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Tips for Bitcoin Investors who are New in this Field

If you are a new Bitcoin investor, you may find it quite intimidating. There are some tips which newcomers may use to maximize the chances of success. Continue reading on to find out more.

Do your research

Investors who are just started using Bitcoin should do their complete homework. Remember that if you understand much, then you can only come to know what is going on. Bitcoin gives a unique and rare opportunity and this opportunity should be treated accordingly and wisely. It is also known as Bitcoin’s underlying technology.

You should keep in mind that investing in crypto coins and tokens tends to be highly speculative. The market is mostly unregulated and unpredictable. Those who are thinking about investing here should be ready for some bad happenings as you can lose your whole investment.

You need to know about the blockchain, i.e., the distributed ledger system which underlies all digital currencies.

Start off by taking the time to understand the blockchain properly. You need to have much understanding about how a blockchain actually stores secure data (like coins).

It takes time to learn properly about Bitcoin. New investors may work with a good mentor. They wish to find some trusted person or even resource to discuss their queries as well as concerns to understand this market.

Go forward with caution

When it comes to investment, the risk is essential. You should remember that digital currency and asset markets are two different kinds of trading systems. You have to set a completely different strategy while dealing with digital trading.

It is really a high-risk area, therefore, do not invest any money that you cannot survive with if you lose it.

It can be a good idea, to begin with, a small amount. Invest only a tiny amount of your capital. Set an entry point then stick with this. With Bitcoin, one is almost always correct when it comes to foreseeable price action. In fact, it may be your timing which may be off. Therefore, be patient, allowing the Bitcoin price to come up.

When Bitcoin has arrived at the right price, investors should refrain from purchasing their Bitcoin all at one time. Rather invest only a little particularly at a time, then wait for some time, and then you can invest some more.

Diversify in an effective way

Over the last few years, Bitcoin developed some really impressive gains. There are also some media outlets that created some stories concerning “Bitcoin millionaires.”

These stories may encourage investors to place all their cash in Bitcoin, but remember that it is not advisable to put all your money in one place.

At the time when you are developing a diversified portfolio, you can look at altcoins, more tradition assets like stocks and bonds.

When it comes to diversification, you need to develop a portfolio when there is some decline within one component. It should correspond with some equal gain within another.

You need to know all about the Bitcoin market if will be involved in this. You can also check out different trading tools like the Bitcoin Trader Test as well.

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Russian scientists arrested for mining Bitcoin at nuclear facility

Russian scientists arrested for mining Bitcoin at nuclear facility

Russian Scientists Arrested For Using a Top-Secret Government Computer For Mining Bitcoin

Some engineers working at a top-secret Russian nuclear research facility have been arrested by Russian security officers for allegedly using one of the country’s most powerful supercomputers to mine Bitcoin, reports BBC.

The alleged attempt to mine Bitcoin was carried out at the Federal Nuclear Center in Sarov, a top-secret area with high security where the Soviet Union’s first atomic bomb was developed during the cold war.

“There has been an unsanctioned attempt to use computer facilities for private purposes including so-called mining,” The Federal Nuclear Center in Sarov stated, according to the BBC and the Russian news agency, Interfax. “As far as we are aware, a criminal case has been launched against them.”

The supercomputer that was reportedly used was not supposed to be connected to the internet for security reasons. However, it was used by the engineers for personal agendas that included mining for cryptocurrencies. The officials quickly realized something was not right after they were alerted that it had been connected.

“Their activities were stopped in time,” institute spokeswoman Tatiana Zalesskaya, told Interfax news agency.

“The bungling miners have been detained by the competent authorities. As far as I know, a criminal case has been opened regarding them,” she added, without saying how many were detained.

The arrested engineers have been handed over to the Federal Security Service. It is unclear when the crime had taken place or how many suspects were involved.

Cryptocurrencies require a great deal of computational power and energy consumption to turn a profit. The Federal Nuclear Center employs about 20,000 people and its supercomputer boasts a capacity of 1 petaflop, which is the equivalent of 1,000 trillion calculations per second, the BBC reported.

Russia is turning into a breeding ground of cryptocurrency mining due to its low-cost energy reserves and computer takeovers are expected to only continue in all likelihood.

The Federal Nuclear Center is supervised by Rosatom, the Russian nuclear agency, and works on producing nuclear weapons.

