Bitcoin is the most popular cryptocurrency and most valuable. Bitcoin is used for the peer-to-peer safe transaction as it is decentralised, so no central agency is involved for surveillance or transaction approval. These transactions are approved and validated by miners around the world, and they charge a small fraction of Bitcoin that is nominal. Bitcoin is used to buy products, services without involving the federal body. The modality of the Bitcoin transaction is purely online, so it is exposed to be hacked and theft. Therefore it is important to take care of certain things to avoid such losses. Before, we know how to protect your Bitcoin, let’s know about Bitcoin to understand its protection.
Bitcoin is a decentralized cryptocurrency, without a federal bank or single proprietor that can be sent from one user to another user on the peer-to-peer blockchain-based network without the requirement for mediators. Transactions are verified by worldwide network nodes through cryptography and logged in an open distributed ledger. The cryptocurrency was invented in 2008 by Satoshi Nakamoto. The currency started to use in 2009 when its application was released as open-source software. The quantity of Bitcoin is limited to 21 Million.
Transactions are demarcated using a Forth-like scripting linguistic. Transactions consist of one or more inputs and one or more outputs. When a person sends Bitcoin, he designates each address and the quantity of Bitcoin being sent to that address in an output. To avoid double expenditure, each input must refer to a previous unspent output in the open net ledger.
Protection Against Theft and Hacks:
- Strong Password
You need to make a combination of small, cap letters, numbers, and special characters, so it will not be easy for anyone to break the password. Easy password is one of the reasons to be hacked and compromised. Password must not be saved in the browser or your email to avoid the chances of risk. Your password must be different from other social and email users. Making strong passwords will help to prevent hacking.
- Two-Factors Authentication
It is advisable to use two-factor authentication for login into your trading account. It protects maximum in case of hacking because it requires login with the help of two factors, so it is not easy to hack the trading account or wallet. Google two factors authenticator can also be used.
- Get Your Bitcoin Off the Exchange
This is highly recommended that after buying your Bitcoin from Cryptocurrency Exchange, you should keep your Bitcoin in your wallet rather than in the Exchange Wallet. You can have your wallet offline or in a Cold wallet then it is safer than Hot Wallet. Many companies offer the sale of both cold and hot wallets so you can buy to store your Bitcoin. In case of hacking in the Exchange wallet, your Bitcoin will be still safe in your cold wallet.
- Use Cryptocurrency wallet
There are many types of wallets like web wallets, desktop wallets, mobile wallets, hardware wallets, and paper wallets. The crypto wallets offer added security features over a traditional wallet. Cryptocurrency is not tangible, so crypto wallets don’t store your tangible cryptocurrencies but store the keys to your crypto instead.
Since Bitcoin is operated online through the internet and it makes Bitcoin risky to be stolen. You need to know the pros and cons of Bitcoin use. Above all, you have to clearly understand the transaction of Bitcoin mechanism and its protection against theft and hacks. It requires a strong password, two ways of authentication, and need your private wallet for storing the Bitcoin so that you can put your Bitcoin in a much safer place.