Since its release in 2009, Bitcoin has experienced its own fair share of highs and lows in popularity. But as of the year 2019, the cryptocurrency hit another surge that surpassed many previous highs causing an increase in popularity yet again and attracting more individual investors to want to purchase more Bitcoins.
But as with any virtual platform like an online casino and the likes, seeing a surge does also invite unwanted guests in the form of hackers. Since businesses and individual investors are taking interest in wanting to own Bitcoins, this has opened up a huge gap in the market for hackers to find ingenious ways to steal funds since the virtual space now consists of many amateur and inexperienced investors that are still new to the system.
As a business, it should always be the main priority to remain informed on the various ways your funds can be kept safe, especially when you’re conducting business transactions online. In this article, we will be providing you with various ways you can implement in your business to keep your Bitcoin wallet safe from hackers and third parties.
Understanding A Bitcoin Wallet
Just as you would do with physical cash, Bitcoins are also stored in a wallet known as a digital wallet. Your Bitcoin digital wallet can be web-based or hardware-based. It can also be accessed on a mobile device or desktop, or kept safe by having private keys and wallet addresses printed out on paper.
As convenient as these digital wallets may be, they also pose many risks depending on how the business chooses to manage the wallet. Digital wallets do have security features in place to protect funds. A good example of this is with the private keys assigned to each digital wallet. Without this key, no one, including the owner, can access the wallet. While this may look risky in the case of losing the key as the owner or experiencing a computer malfunction that could crash the hard drive, all these efforts help business owners keep their funds safe from hackers.
Options To Keep Your Bitcoin Wallet Safe
A Hot Wallet
Hot wallets are another term for online wallets. These are wallets that are operated on devices that are connected to the internet like your mobile devices and desktops. Because they are based online, this could create situations of vulnerability for businesses because these wallets generate the private keys you use to access your Bitcoin wallet.
Hot wallets can be very convenient to access and make transactions on your assets, however, they lack enough security features that can protect your funds from being stolen. For this reason, one way to keep your business funds safe on a hot wallet is to only use the wallet for smaller Bitcoin amounts.
You could turn it into a business checking account that you can use to spend on business expenses that are done regularly. This way, your business funds will be in constant circulation and you don’t have to worry about having the funds nest in the hot wallet for the next accounting period.
A Cold Wallet
A cold wallet happens to be the safest digital wallet to use when you’re looking to store your funds. This is because it can’t be connected to the internet and, therefore, stands a less chance of being compromised. They’re also known as offline wallets or hardware wallets.
This kind of digital wallet would be best for storing payments that you receive from customers. Here, your business’s address and private key will be stored and it will come with software that works together to help you view your portfolio at any time without having any of your wallet details exposed and put at risk. Cold wallets remain the most secure to store your Bitcoin; however, they do require some knowledge to set up so you may need some assistance with this if you aren’t an expert at cryptocurrencies as yet.
Added Security Precautions
In addition to having a hot and cold wallet to serve various functions, here are some added security precautions that you can take to protect your business funds at all times:
- Backup
- Software updates
- Multi-signature