“Similar attempts have recently been registered in a number of large companies with large computing capacities, which will be severely suppressed at our enterprises,” Zalesskaya told the Russian news agency Interfax.

Such attempts “at our enterprises will be harshly put down, this activity technically has no future and is punishable as a crime”, she added.

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What is the Right Time to Buy Bitcoin

What is the Right Time to Buy Bitcoin

If you read the news, you have probably become aware of the fact that the price of Bitcoin has been consistently going up for quite a while. At a point, you probably realized you didn’t want to be the one person to miss out one of the best investing opportunities of the last decade, so you want to get in.

The Hard Part of Investing in Bitcoin

Bitcoin prices may be constantly going up, but they are also very volatile, which can scare away many investors. You will see many news stories covering this from various angles. Some will talk about how quickly Bitcoin has gone up and others will talk about the most recent drastic dip (despite the fact that Bitcoin is still up on the month). The point is volatility creates risk and scares away the investors who aren’t willing to lose all the money they put into it.

The funny thing about this is that the volatility actually works to create the investment opportunity. If there was a sure-fire way for investors to make 50% returns per annum consistently, then everyone would be throwing their money in as fast as possible. But the volatility means risk, and not everyone is willing to handle that.

So, the hard part of investing in Bitcoin is figuring out what you want your strategy to be. There are a few different ways to approach it, and you will need to tailor your approach to whatever suits you best as well as what you think will yield the highest returns.

Buy-and-Hold (or HODL)

Warren Buffett has popularized the investment approach of just buying a security and holding it forever or until your original thesis about the security changes. This appears one of the most popular approaches investors take with Bitcoin.

When presented with the option to day trade and be smart about their management of Bitcoin, some investors just realized that it wasn’t worth it and would be safer to buy Bitcoin for a long time. This is almost a fear-based approach that is optimized to avoid any of the big missteps. The basic idea is you think Bitcoin is a winner, so you hold Bitcoin.

The cryptocurrency jargon “HODL” came from a famous misspelling where a Bitcoin enthusiast was explaining how he realized he couldn’t beat the traders at their game and didn’t want to lose money trying to be the smartest guy in the room. Since then, it has caught on as an explanation for someone’s long-term investment strategy.

Buy the Dip

Not necessarily in direct opposition to HODL, but trying to get a little fancier, is the idea of buying Bitcoin on the dip. There are invariably going to be drops in the price, and that is when you buy the currency.

This is a form of market timing but doesn’t mean you are making frantic trades to eke out every last bit of profit you can. You are just being an opportunist at a time where most people are being foolish and selling off their cryptocurrency because they think this time is the end of Bitcoin.

Buying when others are fearful is another precept of Warren Buffett, which he borrowed from Ben Graham, and is a great way to guarantee bargains when you were already planning on buying more of it.

Dollar-Cost Averaging

Another approach you could take to acquiring your Bitcoin is buying a certain amount every month. This is referred to as dollar cost averaging and can apply to any investment. The opposite of this would be buying all your Bitcoin in one lump sum and then never adding to this position.

Diversification is important because it allows you to participate in the upside (and downside) of many different securities, which lowers the overall risk of your portfolio. Dollar-cost averaging has you do this, but rather than diversify over an asset class, you are diversifying over time. Buying Bitcoin at a bunch of different points in time, you are ensuring a less risky outcome for your portfolio.

Trading for Profit

You get more advanced when you start analyzing charts and looking for trends in the prices of these securities. Day trading has always existed as a potential career, but with the emergence of these highly volatile cryptocurrencies, it has become even easier to make money (or lose all of it).

There are more than a hundred different trading platforms and exchanges available for those who think they can beat the market and take some money off the table. The big thing to remember here is for every bit of profit you make, someone else must be losing to subsidize that. The money doesn’t come from nowhere.

Trading is a high-risk, high-reward way to handle your cryptocurrency investments. Whether you HODL or use any other strategy, you are still participating in the upside of cryptocurrency along the way.

Conclusion

No one knows the exact time which is appropriate for buying cryptocurrency as volatile as Bitcoin. Having learned about all the different ways, you can go about managing your cryptocurrency investments. It is now up to you to determine which method is the most suited to your particular needs.

You might not have enough time to learn about trading, in which case you would probably want to try dollar-cost averaging. Or if you want to keep putting more money in, you can buy every time there is a noticeable dip below the trend. This would be closer to a day trading version of buying the dip.

