With bitcoin price increasing at a rapid rate and investors rushing in to purchase the digital currency, Jonas Schnelli, a Bitcoin Core developer and co-founder of minimalist bitcoin hardware wallet Digital Bitbox, cautioned users to rely on proper bitcoin storage methods.
One basic practice which bitcoin users must always implement is preventing the usage of custodial wallet platforms. That means users should avoid using bitcoin wallet platforms or exchanges which allow third party service providers to hold user funds and bitcoin for the user. If users store bitcoin in a trusted environment, upon potential cases of hacking attacks and data breaches, user funds can be stolen.
Thus, at all times, users must develop a habit of storing bitcoin on non-custodial wallets, cold storage and hardware wallets. If possible, for security purposes, cold storage and hardware wallets are recommended to users that hold substantially large amounts of bitcoin.
Hardware Wallets, Cold Storage
Hardware wallets like Trezor, Ledger, and Schnellli’s own Digital Bitbox are perfect alternatives to web or mobile-based wallet platforms. Trezor is the most widely utilized hardware wallet to date, due to the development team’s focus on prioritizing security and robust ecosystem for users.
For beginner users or casual bitcoin enthusiasts looking for hardware wallets with simple yet intuitive user experience, Ledger Wallet is a viable substitution, as its hardware wallet series like the Ledger Nano S simplifies the process of sending and receiving bitcoin to and from others.
Users holding even larger amounts of money upwards to hundreds of thousands of dollars should consider purchasing physical bitcoins or rely on paper wallets, which essentially are two different forms of cold storage.
Cold storage wallets offer unprecedented security measures as they store bitcoin offline. Because bitcoin or user funds aren’t connected to the internet in the first place, cold storage wallets are immune to hacking attacks or data breaches.
Some physical bitcoin providers such as Denarium Bitcoin enable investors to purchase bitcoin in the form of physical silver coin, which serves as a great Christmas or holiday presents. Instead of sending bitcoin directly to wallets, families and friends could use Denarium Bitcoin to give bitcoin safely in an offline ecosystem.
Schnelli recommends users to control their own private keys, utilize cold storage or hardware wallet to ensure that investors and users are prevented from unexpected security breaches.
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Last modified: March 4, 2021 4:53 PM