You can use encryption with bitcoin wallet software for both desktops and mobile devices. While using a passphrase or a PIN does add an extra level of security, you need to remember that there is no such thing as perfectly safe computer software. Technology changes all the time and hackers use latest technologies to try and match passwords and find bugs and exploits in existing systems.
You probably already have antivirus software on your devices. When you install bitcoin software and start using digital money, you need to add even more layers because having an antivirus and encryption of your wallet.dat file is not enough.
It is a good idea to get anti-spyware and anti-malware software to protect your bitcoin wallet. Many of the software suites available on the market today are not anti-viruses but anti-virus products that contain a lot of various protection features.
A computer virus is a piece of code that can copy itself in order to obtain information or damage your hardware or software.
Mal-ware is a more generic term. Technically speaking, anti-viruses are mal-ware, but mal-ware also includes spyware, adware and ransomware, which are different from viruses.
For example, spyware would often remain unnoticeable on your device for some time. A virus damages your computer and spyware doesn’t. Usually, it will be running in the background and learning your Internet habits. Then, it will start showing you unwanted sales offers or try and re-direct you to the website of its creator in order to generate more traffic.
Other types of malware perform in a similar way. They may try to steal your bitcoins by trying to have you click on the wrong links, open email attachments that will execute code or download illegal information. Each of these scenarios could pose a severe threat to your devices and your bitcoin wallet, which is why you want to make sure that you are doing your best to protect yourself.
Not every email is dangerous, yet if you are not sure about the sender of an email, do not open any links or attachments from that email.
The best antivirus products on the market that include spyware and malware protection are not free, but most of them do have free trial periods during which you can test the software. When you start using bitcoin, you are taking full control of your finances and security should be a critical priority.
Bitcoin is a decentralized network, which in part means that if someone manages to steal your bitcoins, there is no central authority that you can email, ask to reverse a transaction or ask for any other kind of help. Because bitcoin and cryptocurrencies are a relatively new phenomenon, many of the government officials don’t even understand it and going to police and trying to file a police report may also not work.
The best protection is prevention, which is why you want to take the security of your devices into your own hands and treat it very seriously.
Storing physical bitcoins
One of the options to safeguard your coins is to store them in a physical form or in a paper bitcoin wallet. Yes, physical coins do exist. Each coin has its own price. Coins come in various alloys, most common of which currently is silver. Coins in gold and bronze are also available. A physical coin is both a collector’s item and a safe storage vault for bitcoins at the same time.
The most famous physical bitcoins were Casascius physical bitcoins. Their creator was Mike Caldwell from Sandy, Utah, also known as bitcoin user Casascius. He was selling the coins until November 26, 2013. Eventually, he was contacted by a subsidiary of the United States Treasury Department. The US Treasury told him that selling physical coins means that he is in a money transmitting business, which means he would need to register at the federal level and follow strict regulations if he wanted to continue selling the coins.
The coins were actual bitcoins because they contained a piece of paper that included digital value. Caldwell protected the paper indicating the value with a tamper-resistant hologram. Caldwell designed coins in such a way that it is possible to use them in face-to-face transactions. Each coin contained a private key. The first person to redeem the key would get the value of the coin. After that, the coin would have no actual Bitcoin value. It was impossible to read the key without destroying the hologram, which made the coins safe to use.
While Caldwell is no longer selling his coins, it is possible to store bitcoins in the form of a paper wallets using the same principles and making the coins completely inaccessible to online attackers.