Keeping your bitcoin safe is the top priority of any crypto-savvy investor. Here’s what you need to know to keep guard up and your losses down.
Bitcoin is a bustling business. From day traders to developers, the many facets of what appears to be a simple and superficial market can quickly become overwhelming- especially if you’re not particularly computer literate. But not knowing you’re way around the coding world, or the investment one for that matter, shouldn’t preclude you from investing.
People from all over the world and all different walks of life are beginning to show a keen interest in bitcoin and other cryptocurrency investments. Which makes an excellent case for everyone to find out how best to secure their investments, no matter how or why you’re investing. Starting off small, with a trader focused exchange like Bitvavo is a great place to start, but here’s what you really need to know to secure your holdings.
Keep Your Bitcoin Safe: Investing
Knowing where, how, and when to invest in cryptocurrencies is paramount to keeping your stores safe. The best way to find out exactly how to do this is by researching and constantly learning, but more on that later. Investing in bitcoin can be an exceptionally dynamic undertaking. Deciding exactly how bitcoin will play a part in your portfolio may help guide your investments. Whether to HODL and sit on your coins as prices develop, or using a micro-transaction, day-trader approach to offset gains taxes or reinvest capital as it’s received. Each of these activities requires different storage and wallet strategies, as well as may require multiple exchange platform use.
Particularly if you plan on investing in lesser-known cryptocurrencies of blockchain technology. This is largely because few if any, platforms deal in all the available cryptocurrencies. So you may need to exchange your fiat for bigger name coins, like bitcoin or ethereum, and then go to peer-to-peer platforms in order to trade that crypto for lesser-known ICOs. Which can be a bit dangerous if you’ve never navigated a peer-to-peer platform before.
Keep Your Bitcoin Safe: Storing
How you store your crypto will play a massive part in how secure your investments are. It’s important to understand the different types of storage (hot and cold), as well as understand the different types of wallets that you will need to achieve these types of storage. The last thing any investor would want to do would be to store the entirety of their HODL value in a hot wallet. Investors who plan on holding onto investments long term must consider cold storage and hardware wallets.
Another important point when it comes to security and storage is creating backups of both wallets and private keys. Private keys must be kept in ultra-secure places, as they are quite literally the keys to your bitcoin kingdom. If anyone gains possession of your keys, they have full, unadulterated possession of your accounts. So when considering any type of storage for your coins, always have a secure backup.
Keep Your Bitcoin Safe: Planning
Knowing how you intended on using crypto is a massive factor influencing what measures you will need to employ in order to keep your investments safe. While many of these concepts dovetail into one another, planning in this context is more about understanding what you will do with your crypto in case of an emergency or your death.
Creating an end of life plan for your investments is incredibly important when it comes to the overall security of your accounts- and arguably one that is not discussed often enough. Millions of bitcoins have been lost forever, some due solely to the fact that appropriate benefactors were not lined up in advance. To compound the issue, creating a legally viable inheritance contract requires some serious legal power. Mostly because laws regarding crypto inheritance are still nascent and contentious. Make sure that your coins are safe for generations to come by discussing this with someone who has expertise in the field.
Keep Your Bitcoin Safe: Reading
Cryptocurrency and blockchain technologies are incredibly dynamic fields. Constantly changing, constantly innovating. No matter what way you plan on interacting with the crypto sphere, you’ll need to be constantly educating yourself about markets, trends, and innovations within the given market. Just as prices are extremely volatile, so too are the concepts and technology that underlie them.
It’s crucial that investors familiarize themselves with multiple informational sources regarding bitcoin or cryptocurrency. Know where you can get up to date and reliable information. Interact regularly with forums, and don’t be afraid to admit that you may not know exactly what’s going on.