The point is that there are many different ways to approach your acquisition of Bitcoin, and it all depends on how much money you want to put in and what your risk tolerance is, rather than the time when the purchase is to be made.

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Creator of Bitcoin is now among the world’s 50 richest people

Creator of Bitcoin is now among the world’s 50 richest people

Bitcoin Creator Satoshi Nakamoto Is Now The 44th Richest Person In The World

Last weekend saw Bitcoin hit a high of $19,771, according to the CoinDesk bitcoin price index (BPI). This surge in value has made Bitcoin’s anonymous creator one of the richest person in the world, according to the Forbes billionaires list, reports Quartz.

For those unaware, launched in 2009, Bitcoin is a cryptocurrency and peer-to-peer payment system. It is the first decentralized virtual currency and has the highest market value than many of its several counterparts. An inventor who goes by the pseudonym Satoshi Nakamoto is believed to be the creator of Bitcoin. However, till date, it is unclear whether Nakamoto is an individual or a group of people. Also, no one is sure if Nakamoto is alive or dead.

Currently, Nakamoto is listed behind Lauren Powell Jobs of Apple and Disney, Paul Allen of Microsoft, and Stefan Persson of H&M on the Forbes list.

Nakamoto is believed to have an account holding 980,000 individual Bitcoins, which is worth $19.4 billion now making him the 44th richest person in the world, ahead of Saudi billionaire investor Prince Alwaleed, high profile investor Carl Ichan, steel tycoon Lakshmi Mittal, and many more.

Bitcoin which started the year at around $1,000 per coin has gained seven-fold since June. If the cryptocurrency continues to increase in the near future, Nakamoto could very soon enter the trillionaire list.

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Bitcoin will eventually blow up : JP Morgan Boss

Bitcoin is a fraud that will blow up, says JP Morgan boss

Bitcoin is a fraud that will blow up, says JP Morgan boss

Bitcoin is a digital cyrptocurrency that became popular as a consequence of the financial crises of the past decade. It allows individuals to by-pass banks and other traditional financial institutions while paying for goods and services. Being a digital currency, it cannot be regulated by any financial institution in the world – a factor that boosts its value whenever people fear an economic crisis – this has been the reason behind the rising value of bitcoin recently. JPMorgan Chase CEO Jamie Dimon however, has taken a shot at bitcoin, labelling the  cryptocurrency ” a fraud.”

Market Bubble

“It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed,” Dimon said at a banking industry conference organized by Barclays. “Currencies have legal support. It will blow up.”

He added: “The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.

“If you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than US dollars,” he said. “So there may be a market for that, but it would be a limited market.”

The tulip bulbs that Dimon referred to is the Dutch Tulip Bulb crisis –  a famous market crash that occurred in the 1600’s  and is considered the first financial crash. A recent example, would be the real estate crash in 2008 that led to the period of recession across the globe.

Family ties

These comments come following a significant rise in the value of Bitcoin recently, with its value quadrupling and reaching around $4,700 last month before falling down. Bitcoin however, has not been free of risks and controversies, with China recently banning ICOs (Initial Coin Exchanges) which allowed companies to generate capital through cryptocurrencies as well as cracking down on illegal bitcoin exchanges.

He went on further to say that his own daughter had purchased bitcoin. “It went up and she thinks she’s a genius now.” He even mentioned that he would fire at employee on the spot if they were caught trading in bitcoin as it was against company policy. He has also predicted big losses for those investing in bitcoin.

“Don’t ask me to short it. It could be at $20,000 before this happens, but it will eventually blow up,” he said. “Honestly, I am just shocked that anyone can’t see it for what it is.”

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Is this the Blockchain that will take the mainstream by storm?

Zen Protocol claims to be the first system to fully decentralize finance and create contracts affected by real world events.

Is this the Blockchain that will take the mainstream by storm?

Zen Protocol claims to be the first system to fully decentralize finance and create contracts affected by real world events.

If you haven’t read a tech publication in the past six months, you’d be forgiven if you hadn’t known about the latest investing trend, ICOs. While blockchain is a term we’ve been hearing thrown around for years, only lately has it really been picking up speed, with more and more startups starting to show what they have to offer when it comes to this new technology. This was of course amplified by the creation of Ethereum, kind of like Wix for blockchain, allowing anyone to build a blockchain app (or dApp for decentralized app), without actually needing to build a blockchain. All these startups have been raising money in a new method called ICOs, Initial Coin Offerings, basically a cross between cryptocurrency, venture capital, and crowdfunding.

