading bot
Risks of buying cryptocurrencies
There is always some risk associated with buying bitcoin and other cryptocurrencies, as anyone who has mined one can attest. That being said the price of these assets seems to be increasing at a constant rate in light of this rising volatility from governments trying their best not to get killed by it.
In March 2017 Bitcoin reached $7200 per coin or nearly four times its 2015 value (a number that will keep climbing for quite some time). In 2014 when they started making money using digital currencies people were questioning whether Bitcoins would ever work on an effective level because everything about them was based on trustless computers instead of offering no privacy whatsoever but rather running large amounts via trusted banks. They’ve grown so much over the past few years and recently hit 50.000 USD.
Buying bitcoin and storing them in a hardware wallet. It’s always wise to keep your funds safe by not sending large amounts of currency as you might lose all the coins upon transaction failure. One option is using external storage so that when they go missing, no one has access (or even be able) In short, don’t store bitcoins at home or without some form but knowing where you have stored it from which bank account will help considerably.