The emergence of the new cryptocurrency has ignited a wave of free spirited people who want to get their hands on the finite amount of digital currency and mark themselves in the history books as owning the first form of widely accepted cryptocurrency that’s not subject to any central authority or middlemen.
It relies on a public ledger system called blockchain which in layman’s terms is an open database. To put it simply, if you imagine a spreadsheet like excel for instance, and this spreadsheet is replicated X number of times and the scope of such spreadsheet is vast enough to span across a huge network of devices. Next, if you imagine that this spreadsheet regularly updates the information contained within it .
The information on the blockchain is open and transparent and operates as continuously self-auditing ecosystem. The blockchain reconciles every single transaction every 10 minutes!
Transparency is the key
The data held within blockchain isn’t stored in one centralised location. In fact it’s the opposite, it’s been designed to be decentralised. If we imagine for a second that it was stored in a one location, it runs the enormous risk of being infiltrated by a single party who then have the ability to corrupt everything. If any information was indeed altered by some insidious hacker with malicious intents, then it means a HUGE amount of computing power would be needed to override the blockchain system, not to mention destroying their value. The Bloomberg network is thinking a few different things. Learn about how to mine cryptos here.
Put up as many lines of defences as you can!
Fortunately there are ways to fortify and improve the security surrounding your cryptocurrency, and i’m not just talking about Bitcoin either. These are ways to keep Etheruem, Ripple, Dash, Altcoin, Litecoin etc. Security is becoming paramount in this day and age in order to take back one’s own right to privacy.
Cold Storage – Offline Wallet
Cold storage introduces the notion that you can actually put your Bitcoins and other cryptocurrencies in your pocket. This is probably the most secure way to keep your cryptocurrencies safe, however there are other methods, but this one is preferred. Learn about some of the craftier ways people are stealing bitcoin by going to this site. You won’t regret it.
An offline wallet (cold storage) is simply a device such as USB drive where you would store your private keys from breaches. They are becoming increasingly popular, and for good reason because there hasn’t been any verifiable incidents of Bitcoins being stolen from hardware wallets. Find out about storing Bitcoin in Canada. This guide will most certainly help.
The major advantages hardware wallets have over standard security protocols like passwords which can be hacked etc. The advantages include:
- Private keys are stored in a protected area called the microcontroller, and can’t be transferred from the device as plain text.
- Immune to computer viruses that steal from software wallets.
- They can be used securely as opposed to paper wallets
There are number of hardware wallets readily available to purchase from trusted sources. Secure hardware wallets such as Trezor or the Ledger Nano S are available and cost around $100. The setup is straightforward:
- Head to https://wallet.trezor.io/
- Install the chrome extension
- Connect your Trezor wallet to your computer
- Click Yes to install the firmware
- It will then prompt you to for your fingerprint
- Choose a label for your wallet
- A 3×3 box will appear on the wallet with numbers in each of the boxes. You need to select 4 numbers and hit Enter.
- The numbers will then become scrambled and change and it will ask you to select your original 4 numbers.
- The next process is making a copy of the list of 24 words, which will allow you to recover your accounts in the event of your wallet getting stolen or lost.
- During the final stage the 3×3 grid will appear again with a new set of scrambled numbers, and you will be prompted to select your original 4 numbers.
The Iceberg to the Titanic
Although the concept of an hardware wallet like the Trezor or Ledger Nano S does sound appealing, there are of course some downside to this type of security. You could fall victim to the event of a household fire, in which the contents get consumed by flames, and you lose your physical wallet and your Seed if you have written them down somewhere.
You could also fall victim to a theft and have your wallet stolen along with your seed if you leave them lying around, rather than in a safe place.
It is EXTREMELY recommended that you find a safe place for your wallet and seed, because the last thing you want is to have a huge sum of cryptocurrency which is worth millions of dollars, have it stolen or lost forever!