The crypto-currency known as Bitcoin (BTC) is growing increasingly popular for users to conduct their online trades. For those still unsure what Bitcoins are, they are a form of digital currency that can be instantly transferred to anyone in the world and at no point come into effect offline. In short, they are web only monies.
But here is the rub, Bitcoins operate without a central authority, which means that governments have yet to respond to their capabilities and, as such, have been the subject of security failures, yet on the plus side, they cannot be manipulated by any government, bank, organization or individual person. It also allows users to act with complete anonymity online.
Now, there are different types of merchants who accept Bitcoin from online marketplaces such as Amazon and Rakuten to payment and funding services like Paypal, as well as online casinos which allow players to gamble without risking their real-life money.
By storing their BTC in BTC digital wallets users can safely send, receive and store their BTC and thanks to the absence of financial institutional interference, maintain complete responsibility for their money. Of course, this includes security and it is for this reason that it has become popular for BTC users to create an open two separate e-wallets. The first of these is commonly referred to as a hot wallet and is connected to the Internet and used only for online transactions and daily activity. Because it is easy to transfer funds from BTC wallet to BTC wallet, this is topped up with the necessary amount prior to a purchase or whatever else the funds have been designated for.
Increasingly, this could mean topping up the accounts of online casinos. For very obvious reasons, BTC is perfectly suited for online games such as poker. Your hot wallet only contains the funds you are happy to spend, complete anonymity is offered and no one needs to know and, yes, it is safe. Especially by utilizing the duel wallet method, the second of which is referred to as a cold wallet. The purpose of the cold wallet is to store BTC savings and this is not connected to the internet, meaning hackers and other online threats have been made redundant should they try to access your BTC. You see, safe?
But what about getting the funds into said wallets? To top up the wallets, simply head to a Bitcoin exchange to convert your real money for BTC. The same applies should you wish to convert BTC back into real money.
Unfortunately, should your BTC get stolen, it is practically impossible to retrieve. Fortunately, there are workarounds to ensure your safety. In order to safeguard your Bitcoins from hacking and theft, enabling two-factor authentication is strongly recommended. Phone number verification is a perfect form of two-factor authentication and involves sending a one-time-only password to the user your conducting business with. This takes place over a separate communication channel such as SMS messaging rather than the IP channel or internet address that is being used by the Bitcoin exchange or hot wallet.
This way, payments can only be made after the receiving user has correctly entered the one-use password in the BTC exchange or hot wallet, and thus eliminates any unauthorized transfers on your account. Unless of course, the hacker also has possession of your mobile phone but that’s not BTC’s fault is it? As well as sending payments, two-tier security steps such as added phone number verification can also be required for registration, login, the resetting of passwords and authenticating changes applied to your Bitcoin account.
To surmise, Bitcoin theft might well be irreversible, but you can plenty to prevent it happening and ensure safety in your BTC purchases.