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How To Store Your Bitcoin And Keep It Safe: Beginners Guide

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Store your Bitcoin

How To Store Your Bitcoin And Keep It Safe: Beginners Guide

Store Your Bitcoin

You need to understand that the “how” you store your Bitcoin goes a long way to determine its safety. It doesn’t matter if it’s for investments purposes or as a medium of exchange. Bitcoin is a digital currency, and just like paper money (fiat), you also store it in wallets.

The underlying reason for storing Bitcoin is to keep your private keys safe, but accessible to you whenever you want to make transactions.

Also Related: How can I start investing in Bitcoin in Nigeria

Since the invention of Bitcoin and other digital currencies like Ethereum, Cardano, Ripple, etc., people have lost their coins. Peradventure your Bitcoin is lost or stolen; there is absolutely nothing you can do to get it back.

This article guides you on the best and safe way to store your Bitcoin to avoid a preventable loss. Some of the best ways to keep your Bitcoin and other digital currencies safe is by storing them in wallets. You can either store your Bitcoin in a hardware wallet, multi-signature wallet, cold storage wallet, hot wallets, and so on. We will discuss these Bitcoin wallets later in the article.

Why Do You Need To Store Your Bitcoin?

The reason for storing Bitcoin can be summarized as follows

  • To prevent accidental loss of your cryptocurrency
  • It is a verification that the Bitcoin is genuine
  • To ensure your privacy and protect yourself against spying
  • Protecting yourself against theft
  • To have easy access to spending or moving your Bitcoin

Storing Bitcoin ensures that your private keys are safe and your coins are easily accessible. It is also a way to confirm that you received “real” Bitcoins while preventing an adversary from spying on you.

Also Read: 5 Questions to ask before investing in any cryptocurrency

What is a Bitcoin wallet?

We have agreed that we can store our Bitcoins and other digital currencies in a wallet. We must have heard of Bitcoin wallet, Bitcoin hardware wallet, offline Bitcoin wallet, etc. What do we mean by this Bitcoin wallet? Just like your physical wallets, if you lose the keys, you may not gain access to your money again.

Your wallet generates a master file that stores both your public and private keys. You must backup this file in case the original file is damaged or lost; else you risk losing your funds. You can store your private keys in different places like your mobile device, computer, or a piece of paper.

You have to note that your wallet doesn’t stay on any single device; rather, it resides on the Bitcoin blockchain. The same way your banking app doesn’t truly “hold” the money in your checking account. In terms of security and safety, the safest option is Bitcoin hardware wallet. Meanwhile, wallet apps work well and are relatively safe and secure to hold your Bitcoin.

The most prominent hardware wallets leverage unique layers of security to ensure your private keys are not stolen. However, if you lose your Bitcoin hardware wallet, the coins will be gone unless you have a backup of the keys. On the other hand, the least secure is the Bitcoin online wallet. The online wallet allows you to store your Bitcoin on an exchange.

Online wallets are risky because a third party holds the keys. For most people, it is easier to set up an online wallet. Now you are faced with choosing between your convenience and the safety of your Bitcoin. Most serious Bitcoin investors employ a hybrid strategy; holding a core long-term amount offline while maintaining a spending balance in a mobile account.

Types Of Wallets To Store Your Bitcoin

Let us consider the different wallets that you can use to store your Bitcoin and other digital currencies.

  1. Cloud Wallets

These wallets exist online, and the keys are stored in a distant server that is run by a third party. They often have a more user-friendly interface, although you will trust a third party with your private keys. It means your funds are more susceptible to theft. Good examples of these cloud wallets include Coinbase, Blockchain, and Lumi wallets. Also, most of these cryptocurrencies like Bitcoin have their native wallets. Coinbase and XAPO offer additional security features to prevent theft.

There are many things to consider before going choosing a cloud wallet. You will have to trust the security measures put in place by the third party. It is essential to be sure that the host won’t abscond with your money or close down and restrict your access to your account.

  1. Software wallets

You can install software wallets directly on your computer, hence giving yourself control over your keys. Most of the software wallets to store your Bitcoin have relatively easy configuration and are free. Meanwhile, it is your sole duty to ensure the safety of your private keys when using a software Bitcoin wallet. In a case where your computer is hacked, the adversary can gain access to your wallet and your Bitcoin.

