People have known and used Bitcoin for over a decade. But, the popularity of this cryptocurrency has attracted investors from all parts of the world. Bitcoin enables people to move funds from one user to another over the internet. Unlike conventional money transfer methods like bank wire, Bitcoin is efficient and reliable.
But aside from using Bitcoin to transfer funds, this cryptocurrency is also an investment asset. And it is attracting the interest of both individual and institutional investors. For quite some time now, people have used crypto exchanges like Bitcoin Prime to purchase and sell this cryptocurrency. Such a platform features trading bots that guide traders when deciding to buy or sell Bitcoin. They provide information that enables even individuals with limited knowledge of how Bitcoin works to trade.
Unfortunately, even scammers have realized the potential of Bitcoin. These criminals are looking for every opportunity to steal from innocent Bitcoin traders. As such, you need to learn safe ways to trade Bitcoin to avoid losing your hard-earned money to these crooks. Here are safe Bitcoin trading tips that should guide you.
Keep Separate Digital Wallets
Being digital money, Bitcoin is also stored electronically. And you have different types of Bitcoin wallets from which to choose. Keeping all your Bitcoin holdings in one wallet means you could lose all your savings or investment if somebody hacks it. Since you do not have a limit to possible Bitcoin wallets or addresses, you can have, consider having several. That way, you can use one address to send money, another one to save your funds, and another one for receiving Bitcoin payments.
Avoid Saving Bitcoin in a Web Wallet
You have probably heard cases of web wallet hacking. If somebody hacks into your digital wallet, they can empty it. Web wallets provide a convenient way to store and send your Bitcoin. However, use your web wallet as a current or checking account. It should be the place you keep the money you intend to use shortly.
For safety purposes, store a small amount of Bitcoin in your web wallet. That way, you will have limited losses if somebody hacks your digital wallet. Unlike your credit card, if somebody steals your Bitcoin, you have lost funds, and you don’t have a place to send a refund claim. Even if you involve the police, they can’t help you get your coins back.
Protect Your Private Keys
Do not share the private keys for accessing your Bitcoin wallet and sending money to anyone. Your digital wallet address is like your account number with a local bank. And your private key is like your PIN.
Using taint analysis, somebody can know Bitcoin wallets with the same owner due to transaction history. Hackers can get signals for the address of a savings wallet by checking your savings wallet’s regular transactions and spending wallet.
What’s more, avoiding sharing your private keys with other people ensures that nobody can investigate the number of Bitcoins in your savings. And this is something you want to keep confidential, the same way you can’t share financial details with strangers.
Use Cold Storage
Storing Bitcoin in a wallet on your computer doesn’t make you immune to attacks. The application of a Bitcoin wallet saves data in a location that a hacker can easily predict. As such, the Trojan horse can attack even cold wallets.
And some Bitcoin users have experienced these attacks. To deal with this problem, use offline media to store the private key to your Bitcoin wallet. That way, you will have an added protection layer. For instance, you can use QR code on paper or plaint text on a USB key.
These tips should ensure the safety of your funds when trading Bitcoin. Additionally, consider the best options for backing up your wallet. The instructions for backing up your wallet will vary based on your provider.