Since the bitcoin price is rising, it is increasingly important to secure your bitcoins properly
The bitcoin price is rising for a while and the outlook is still good. When the value of Bitcoin is increasing, it will attract more hackers and thieves to steel your bitcoins. You don’t want your bitcoins to be stolen while the price is exploding!
The Bitcoin network secures itself
Satoshi nakamoto designed the Bitcoin netwerk perfectly. It is programmed in a way that the security will increase when the price is rising and visa versa. When the bitcoin price is rising, the profit for miners will increase. This greater profit will lead to more miners and this will cause a higher level of security.
Because of this self-regulating security system it is for hackers almost impossible to crack the Bitcoin network itself. Hackers will start hunting for bitcoins of individuals and online platforms. A recent case is the Bitfinex hack, but bitcoins of individuals get stolen regularly too. Especially after the recent rise in price it is important to secure your bitcoins properly.
How to secure your own bitcoins?
Online theft is the biggest risk for your bitcoins. When hackers crack your bitcoin wallet, they can send your bitcoins to another address and you will lose them forever. To avoid this you should not store a big amount in an online wallet or platform. Its best to store most of it in cold storage.
Cold storage means that you keep the ‘private key’ of your bitcoin wallet offline, so that hackers can’t reach it. The most common ways of cold storage are paper wallets and hardware wallets. The advantage of a hardware wallet is that you are still able to make secure transactions.
Decide the risk factor for yourself
There are some downsides of cold storage. In case of a paper wallet the bitcoins are not immediately available to spend. To make an interest you will have to take the risk of storing them on an online platform. Currently the interest on bitcoin lending is 12%. When you keep 2/3 in cold storage, you will be able to make an interest of 4%, this is still much more than what the bank has to offer!