The recent price surge of Bitcoin has attracted a growing number of investors looking to profit from cryptocurrency mania, but many do not realize they are exposing themselves to an equally thriving enterprise: cyber crime. Hacked cryptocurrency exchanges have led to millions of dollars worth of losses.
One way to improve the security of your Bitcoin is to store them offline. If you store the Bitcoin through an online exchange, the safety of you cryptocurrency will depend on the service’s ability to keep out hackers, something that history proves is difficult. Online exchange services hold customer’s private keys, secret numbers give access to the customer’s cryptocurrency, a sort of digital signature. If a cyber criminal gains access to the private key, they can steal the Bitcoin connected with the number. The soaring value of Bitcoin and the virtual nature of the currency make it an appealing target for cyber criminals.
Most threat researchers and cyber security experts advise users to store their cryptocurrency on a USB or an external hard drive. Similarly, keeping your private keys on a sheet of paper instead of a computer will decrease your risk of falling victim to cyber crime. Keep the sheet of paper in a secure location, such as safe or a bank vault. You do not want to lose the private key, as you need it to access your Bitcoin. In this case, the trade-off is convenience. One solution is to store a small amount on a cryptocurrency service for daily transactions, but to keep the bulk of it offline.