- Consumers can lose bitcoin and other cryptocurrency tokens due to a variety of factors, including theft, computer malfunction, and the loss of access keys.
- Although cold storage (also known as offline wallets) is one of the safest ways to store bitcoin since it is not accessible over the internet, hot wallets are nevertheless handy for some users.
- For any long-term Bitcoin and cryptocurrency storage, those interested in the safest option should use a hardware wallet.
Following a price peak in late 2017 and a corresponding drop in sales, cryptocurrencies such as Bitcoin have seen another major increase in 2019 and 2020, exceeding previous all-time highs. As a result of this, the number of publicized hacking instances has grown as well. Because many investors are new to the system and may not know how to keep their assets safe, hackers are devising new ways to steal money.
Some of the most visible thefts have occurred in plain sight: some hacks have even brazenly redirected tokens intended for one wallet to the other.
The victims watch helplessly as their tokens are taken from them with no recourse.
Bitcoins are kept in a wallet—a digital wallet—in the same way, that cash or cards are kept in a physical wallet. A hardware-based digital wallet or a web-based digital wallet are both possible. The wallet can also be stored on a mobile device, a computer desktop, or printed on paper to keep the private keys and addresses for access safe.
The bitcoin owner cannot access the currency without a set of private keys, which are stored in every wallet. The most serious threat to bitcoin security is an individual user losing or having their private key stolen.
Read about the safest ways to store bitcoin in our next article.