NEW ZEALAND – Guest Writer –The third in the series of “How to Bitcoin” articles introducing you to Bitcoin and what you can do with the cryptocurrency. Here is an overview of how to store your Bitcoin.
You can store Bitcoin or altcoins in the following ways:
- Paper Wallet
- Encrypted Hardware Device
- Encrypted Software Wallet
Each method offers both pros and cons.
A paper-wallet is just that, a special code (address + keys) that is then printed out on a piece of paper. You can load BTC to an address then physically print your wallet details in a secure way. This way no one can steal your BTC online even if they stole your computer. They would need to physically view the paper (wallet) in order to access the BTC. This is a very secure way to store large amounts of BTC that you don’t need to access immediately but it does need to be physically stored. Your paper-wallet can be stored somewhere safe such as a home safe or third-party safety deposit box.
An offline wallet is when you download the BTC wallet (or alt-coin wallets) and then the Blockchain (done automatically and will take hours on the first download, however, not always required). It is a very secure method if you are security conscious and maintain a virus/malware/spyware free computer. This is recommended and once set up, is very easy to use. If you wish you could also save your wallet.dat file, which is very small in size and contains all the relevant information needed as a backup, which is then transferred it to a USB.
If you end up having to reinstall your computer then your wallet.dat file will be safe somewhere else and you can re-establish your wallet. You should always encrypt (eg. Trucrypt or similar) your wallet.dat file in case someone try’s to steal them from you, although they still need your password to open the wallet. It does not matter if you have to re-download the Blockchain as this is the public ledger of records, not your wallet information.
The only liability is you need your computer in front of you to transfer BTC from your wallet. This is because your wallet and Blockchain that were downloaded are located on your computer. If you already have another wallet on another computer you can just transfer your wallet.dat file there and then you can access your BTC. This would be very un-secure if the other computer was not yours. Your wallet.dat file is where your BTC is stored so don’t give anyone access to it even if they do not know your password.
The online wallet is the most convenient way to store your BTC (and altcoins). Different online wallets have different security measures and available support. It is highly suggested to use an established online wallet and a reputable one. Blockchain.info is a good example and is used by many people to store BTC, but Blockchain.info has its downfall of not being able to let the user access their private keys for BTC unlike paper or offline wallets. Other online wallet providers do offer access to the private keys (this is different to your password) but again the reputation must be taken into account when choosing. At an early stage in crypto, this is irrelevant.
You can access your online wallet from any computer connected to the Internet. As with any online service, there is always a chance of hacking or misappropriation from inside the company and your funds could be lost. If using a computer that is not yours, this increases more insecurity as someone could have installed spyware and then they will have your password and can steal your BTC.
Some wallets can also store multiple coins including BTC. You just need to research the wallet before selecting. Always consider security, the support, and the reputation of the exchange a priority when making a choice. Use an Exchange for what it is intended, buying and selling BTC and Altcoins, not for storing them longer than necessary.
The Hardware Wallet is a device similar to a USB that stores your BTC securely. An example of a secure Hardware wallet is the Swiss Bank In Your Pocket (SBIYP). For security purposes, each SBIYP has customized encrypted USB keys plus you are completely in control of your private key. The Software is downloaded to your personal computer and the SBIYP USB will only work on this computer. A backup USB provided which should be kept secure. A suite of digital banking applications and, basically, it is “Just you, the blockchain and your Swiss Bank In Your Pocket” – no middleman at all. Currently, the SBIYP supports Bitcoin, Bitcoin Cash, Ethereum, and EOT, with more altcoin wallets to follow.
Encrypted Software Wallet – Embedded Vault – The most secure cryptocurrency software wallet that turns your PC into a secure hardware device.
This is how the Embedded Vault works – Using your phone, PC and blockchain together the Embedded Vault creates secure storage for your cryptocurrency and cryptography assets.
Biometric security is a further intricate part of the security and the dynamic key generation process.
To use the Embedded Vault, you need a smartphone with a fingerprint scanner as well as a PC or laptop.
A PC application and smartphone applications need to be downloaded. The PC Application interacts with the phone over Bluetooth with an encrypted connection.
The “secret sauce” of the Embedded Vault is that the keys are dynamically created with a combination of a cryptographic transaction, biometrics as well as other hardware and software input.
You are in control of your private keys – You Are the Key
As an additional security feature, all transactions are double checked by a fingerprint scan of the user.
EOT [Encryption of Things] will be the cryptocurrency used as part of the key generation and encryption process.
Download your Embedded Vault today – Click Here
More in the “How to Bitcoin” series:-
Watch out for these…
How can we make money?
Electronically Processing BTC- Mining
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