When it comes to handling bitcoins, wallet security is paramount. There are numerous stories on the Internet about people whose wallets were cleaned without their knowledge.
Perhaps one incident that became the lowest point of the cryptocurrency’s existence was the disappearance of 850,000 BTC from Mt. Gox in early 2014. About 750,000 of this amount was from customers ’wallets in the Bitcoin Exchange .
It should be noted, however, that such fraud is not exclusive to Bitcoin. There are numerous cases that stand out in history for millions of dollars or a huge shipment of precious minerals lost to thieves and frauds.
And that’s why, just like with fiat money, you are responsible for taking care of your bitcoins. You can delegate it to others, but, as said elsewhere, the money stops with you.
To get started with protecting your bitcoins, you need to understand that there are basically two types of Bitcoin wallets: cold and hot.
CoinbaseYou need to balance comfort and safety
Cold wallets are those that are not connected to the Internet in any way. They include paper wallets and digital wallets in non-Internet devices.
Such wallets are considered the safest. However, this does not mean that they are not vulnerable at all. If someone other than you has physical access to them, there is a chance that they will be compromised.
On the other hand, hot wallets are those that are connected to the network. In most cases, they are stored in the cloud. The best examples of such wallets are those on Blockchain.info and Coinbase.
Yes, even those on your local drive fall into this category, as long as your computer is connected to the Internet. For the simple reason that criminals can access them remotely, hot wallets are considered less secure than the two of them.
Cold and hot wallets have advantages and disadvantages
Each of these two types of wallets has its advantages and disadvantages. For example, a cold wallet is safer, but less convenient. You can’t use it for everyday expenses, like paying for lunch at a favorite restaurant or even giving tips to a waiter. They are taken care of by a warm wallet like the one on your cell phone.
Still, it is possible to get each of these wallets the best.
Since a cold wallet is safer, it is the most convenient place to store large amounts of bitcoin. Warm wallets, on the other hand, provide you with a place to store bitcoin for everyday expenses.
However, whether you keep your bitcoins in a hot or cold wallet, you need to take further steps to improve their security and prevent Bitcoin security breaches .
It is strongly recommended that you keep a cold wallet safe, especially if it contains a significant amount of bitcoin. Meanwhile, hot wallet users can use features like encryption, multiple authentication, and secure passwords. It is also important to back them up.
The security of Bitcoin wallets is important even when gambling online
While you won’t completely eliminate the likelihood of clearing your wallet, adopting these measures significantly minimizes it, especially when dealing with Bitcoin gambling.
Players at Bitcoin casino or online sports betting usually use warm wallets because they are simpler and more convenient to use. Several Bitcoin gambling sites provide a generated wallet address and QR code that bets bettors using a mobile Bitcoin wallet.
However, as mentioned earlier, security is the primary enemy of hot wallets, hence the increase in demand for Bitcoin hardware wallets .
There are key points you need to remember to protect your Bitcoin wallets from possible hacking and unauthorized access, but when you gamble with bitcoins, you need to make sure you only have enough coins to serve as cash for that gambling session. In fact, what most bettors do is switch BTC from their cold wallet to their warm wallet dedicated to gambling with Bitcoins or even consider the idea of a bio-port to gamble with bitcoins .
Finally, the last thing you’d want is to win tons of mass payouts paired with a lot of Bitcoin casino bonus offers to find out a few hours later that all those sweet payouts are gone.