Financial safety and security should be a top priority for anyone considering investing in Bitcoins, and this guide will cover some of the risks associated with the Bitcoin digital cryptocurrency as well as the industry best practices for keeping your investment safe. While there are certainly many benefits to using Bitcoin for transactions, the fact remains that it is still an experimental digital currency, and while it is gaining in popularity there are also a number of security risks associated with it that you need to know about in order to keep your digital wallet and Bitcoin investment safe.
Lose Your Password, Lose Your Bitcoins
One of the key defining features of Bitcoin transactions is that there is a public security key and a private security key that is required to complete every transaction. The public security key is the one that defines the encryption protocol that makes Bitcoin transactions possible, and the private security key is a personal password that is chosen by the owner of the digital wallet. It is very important that you always remember this password, because if you lose your private security key for any reason then it can be close to impossible to access the Bitcoins that are stored in your account.
Digital Wallet Is Unencrypted By Default
Once you download and install your digital wallet software, it is important to become familiar with the functions and settings of the software which includes the encryption settings. The default configuration setting of the original Bitcoin digital wallet software are configured to be unencrypted, meaning that only the public key encryption is used for the transfer of Bitcoins. In order to protect the Bitcoins in your digital wallet to the fullest extent it is a good idea to activate the private encryption settings.
You Can Still Use Bitcoin Safely And Securely
Once you understand some of the potential cyber security risks associated with using a 100% digital currency then you can make sure that you are keeping your Bitcoin investment safe and secure by staying on top of any potential security threats. You can even keep your Bitcoins in cold storage which will protect them in a computer or flash drive that is not connected to the internet, so that there is no threat of them ever being stolen or compromised. By following these tips about financial safety using Bitcoin, you can confidently try out the new digital currency while keeping your investment safe from fraud.