Bitcoin, the world’s leading cryptocurrency by market capitalization, may be great at other things, including anonymity and speed of transaction.
But if there is one thing that continually keeps Bitcoin investors on their toes, it is the thought of losing their precious asset.
Indeed, Bitcoin, just like every other cryptocurrency out there, is prone to hacks. SeveralSeveral cryptocurrency hacks have been reported with the investors losing lots of money in the process.
As a Bitcoin investor or enthusiast, one of the things you must master on time is how to safeguard your wallet. You can learn more about the importance of doing this from VantagePointTrading.
Can a Bitcoin Wallet be Hacked?
Yes, a Bitcoin wallet can be hacked when a hacker or a cybercriminal has access to the email address or telephone number you used to create the wallet.
Also, the hackers can use your authentication codes if you are not aware. The most astonishing is the fact that you can lose your Bitcoin if a cryptocurrency exchange is hacked. This usually happens when you leave your Bitcoin in your wallet on the exchange.
How Can I Secure My Bitcoin Wallet Against Hacks?
A constant review of the Bitcoin and blockchain system has helped cryptocurrency investors to double up on their security strategies.
Here are some of the ways to safeguard your Bitcoin wallet and keep your coins safe:
1. Enable 2FA
Two-Factor Authentication or 2FA for short is not a new phenomenon in cyberspace. It is one of the security measures that can help you store your Bitcoin securely.
2FA works by requiring series of verifications before any transaction can be made via a Bitcoin wallet. This helps you to be in considerable control of your wallet. Even if the wallet gets into the wrong hands, it will take a lot of time before the funds inside can be accessed.
Ideally, you want to tie your Bitcoin wallet’s 2FA to a private email address that no one but you know the address. This way, you will receive the authentication code required before sending funds out of the wallet.
2. Double Down on Encryption
Encrypting your Bitcoin wallet is another effective strategy to prevent illegal access to your funds. Note that the primary encryption process is to use a password that will be so hard to guess.
One of the disadvantages of encrypting a Bitcoin wallet is that the encryption mainly works for human access. This means that it might not prevent keylogging hardware from reading the password, assuming the hardware has already been installed in your device without your knowledge.
All the same, here are the best ways to increase your Bitcoin wallet’s encryption:
3. Use “Hard-to-Guess” Passwords
The passwords to use should be very hard for someone to guess easily. Ensure that you don’t use a nickname, your name, or any names or letters that are peculiar to you because it will be easy to guess.
These are helpful tips to guide you when setting up a strong password to protect your Bitcoin wallet:
- Ensure that the password is at least 16 characters long. You can increase the length, provided you can remember it.
- Use a combination of numbers, alphabets/letters and punctuation marks to create your password.
4. Change Passwords After a While
It is quite risky to keep using the same password for your Bitcoin wallet. Although this can help you memorize the password easily, it could also give potential hackers an opening to hack the wallet.
Consider changing the passwords after a few months. Also, it is pertinent to change your password, especially when you must have clicked on suspicious links.
5. Utilize the Multisig Feature
An ideal Bitcoin wallet should have the Multi-Signature feature. This feature is one of the advanced layers of protection for the wallet because only a couple of persons can have access to it.
Besides, the authorization or “digital signature” of the other authorized users needs to be gotten before the wallet can be accessed.
With the access to the wallet now in different hands, it wouldn’t be so easy for hackers to get all those independent approvals at once.
6. Regularly Backup Your Wallet
Indeed, using the multi-signature feature, creating a strong password, and enabling 2FA can keep your Bitcoin wallet safe.
Yet, you might just be overly exposing the wallet to hackers when you don’t regularly back it up.
Backing up your Bitcoin wallet is very essential, especially when you are using the PC version. At the same time, it wouldn’t hurt to back up the mobile version.
Here are some of the tips to help you back up your Bitcoin wallet:
- Back up the entire wallet. This way, both the private keys and the hidden keys can be backed up at once.
- Consider using several storage locations, including CDs, USB keys, and papers.
- If you are backing up the wallet online, try to encrypt it so someone doesn’t have access to it.
Conclusion: Your Bitcoin Wallet Can be Hacked
Your Bitcoin wallet can be hacked when you are careless about it and not implementing the right security measures.
Start implementing some of the tips in this article so you can bolster the security of your Bitcoin wallet today.