Although you can download the original software Bitcoin Core Protocol which takes a lot of space, most of the available Bitcoin software wallets today are “light” wallets. These Simplified Payment Wallets do not download the entire ledger; they, however, synchronize to it. It is essential that you confirm the authenticity of a wallet to ensure you download the original copy. Some nefarious programmers create clones of various digital currency websites and offer downloads without charge. If you make a mistake to download such applications, your account can be hacked.

  1. Mobile wallets

These mobile Bitcoin wallets are apps for your smartphone. It comes in handy when you want to pay for something using your Bitcoin or if you want to buy, sell, or send Bitcoin while on transit. All online wallets and a majority of the desktop ones all have mobile versions.

Bear in mind that many online wallets will store your keys on the phone, hence the possibility of losing your Bitcoin if you lose your phone. It is always good to have a backup of your keys on a different device and ensure to print out your seed phrase. Good examples include TRUZACT, Luno, Trust wallet, etc.

  1. Hardware wallets

They are generally more secure because they are mostly offline and hence improbable to hack. Meanwhile, they can be stolen or lost, hence the need to always backup your keys. Most large Bitcoin investors keep their hardware wallets in secured locations like bank vaults. Notable examples of hardware wallets include Trezor, Keepkey, and Ledger.

  1. Paper wallets

They are more secure because they are not connected to the internet; therefore, they cannot be hacked. However, you need to keep them away from fire and water. They are pieces of paper that contain the private and public keys of a Bitcoin address. It is suited for the long-term storage of your Bitcoin or for giving out Bitcoin as a gift to friends and family. They are easier to lose; you have got to be very careful with your paper wallet.

Conclusion 

There are lots of options available when you want to store your Bitcoin in Bitcoin wallets. Therefore, you have to consider safety and accessibility when choosing your most preferred Bitcoin wallet. For your contributions and questions, kindly use the comment box provided below.

 

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What is Cryptocurrency And How Does It Work? 

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Obiex finance website

Cryptocurrencies are decentralized digital assets that operate on blockchain technology that in turn operates by storing a ledger of every transaction on all nodes powering the blockchain. 

In layman’s terms, blockchain technology is like a record keeper, it collects data (in blocks) and links one block of data to another, forming a chain. The data on the blockchain is open for all to see and cannot be easily altered. Blockchain technology can be used for a variety of use cases besides cryptocurrency, ranging from voting to crowdfunding, keeping health records, etc.

Using Bitcoin as an example, nodes are computers connected to the network to mine Bitcoin,  – this collection of independent nodes working together is what makes the network decentralized.

The decentralized nature of cryptocurrency is down to the creators recognizing flaws in traditional banking & financial systems like governments and financial institutions acting only in their best interests and not in the best interest of the common man, leading Satoshi Nakamoto (the creator of bitcoin and blockchain technology) to take steps to rectify that.

Related: What are NFTs?

To make cryptocurrency transactions, you will need to have a set of both public and private keys that will act as passwords protecting your crypto wallet. 

The Public key is connected to your wallet address, allowing you to share the address with others to receive cryptocurrency, while the private key is known to only you and is what you will use to approve outgoing crypto transactions from your wallet. 

Trading Cryptocurrency on Obiex

Obiex finance website

With the popularity of cryptocurrency trading currently at an all-time high, the biggest challenge for many rookie traders is selecting which cryptocurrency exchange to trade on.

If you fall in this category, the immediate priority should be finding an exchange that allows rookie traders to make trades easily, doesn’t charge extra fees and is completely secure. That exchange is Obiex Finance.

In this guide, you will be shown how to navigate the Obiex mobile app & website easily and what to do to get started with making cryptocurrency trades. 

Getting started with Obiex Finance 

Obiex Finance is a digital asset exchange and financial technology (Fintech) platform that gives its users the ability to easily execute cryptocurrency trades from anywhere regardless of their skill level.