Zen Protocol claims to be the first system to fully decentralize finance and create contracts affected by real world events.One such startup, that’s announcing its ICO is Zen Protocol. Zen isn’t actually built on the aforementioned Ethereum, which according to them is with good reason. On the quest to build “a fully decentralized finance platform” as CEO Adam Perlow calls it, they decided Ethereum just isn’t there in terms of what it can do with smart contracts and interactions with real world events, all of which are required for a robust, blockchain based financial system. What’s special about Zen is that it’s a Bitcoin side chain, meaning it’s part of the Bitcoin blockchain and all Zen nodes are also Bitcoin nodes, but it also has its own “First Class” token, that can help make transactions on the blockchain even faster, not requiring contracts once they are within the ecosystem.

Zen Protocol claims to be the first system to fully decentralize finance and create contracts affected by real world events.

According to Zen, the protocol utilizes contracts that never exhaust network resources and are always correct, meaning they can be utilized with real world assets, and not just blockchain related assets like previous smart contract platforms (namely, Ethereum). This means you can create interactions between stocks, commodity, and options easily with the blockchain. Miners also know in advance how much computing power will be required to verify each contract, which makes the contracts execute and transact faster than any other platform, or so the company says. According to the team at Zen, they are able to accomplish this by using F*, a new kind of functional programming language.

Zen Protocol claims to be the first system to fully decentralize finance and create contracts affected by real world events.ICOs and dApps and DAOs (decentralized autonomous organizations) and “me too” crypto coins and startups have been popping up all over, and who can blame them, considering how much some of these ICOs are making (earlier this year, Bancor raised over 150 million dollars, and that’s not even the biggest ICO of 2017). The question that arises though, is how many of these are vaporware and how many have actual, viable, business models. As always, only time will tell, but the Zen team seems to be pretty determined that they are the ones that aren’t like the rest, and that they built a real, viable, scalable product. We’ll see if their words will be verified by their blockchain.

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What is Bitcoin and Bitcoin Mining? Bitcoin explained in dummy language

What is Bitcoin and Bitcoin Mining? Bitcoin explained in dummy language

What is Bitcoin and Bitcoin Mining? Everything that you should know about the cryptocurrency that is touching $2500

Bitcoin has been in news for past few days. One of the reasons is that, a few days ago, the WannaCry ransomware struck the world and made headlines. One aspect of this attack, however, was the demand by the attackers to be paid in Bitcoin rather than traditional currencies of Dollar, Pound or Euros.

However, we are much interested in the second reason. Bitcoin touched a lifetime high of $2400 last week and will soon be touching $2500. Which means if you had bought Bitcoins in the period July 2010 to December 2013 when it was $7 to $25 a piece, you could be a multimillionaire now. Bitcoin as a currency that was debunked and criticized by central bankers of almost all nations has now suddenly become the toast of the Internet. Why? Through this article, we explain what is Bitcoin and how it is produced (mined)!

New Age Currency- Bitcoin Cryptocurrency

Bitcoin is a virtual currency of the Internet also called “cryptocurrency”. A person known only by the name of Satoshi Nakamoto introduced the world to Bitcoin back in 2009. His true identity still remains hidden though many websites have claimed to have identified him or rather found him, over past 8 years.

Bitcoins in simple terms are virtual coins that are transferred over the internet.  A bitcoin like mentioned earlier, is a currency, meaning it has a foreign exchange value just as the Euro does against the US Dollar. However, the only difference is that dollars, pounds, and euros can be stored in your pant wallet while Bitcoin can only be saved online. The reason such cryptocurrencies are in demand is because of their ability to be transferred directly between individuals bypassing the banking system and thus making the sender and receiver of every bitcoin transaction nominally anonymous though he/she can be tracked through blockchain exchange.

Bitcoin is a digital currency that isn’t regulated by anybody leave alone any central bank. Therefore it has no interest rate, repo rate or any other rate that central bankers decide to levy on their respective currencies. It is a currency that is generated by painstaking mathematical computations and policed by millions of computer users called ‘miners’. Bitcoins are basically electricity, converted into a long string of code that has monetary value. The value of a single bitcoin also varies just as any other currency with it hitting a high of $1000 USD in 2015 – the same time when its popularity spread into mainstream conscience and it has dipped significantly since before rebounding again in 2016 and now touching lifetime highs of $2500 per bitcoin.

