This question is one that almost all newbies ask as they are concerned about the safety of their Bitcoin. Most of them do not want to lose their bitcoin before they have the opportunity to use it. This guide is tailored towards answering all the safety questions while giving information about the best ways to store your Bitcoin. There are a number of things you need to be aware of if you want to improve your Bitcoin security. They are: change of price, method of storage and third-party affiliations.
Bitcoin Security Storage
When storing your Bitcoin, there are a number of important things that you have to take note of. The first step to take is to get a digital wallet. A digital wallet works just as normal wallet does, it is used to store bitcoins. A private key is given to you once you store your Bitcoin in the wallet. It is very important that you keep this private key safe. If someone else gains access to the key, they can access your wallet and take all your Bitcoin. On the other hand, if you lose this key, you would not be able to access your funds anymore
Transactions Involving Bitcoin
To be completely safe and secure, you have to only perform transactions with reliable parties. Unlike with traditional banking, there are no rules or laws that will help to recover any currency lost as Bitcoin transactions cannot be retrieved. In the occasion that you send Bitcoin to the wrong receiver, it only takes the kindness of that receiver to return the currency back to you.
Issues Associated With Bitcoin
- Problems with Anonymity
The most important feature of cryptocurrencies is the anonymity that it boasts of. However, it is important to note that this anonymity feature is not completely true. There are ways to know who the wallet holder is during transactions despite the fact that personal data is not linked to the transactions or digital wallets. One of the ways that affect this anonymity feature is the requirement to reveal one’s identity during cryptocurrency exchange. More privacy can be gotten with the use of TOR browser and some select technical keys.
- Problems of Hacking
The problem of hacking is one that is very important and it should be taken very seriously as it poses a great threat to the Bitcoin network. Theoretically, it is very possible for the Bitcoin network to be hacked and for miners to gain control of over 50% of the Blockchain network’s power. This situation was close to becoming a reality in 2014 when Ghash.io almost obtained over 505 of the entire Bitcoin network. Many experts are of the school of thought that the attack hurts the attackers than the Bitcoin users. However, the Bitcoin community will work quickly to fix any attack on its network resulting in the attack lasting for only a minimal time. The cryptocurrency’s image will be damaged thoroughly if an attack of this magnitude occurs.
The problem of regulation is an important problem faced by Bitcoin users. Most countries are implementing regulations with regards to bitcoin. This can adversely affect the way the cryptocurrency is being used alongside other tax and legal allegations.