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The Safest Place to Store Bitcoin (BTC) in Australia

Cryptocurrencies are digital assets that process transactions through cryptography and do not exist physically, but in digital networks that work for their storage and processing..

Posted September 17, 2020

A person is holding a Ledger cryptocurrency wallet, one of the safest places to store Bitcoin (BTC)
A person is holding a Ledger cryptocurrency wallet, one of the safest places to store Bitcoin (BTC)

Cryptocurrencies are digital assets that process transactions through cryptography and do not exist physically, but in digital networks that work for their storage and processing. Each token has a value within the cryptocurrency market and they are not assets that we want to lose due to an error or by saving it in an insecure place. In the case of Bitcoin, there are many wallet services that allow you to easily save your tokens, although this time we will focus on the safest place to store Bitcoin.

Protecting your Bitcoins is very important and a task that can be very simple to implement. Especially since Bitcoin is one of the most difficult currencies for thieves since the money was created, but like any system, its security can be broken.

The dangers of a Bitcoin wallet hack or losing your keys

It is important to emphasize that there hasn’t been discovered a way to violate the cryptographic security on which Bitcoin is based. In fact, the security of Bitcoin is superior to that used by financial systems around the world. Cryptographically speaking, Bitcoin is highly secure, it could even be said that before a failure is found in Bitcoin, the cryptography used in all the fundamental pillars that currently sustain humanity would fail. We are talking about a failure that would affect banks, aviation, telephony, international security. However, Bitcoin exchange platforms or wallet services with not so strong security systems could suffer vulnerabilities, resulting in the loss of user tokens.

If a hacker manages to detect these vulnerabilities, they would be able to access the hot wallets of these platforms and steal the available amount of tokens, so it is always necessary to choose the safest place to store bitcoin.

Bitcoin (BTC) is illustrated as copper coins and wrapped with a private key of Bitcoin wallet address

Losing your private keys could also be fatal for your wallet, since you would lose full access to your account and thus, you would have to say goodbye to your tokens forever. For this reason, it is recommended to write down these private keys on a physical object so that, even if you lose them digitally, you can go to the last place where you can recover them. This type of incident is usually more common in hardware wallet users, since these devices enable the user to enter through private keys.

Why are Bitcoin wallets so important?

As Bitcoin and other cryptocurrency systems are completely decentralized, there is no one entity or organization that controls them. That is why wallets play a very important role in this ecosystem. They are a piece of basic infrastructure that allow us to operate with cryptocurrencies. In them we can see and consult our balances, in addition to the operations carried out and received. They also allow us to operate our funds with absolute control over them. We do not need the permission or authorization of any third party to carry out an operation.

In addition to providing us with security and confidence to carry out our operations, wallets also allow us to sign transactions without the need for private keys to leave the device. When we make a shipment to a person, we are transmitting a value in the form of a transaction. Therefore, we are transferring ownership of a certain amount of money to that person. In order for the network to confirm the transfer and the recipient to use the funds, a digital signature is required. In this way, it will be verified that whoever carries out the operation owns the funds and not a third party.

The illustration of Bitcoin (BTC) wallet as the safest place to store Bitcoin

How can I protect my BTC tokens?

Regardless of the safest place to store your Bitcoins or what types of Bitcoin wallets you use, you should always do your best to protect your tokens. Following these recommendations would make the job of anyone who intends to rob you extremely difficult.

Manage your own keys

You must be very cautious (and even distrust) of the online services where you store Bitcoins, whatever type they are. Analyze the service and its reputation very well before sending a single Satoshi or telling someone that you have them there.

Remember that in the previous cases of hacks everyone had a very good reputation. Even being trusted sites they can be compromised by a criminal. You must understand that the moment you do not have the Bitcoins, they can disappear. So, as far as possible, keep your Bitcoins in third hands for as little time as possible.

Keep your software updated

Another way to protect your bitcoins is to use an up-to-date Bitcoin client and wallet software. This regardless of whether you do it through your computer or smartphone.

That is, with this program, you will store your private keys and operate with them to make movements of your bitcoins. Well, in this case, make sure that everything on your computer or mobile phone is up to date and free of malware of any kind.

If you use a web wallet, your operating system may be infected or out of date, the browser may have a malicious extension that you are not aware of. For this reason, always keep your software updated and in optimal condition.

Always encrypt your private keys

Any reputable wallet program will create your private keys automatically. Not all follow good practices in the creation of these private keys, avoiding that it is easy to replicate, but the best known do.

An illustration of how a person is encrypting a private key to keep his/her cryptocurrency wallet as the safest place to store Bitcoin (BTC)

What is important to understand is that, once created, they are saved on your device in plain text, in some file or internal database. Wallets that incorporate good practices to prevent this have the option of encrypting the file where you save your keys.

Never forget 2FA

The double authentication factor is a security protocol used to verify the user’s identity when accessing a web service. Being quite a smart way to protect your bitcoins, this process sends a code to the user’s personal phone number and/or email to verify access.

It seems incredible, but it almost doesn’t matter that you use very long or complex passwords these days. 99% of passwords are stolen through phishing processes and not by brute force. With 2FA, someone could not just log in your account even if he obtains your password, since they need a second unique key provided at the same time through an alternative route.

Types of crypto wallet: What is the safest place to store Bitcoin?

Online wallets

They are the most popular and easiest to use wallets, but also the least secure, so they are definitely not the safest place to store your Bitcoins. This type of wallet stores the private key of the users on a server controlled by a company. In other words, the customer does not know or have the private key of the wallet and, therefore, the company that offers the wallet is responsible for maintaining and storing said private key.

The great advantage of online wallets is ease of use and accessibility, as they are accessible from anywhere and allow you to make payments and transfers quickly. They are ideal to have a small amount and be able to operate quickly and comfortably, but not to deposit all the savings there.

An illustration of people are using online cryptocurrency wallet as one of the safest places to store Bitcoin (BTC)

These types of wallets are offered by almost all exchange platforms, because when the purchase of Bitcoins is made, they are automatically deposited in an online wallet and then the user can choose whether to transfer them to another or leave it there.

Specific Bitcoin wallet for mobile devices

These wallets are known as Simplified Payment Verification (SPV) and are the most used to make small payments, as it is the closest thing to a physical wallet where we do not carry all our savings. These types of wallets usually download a small part of the blockchain relying on other nodes to have the correct information from the blockchain technology.

Computer wallets

They are quite secure and are known to store the private key of the wallet on the computer itself. Thus, it is more secure because we avoid the risk of the website being hacked. The private key is usually encrypted to provide an extra degree of security in case the computer’s security is compromised.

Physical wallets

Physical wallets are the safest, since they are not exposed to the internet and therefore it is very difficult for someone to steal our private key. These wallets are based on and function as devices that store private keys and allow payments to be made. Its appearance is similar to that of a common pen drive.

For people who make a lot of transactions and store a lot of Bitcoins, this would be the best solution to find the balance between very high security and speed. The safest place to store your Bitcoins are definitely hardware wallets, for those who were looking for the best Bitcoin wallet in Australia. These devices work all over the world and you can see them for sale almost everywhere.

Trezor is one of the hardware cryptocurrency wallets to choose as the safest place to store Bitcoin

If you follow all the security measures that you have read, you will have a pleasant experience with your handling of cryptocurrencies. It is important to mention that it is useless that we work and study so much to earn them if we do not know how to take care of them.

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Disclaimer: Information is current as at the date of publication. This is general information only and is not intended to be advice. Crypto is volatile, carries risk and the value can go up and down. Past performance is not an indicator of future returns. Please do your own research.

Last updated August 29, 2022

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