Bitcoin Mining

Now that we understand what a bitcoin is, the next thing is to understand how is it generated. One way to get bitcoins is to buy one through many of the online Bitcoin exchanges. You will need to have a bitcoin wallet installed on one your devices or use an online wallet by one of many service providers and then one can send and receive bitcoins just as one would emails. Bitcoin is underpinned by a peer-to-peer computer network made up of its users’ machines, similar to the networks that underpin BitTorrent, a file-sharing system. Bitcoins are mathematically generated as computers in this network carry out complex number-crunching tasks – a procedure termed bitcoin mining.

Bitcoin mining is a serious business with many tech companies manufacturing special computers called ASIC computers. These ASIC computers cost lots of moolah and are capable of doing the painstaking calculations for bitcoin mining.

bitcoin mining

Once you have installed a Bitcoin wallet, you will receive an encrypted address with the ability to generate more whenever needed. This address can then be shared with anyone from whom you wish to receive payment in the form of bitcoins. This system is secured by a concept called blockchain. Workers or miners are paid freshly created bitcoins for verifying Bitcoin transactions.

The mathematics of the bitcoin system was created in such a way that there is an upper limit to the number of bitcoins that can be mined. The ceiling is said to be around 21 million. The mining of bitcoins gets tougher and tougher the closer we get to the ceiling. Being unable to be regulated by any agency, Bitcoin also has the added advantage of not having it value diluted because a government somewhere decided to jump onto the bandwagon and release bitcoins of its own.

If you did not buy bitcoins when they were available for $7-25 a piece, you probably missed the bus but you can always buy them now with a hope of a single bitcoin touching $10000 as predicted by many bitcoin aficionados.

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Bitcoin Crosses $1,000 Barrier For The First Time In Three Years

Bitcoin Crosses $1,000 Barrier For The First Time In Three Years

Bitcoin Jumps Above The $1,000 Mark After Three Years

The price of Bitcoin breached the $1,000 mark on Monday on its first day of trading in 2017 for the first time since December 2013 making it the best-performing currency of 2016.

According to CoinDesk, after breaking through the $1,000 mark on Sunday, the world’s leading digital crypto currency was trading at $1,027 US per Bitcoin on Monday, which is an increase of more than three percent within a day. It is now within reach of its historic high of more than $1,200 reached in 2013. Other crypto currencies that have risen in the wake of Bitcoin, includes Ethereum, Ripple, and Litecoin.

The blossoming digital currency, which has been criticised as a vehicle for a range of evil characters from drug dealers to tax evaders to operate, outperformed all its central-bank-issued counterparts with a 125% increase in value in 2016.

Bobby Lee, chief executive of BTC China, one of the world’s largest Bitcoin exchanges, told CNBC, “We are seeing the aftermath of zero interest rates run amok. So, Bitcoin is a healthy reminder that we don’t have to hold on to dollars or renminbi, which is subject to capital controls and loss of purchasing power. Rather it’s a new asset class.”

So, why has Bitcoin been rising so rapidly? Some analysts attribute it to uncertainty over the global economy, and especially the election of Donald Trump, while others believe that some investors treat it as a safe-haven, like gold, at a time of global uncertainty. Further, Bitcoin’s government-free nature makes it very attractive for people looking to protect themselves from unrest in traditional markets. In addition, the biggest reason of the recent price spike has been the drop in value for the Chinese Yuan and Indian rupee.

“The growing war on cash, and capital controls, is making Bitcoin look like a viable, if high risk, alternative,” told Paul Gordon of digital currency firm Quantave.

Bitcoin was launched in 2009 as a bit of encrypted software written by someone using the Japanese-sounding name Satoshi Nakamoto. Encrypted digital coins are created by supercomputers and then traded online or exchanged for goods and services by a network of users. Bitcoin is decentralised unlike traditional currencies such as the dollar or the euro, which require the sponsorship of a central bank.

 

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Japanese police arrest CEO of MtGox Bitcoin exchange one year after its demise

Japanese police arrest CEO of MtGox Bitcoin exchange one year after its demise

Mark Karpeles of Mt.Gox arrested in Tokyo

Will we finally get to know what happened to the 744,408 bitcoins lost by Mt.Gox?

