GamersGoneTech’s Jason Schaumleffel has a good video post up on YouTube about how Bitcoin users can keep their money safe. This will be a good lesson for all of you new Bitcoin holders who bought low over the weekend.
First, Schaumleffel mentions he has yet to find any online wallet with which he feels 100% safe keeping his coins. “If it’s not in your physical possession,” he says, “there’s a very good chance it could get stolen.”
With that kind of vulnerability, one option is for a user to download the Bitcoin wallet to his or her computer.
That’s a proposition ripe for anxiety. Now, you’ve got thousands of dollars in Bitcoin on your $300 laptop. If that thing crashes or gets stolen, sorry ‘bout ya.
So, here are some ways to provide extra security to your offline wallet.
First, “always, always, always encrypt your wallet,” Schaumleffel says. That — if your password is good — is a pretty good guarantee against anyone who steals your stuff from being able to actually get into your wallet.
OK, that still leaves you without access to your Bitcoins. What now?
Schaumleffel says he backs up his wallet.dat file in three or four various places: A flash drive that he keeps in a safe-deposit box, for example. The main point is to keep that wallet.dat file secure in whatever way works best. Encrypt it, then hide the drive somewhere.
“And when you’re using exchanges,” he notes, “don’t keep your money up for more than a day.”