How to protect your bitcoins or any other cryptocurrency

How to protect your bitcoin or your cryptocurrencyVarious solutions exist to keep its access credentials to its cryptocurrencies. But not all offer the same level of security.

3Fz9TcR7P6FNi7xkvaNqRnMkGGgTQBfqwX. No, your humble servant did not fall asleep on her keyboard. This is an example of a private key. A private key connects a holder of bitcoins or other virtual currency to his wallet, through a coded signature, and allows him to spend it. In other words, if a person manages to seize it, it will have access to your cryptocurrencies. So you have to balance the need to keep this combination within reach, to easily access its digital assets, and to ensure its confidentiality. There is no way that you scribble it on a flyer, keep it in a free access file on your computer or to communicate to a third party by e-mail. There are more, if not more, secure ways to store this data.

To protect your crypto below 1,000 dollars.

We can allow ourselves to leave them on trading platforms

First option available to holders of crypto-currencies, keep the private key on the servers of the trading platform on which they have invested. The problem is the risk of hacking and blocking of funds by the governments to which this solution is exposed.

“If tomorrow Paymium is hacked, you can lose everything”.

But they have set up guarantees. 98% of our customers' funds are not stored on servers online but in cold storage. It means that for each addresses there is no easy access to private keys. There is only need 2% of funds under working capital. But even those 2% are stored on offline computers. ”

A formula to favor for small amounts of digital assets under management, therefore. Below 1,000 euros, we can allow ourselves to leave them on trading platforms. Provided, of course, that it is exchanges well camped in the landscape and trustworthy. Kraken and HITBTC, for example, I trust them to manage part of my portfolio. Note however that, without going as far as piracy. These platforms may be temporarily interrupted in case of over-activity, and savers deprived of access to their assets.

Do Web wallets are safer than mobile wallets ?

Because your smartphone is a more attractive target than your computer for a hacker.

Alternatively, go through a software wallet. There are two types: web wallets and mobile wallets.  The last one as the name suggests, are available on smartphone. Security usually goes through a pin code when launching the application and a recovery phrase.

It's still pretty low as a security level. We're staying on the model of a single base that centralizes a multitude of data and that a lot of people are using.

Especially with mobile wallets. Your phone is clearly a more attractive target for a hacker than your computer. It is also easier to reach, especially because you change Wi-Fi several times during the day.

For added security, users can opt for deterministic wallets. Which generate a new address each time an inbound transaction is made and multi-signature. The wallet requests manual confirmation for any operation. This is particularly the case of GreenAddress.

The third scenario is to download the entire blockchain on his hard drive. Installing these programs is obviously a consumptive solution in disk space and memory. It count 150 gigabytes for the bitcoin blokchain. The advantage is that it is not need to put his trust in the hands of a third party to validate his transactions.

The user's computer thus becomes a stakeholder in securing the entire network. A solution that, admittedly, is not perfect, but which offers a satisfactory level of security.

Attacking the software of a cryptocurrency is still very complicated. Those I've heard of come from loopholes in the code of the smart contracts used to make transactions. Including the hack of The DAO, the organization Ethereum founded to create a cryptocurrency VC fund. and decentralized.

Hardware wallets are needed from several thousand euros in cryptocurrencies

But for the specialist, the ultimate is still the purchase of hardware wallets. As those offered by the French and world leader Ledger. They come in the form of a USB key. As long as the device is not connected to the computer, the assets are out of reach of dishonest individuals. In case of loss or theft of the object, the user has the opportunity to recover his cryptocurrencies through a recovery procedure. This is based on a word list defined when setting the device to the first use of it. Needless to say, this list must be kept preciously. “This type of device is absolutely necessary from several thousand euros in cryptocurrencies,” Karim Sabba preaches.

In the point of view of specialist in the analysis of the blockchain, it is above all the confidence that one places in the crypto-currencies and the way of managing his money which must enter into.

“If we do not see them only as tools of speculation and we have a management father, a long-term vision, it is better to go through hardware solutions.”

However, if we want just understand how it works, it is better to go through a mobile wallet or a service on a laptop type Electrum “. Count 95 euros for the Ledger Nano S, one of two solutions marketed by the manufacturer tricolor, whose price has suddenly increased in recent weeks …

How to protect your bitcoins or any other cryptocurrency
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