Do you remember Mt.Gox? Once upon a time, during the heydays of Bitcoin, Mt.Gox Bitcoin Exchange was considered to be the top Bitcoin exchange in the world. It rose from the ranks to become one of the biggest exchanges in Bitcoin before collapsing into a heap, just as rapidly in 2014.

The entire Mt.Gox saga is blamed on a certain Mark Karpeles by the bitcoin lovers and bitcoin community because Mark Karpeles is the head of Mt.Gox Bitcoin Exchange.

After more than a year after being offline and owing the $390 millions to Mt.Gox stakeholders, including the investors and bitcoin depositors in lost bitcoins, the Japanese police on Saturday finally arrested Mark Karpeles

A spokesman for the Tokyo Police said that France-born Karpeles, 30, was suspected of manipulating data on the exchange’s computer system in 2013 to falsely create about $1.0 million, a petty amount considering the amount of bitcoins lost by the exchange.

The police are also investigating his possible involvement in the disappearance of 744,408 Bitcoins which equals to a whopping $390 million at current rates. It was not immediately clear if the Tokyo police would press for more charges against Karpeles, who has so far denied any involvement in the missing bitcoins.

The Bitcoin which was once making daily news headlines and new highs in 2014 was completely shaken out of stupor when Mt.Gox happened. The Bitcoin which was trading at $1500.00 at the start of the year never really recovered from the body blow dealt by the Mt.Gox saga.

You can read all our articles on the Mt.Gox saga here.

Mt.Gox and its owner, Karpeles had at that time alleged that there was a bug in the software underpinning Bitcoins that allowed hackers to pilfer them. This bug was supposedly exploited by the hackers to pilfer 744408 bitcoins from the exchange.

On Saturday, local media, citing police, said investigators suspect Karpeles knew details about the missing Bitcoins which were reportedly transferred to an account controlled by him — without notifying depositors.

Japan’s top newspaper, Yomiuri carried a report stating police suspect that Karpeles repeatedly transferred clients’ Bitcoins into his own account for speculative trading.

The exchange — which once boasted of handling around 80 percent of global Bitcoin transactions — filed for bankruptcy protection soon after the cyber-money went missing, admitting it had lost 800,000 bitcoins amounting to $387 million.

Karpeles later said he had found some 200,000 of the lost Bitcoins in a “cold wallet” — a storage device such as a memory stick that is not connected to other computers.

Mt.Gox never really recovered from the fraud or hack and officially declaring itself as bankrupt. As soon as Karpeles announced Mt.Gox was filing for Bankruptcy proceedings, the depositors and investors started baying for his blood. The investors of Tokyo-based exchange demanded answers, and called on the firm to publicise its data so that hackers around the world can help analyse what happened at MtGox.

“They say it’s under investigation. That’s all they say,” a French investor told AFP last year at a creditors’ meeting which was held after the alleged hack attack on Mt.Gox in Tokyo. “They seem to refuse to make public more precise information about MtGox’s own (information) and how and when it was stolen, if it was really stolen.”

On his part, Karpeles tried his best to avoid the law by refusing to travel to the United States, where it was certain that he would be arrested for questioning for the fraudulent dealings at Mt.Gox.

Hopefully the bitcoin lovers, users and investors, depositors in Mt.Gox, who lost their hard earned bitcoins will finally know what went wrong at Mt.Gox and whether Karpeles was actually responsible for ruining the exchange.

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Top 10 security tips for protecting your virtual Bitcoin Wallet

i will check on how its is gng,, lets see how it goes

Top 10 security tips for protecting your Bitcoin Wallet

You all may be using Bitcoin, a very useful cryptocurrency. However as proved by reports, Bitcoin wallets are vulnerable to security which can be curbed by using 10 protective tips.

Bitcoin is an innovative payment network which has revolutionized business transactions and taken the cyber world by storm. It is the first “decentralized digital currency.” This is peer to peer i.e. P2P transaction which does not involve any banks or any intermediaries which means the users do not have to bear the fees for their transactions.

This has a world wide network as it is joined to the several currency exchanges where the currencies can be exchanged for other currencies of that country. Bitcoin resides in a user’s virtual wallet on the computer or even smartphone device. The transactions are faster and it is an open source network means no one owns this. With all these its pros, however Bitcoin has its cons as well.