Their commitment to ensuring that users get the best experience is shown in how they allow instant swaps from volatile coins like Bitcoin to stable coins like USDT, and vice versa, without confirmations. In a market where the value of crypto can fluctuate wildly, this feature is especially valuable as it allows users to seamlessly switch between making profits to saving those profits in a more stable currency before the value drops.  

To create an Obiex Finance account, simply head over to their homepage, click on “sign up”, fill in the required fields and verify your email address. After that, create wallet addresses for your crypto assets and you’re ready to start trading!

The cryptocurrency available for trading on the Obiex Finance platform are: Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB), Polygon (MATIC), Dogecoin (DOGE), Tether (USDT), Binance USD (BUSD), and USD Coin (USDC).

Getting Started with Cryptocurrency trading

After creating your Obiex account, you need to follow these simple steps:

  1.     Have a Trading Strategy: Trading cryptocurrency without having a strategy in place is the easiest way to lose your money. You will need to research the various crypto trading strategies thoroughly and choose the one that best suits your needs and temperament. For example, if you’re a patient person who is content to make smaller, safer trades over a long period of time instead of making riskier trades, then scalp trading is the best trading strategy for you. There are also other crypto trading strategies such as Swing trading, position trading, Arbitrage, dollar cost averaging etc.
  2.     Pick the cryptocurrency you’d like to trade: There are several cryptocurrencies available on Obiex Finance such as Bitcoin, Ethereum, Binance Coin, Tether etc. Selecting which cryptocurrency to trade is usually down to making a choice; whether to stick with the safer, more established cryptocurrencies like Bitcoin or to go with the more volatile coins that have a high upside and an equally high-risk factor like the Dogecoin which can move in either direction based on what Elon Musk tweets.

It is also important to note that when you pick a cryptocurrency to trade, it would be wise to ensure that the cryptocurrency matches the strategy you pick. For example, if your preferred strategy is patient scalp trading, then investing in volatile coins that have a high upside but carry a lot of risk is not the wisest move. 

To swap crypto on Obiex Finance, add the wallet of crypto assets you’d like to swap, send the crypto to the wallet you just created, navigate to the ‘swap’ option on your dashboard, and select the coins you’d like to swap. You will receive the swapped coin in your wallet balance immediately without waiting for network confirmations.

  1.     Securely store your cryptocurrency: The same way you’d protect your goods and profits if you had a physical store is the same way you need to protect your cryptocurrency so it doesn’t fall into the wrong hands.

You can store your crypto securely on your Obiex wallet but if you want an alternative, physical wallets are also an option. Physical wallets allow you to store your crypto in secure hardware, offline storage device reducing the likelihood of online hackers stealing your hard-earned crypto. This is a list of reliable physical wallets you can use.

Conclusion

If you’re a newbie to crypto trading, the keyword is patience. Taking the time to properly understand the market before making trades will stand you in good stead. While risks occasionally pay off, a patient, long-term strategy is required to make consistent profits. For more information about trading as a newbie, you can check this out to understand unfamiliar crypto terms and to learn more about spot trading and futures.

Obiex Frequently Asked Questions | Obiex FAQs

  • Will I be charged a fee when I swap coins on Obiex? 

No you won’t. While other crypto exchanges charge for trades and require confirmations to execute swaps, Obiex allows you to make free, instantaneous swaps without the delay that comes with waiting for confirmation. This also helps you avoid unnecessary losses.

  • Can I trade crypto on Obiex if I don’t know much about crypto? 

Yes, you can! The Obiex Finance platform allows both rookie and experienced traders to make easy, safe trades regardless of trading experience.

  • Can I send and receive crypto easily?  

Yes, you can. To send crypto, you will use your private key to execute outgoing trades and your public key/your wallet address to receive incoming trades. You can also send and receive crypto using just Obiex usernames.

  • Why do I need to swap coins? 

Swapping coins allows you to either acquire a coin you think is (currently) more valuable than a coin you have a lot of. You can also use swaps to ensure that your funds are invested in a more secure coin like USDT if you feel the volatile coin you’re holding is about to go on a bear run and lose value.

  • Do I get a referral bonus when I invite friends to use Obiex? 

Yes, Obiex has a referral campaign that rewards users that invite their friends and family to trade the minimum of $10 on Obiex.

 

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