fbpx

Bitcoin Security 101

Happy Cybersecurity Awareness Month! We thought this would be a great time to talk more about bitcoin security. 

“Is bitcoin safe?” That’s one frequently asked question for people just getting into cryptocurrencies and digital assets. There are a lot of ways to answer that, but in terms of security, the answer is “bitcoin is as safe as you make it.”

The reason? There is a stark gradient of bitcoin security —  from the very loosey, goosey security procedures to the lockdown, custom vault-level setup.

Bitcoin is only as safe as you make it

The spectrum of bitcoin security exists because bitcoin enables a high degree of freedom to choose how it is handled. Bitcoin’s permission-less network means that there is no single organization or corporation making the rules. Instead, people are free to contribute to bitcoin’s development, run and maintain its network, and use its code like currency – all because they can. That’s the beauty of an open-source, internet-scale technology. 

Since bitcoin is very much at the financial frontier —  buying, selling, and holding bitcoin takes a certain level of personal responsibility. 

Which brings us back to cybersecurity month and the need to implement some basic security best practices. 

One of bitcoin’s greatest features is that it is a digitally-native way to store value and share value over the internet without the need for banks, credit cards, or other forms of financial middlemen. While the foundations of bitcoin’s underlying network are secure, (in fact, Bitcoin is the world’s most secure distributed computer network) the internet-based nature of digital currency —  being accessed through web browsers and mobile apps — makes users susceptible to the same kinds of hacks, scams, and security breaches that are common elsewhere on the web. 

And because it is so valuable —  and increasing in value all the time —  poorly-secured bitcoin wallets and exchanges are a perennial honeypot for cyber thieves and fraudsters.

How to keep your bitcoin safe: The top five security tips

At Coinme, bitcoin security and ease of use are top priorities. Below is a list of tips and suggestions from our customer support team.

  1. Treat your bitcoin vouchers like cash: Coinme makes it easy to deposit cash and receive bitcoin through our network of Coinstar kiosks. After making a transaction and receiving your voucher from the Coinstar kiosk, be sure to treat that voucher like cash and load the info from the voucher into your Coinme wallet as soon as possible. Protip: Don’t ever take a picture of your voucher or share it with someone else (and especially don’t share an image of your voucher on social media). Never buy or use vouchers for someone else or accept money from outside sources to buy vouchers.
  2. Treat your wallet like a vault: Once you create a Coinme wallet, you will be able to access it from any internet-connected device. That’s great in terms of ease of use, but you should get in the habit of following some of our best practices outlined below. Remember, never share the details of your wallet like your email or password with anyone.
  3. Don’t trust, verify: This is almost like a mantra in the bitcoin space. Practice sending and receiving small amounts of bitcoin before engaging in larger transactions. If sending bitcoin, make sure you have the correct address by doing a small send first and waiting for several confirmations.
  4. Beware of fraud and scams: There are plenty of fraudsters and scammers looking for ways to steal bitcoin. As a general rule, be very skeptical of anyone asking about specific information related to your wallet or other personal details, especially online strangers. 
  5. Messages from Coinme: We will never ask you to send us bitcoin and we will never request access to your wallet. If you see messages like that from us, you can assume that they are an attempt at fraud from an outsider. If you are ever not sure about the legitimacy of a message or communication from Coinme, please chat with our customer support team.

Bitcoin security best practices

These tips and suggestions apply to the bitcoin and digital asset space more broadly. Remember, bitcoin security is about personal responsibility. In order to keep your bitcoin safe, your level of security should scale with your bitcoin holdings.

  1. Wallet safety begins with a strong password: As you accumulate bitcoin and other digital assets, it is a good idea to continually update and increase wallet security. One simple tip: use unique email addresses and lengthy passwords when you create bitcoin wallets (consider using an encrypted password manager, like LastPass). 
  2. Beware of public internet: In terms of security, being aware of your digital surroundings is just as important as being aware of your physical surroundings. Do not use unsecured public or heavily-trafficked internet connections when performing tasks or transactions that might reveal personal details. 
  3. If it sounds too good to be true, it probably is: The best way to avoid potential scams is to ignore them in the first place. Any inbound request looking for information (or offering prizes, money, or once-in-a-lifetime opportunities) are most likely scams and should be treated accordingly.
  4. Be a low-key bitcoiner: Bitcoin is a fun and exciting technology. One way to help create more adoption and more access is to educate your friends and family. But just remember, it’s one thing to talk about bitcoin, and it’s another to talk about bitcoin holdings. Openly advertising where and how much bitcoin you have could open up security issues (one solution is to talk to one of our private client advisors). 

 

We hope you will use cybersecurity awareness month to level up some of your bitcoin security practices.

Stay safe out there!

Coinme Blog.

Understanding Bitcoin Network Fees

Bitcoin network fees, or bitcoin mining fees, refer to a sum that is charged to complete a bitcoin transaction. These bitcoin fees are tacked onto the amount that the sender inputs and added to the total transaction amount. Like the bitcoin network itself, bitcoin fees are dynamic. When the bitcoin network gets busy, or when there are more transactions happening, the bitcoin network fees increase.

Read More »

Bitcoin Giving

Whether you are feeling good about the recent bitcoin market gains, or just generally feeling the giving-back vibe of the holiday season — there are plenty of ways to donate bitcoin to great charities and nonprofit organizations.

Read More »