The major drawbacks of Bitcoin:

  • Security issue as the transactions are virtual it is highly vulnerable to hackers and malware defects. Next the transactions are based on encryption for protection however if user misplaces or forgets the decodes then the Bitcoin cannot be used and all money is gone.
  • Irreversible: Once transaction is made the money is gone from the account is gone forever and if there is any error it cannot be reversed again unless the receiver returns the money.
  • Theft:  Bitcoins if stolen will still retain their value so it is again a loss
  • Anonymity issues: For each virtual wallet user has to maintain Bitcoin address hence user’s identity is anonymous however the protocol displays the transactions in public so number of transactions made by the address can be traced. This problem can be tackled by using a tool like TOR to mask computer IP address and hence increase the privacy.

Considering all the above drawbacks users needs to pay extra attention to safeguard their Bitcoin wallets and their identity from the digital theft. This can be done by using the below 10 security tips:

  1. Avoid using Wallets on the smartphones: User should make it a point to never make any transactions through the smartphones as this device is prone to thefts and also to hacking. It is always preferable to keep the virtual wallet data on devices which do not have any internet connection, such a storage is known as Cold storage. This is especially in cases where user handles huge amounts of money transaction in Bitcoin.
  2. Versatile Bitcoin client: Bitcoin client allows user to change to a new address with each transaction. By using the versatile Bitcoin client user can successfully hide their IP address and their privacy in the public protocols. Here one more advise to the user would be maintain day to day transaction wallet and keep different wallets as per their use  i.e. using separate transaction technique.
  3. Identity protection : User needs to be more careful while giving away information in the social networking sites and must avoid giving the Bitcoin address as much as possible.
  4. Encryption is a must: Wallets are stored on the virtual sites hence using a strong password is a key to protection and prevention of data breach. Using DESlock+ can help user to create a very strong password to encrypt their vital and sensitive virtual wallets from thefts and hackers.
  5. Secured backup of the virtual wallet: When the wallet is stored it is advisable to take regular backups of the wallet by using regular updates, changing its location and keeping the data in encrypted format.
  6. Escrow Service: As already mentioned the Bitcoin transactions are irreversible and when user is into a transaction of buying or selling anything it becomes very difficult as the person on the other end is unknown. In this case the “Escrow Service” comes in handy. Here buyer will send bitcoins to the Escrow service and now the seller would send the product across to buyer. Once buyer receives the product they send notification to the escrow agent to make the payment to seller. This is a safe method to ensure error proof transaction.
  7. 2FA and Hardware Wallet: Since Bitcoin works on virtual concept and internet connection, Two-Factor Authentication i.e. 2FA, is indeed a necessary requirement when using the online storage services. Also this supported with the online service of Hardware Wallet would give the much required protection.
    •  2FA : includes a second layer of protection wherein after passwords the system sends in a verification code on trusted device so it becomes a bit difficult for hackers to invade this protection.
    • Hardware wallet : It is a device that stores a part of a user’s wallet securely in mostly-offline hardware which has its many uses.
  8. Use of Multi signature addresses: This is mainly useful for high profiles and Corporate. Sometimes if many users are using the Wallet then it becomes difficult to make out if some anonymous user misuses the Wallet. Mostly if there are several employees in a corporate firm who need an access to the wallet for making payment then for each user a sub wallet can be created which is encrypted and then they can be given access to the main wallet. In this case any kind of misuse can be caught and it is safe also. This also involves use of more than one key in such a way that the keys are installed on different equipment which are under the observation of authorized personnel, so now to steal the Bitcoins the attacker needs to get all the keys stored on different equipment and this is not an easy task.
  9. Regular updating of systems: User must follow an essential routine of updating their systems on regular intervals. This implies to the OS of their device, any other programs which run on it as well as the Bitcoin clients. Along with all this a strong security solution to tackle the virus attack and malware is a must in the device where user carries out the Bitcoin transactions.
  10. Shredding of Virtual Wallet: The Shred command in Linux systems ensures that system overwrites the file with some random data and then it destroys the file. So a similar method can be opted by users to destroy the virtual wallet when user feels it is not longer needed. It is advisable to get rid of the virtual wallet by double checking that it has been destroyed properly and check that there are no threads or copies left of the wallet either created by user or by the system and if so even that needs to be destroyed.

Techworm has tried to bring  some of best tips which users can use and secure their Bitcoin Wallets and their virtual money. By taking some extra efforts users can definitely protect their virtual wallet from the crooks who are ready to steal them.

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