How to protect your private keys? Why is it crucial to store private keys in offline wallets?
One of the hottest topics in today’s time is crypto investments. People are enthusiastic about making investments in cryptocurrencies but are unaware of the ways or methods to protect their crypto assets. Cryptocurrencies like bitcoin are believed to replace fiat currencies in future, but these also make people liable to increasing cybercrimes in the financial world.
By keeping this in mind, you must know where crypto assets are stored, what proves ownerships of crypto assets and how to protect private keys from frauds and attacks. You can get complete knowledge of keeping your funds securely by visiting bitcoinscircuit.
What are the public and private keys?
If you are a cryptocurrency holder, you must be aware that crypto term in cryptocurrencies means cryptography. Cryptography is a way of encrypting and decrypting information to secure it from unauthorized access. Bitcoin is the trending cryptocurrency that is based on blockchain technology for its working. All the bitcoin transactions are recorded in a distributed public ledger known as the blockchain. Cryptography is also one of the most remarkable features of blockchain, which eradicates third-parties involvement and removes the interference of humans.
The miners use specialized computers with high processing speed to confirm and record a bitcoin transaction. To complete the entire process of verifying and validating a transaction, blockchain uses a digital key to match with encrypted mathematical equations. The digital keys are the public and private keys that are a long string of letters and numbers used to identify bitcoin wallets’ ownership. When a user creates a digital wallet, both the public and private keys are used. The public key is used to encrypt the data, whereas the private key is used to decrypt the data.
Role of Private keys
To send and receive bitcoins and other crypto tokens, the users must provide their public key to another part to make a purchase or initiate a transaction. If you provide the public key to another party, it means you are providing them with your wallet’s virtual access. However, for a transaction to get completed, it must be digitally signed through private keys. In simple words, private keys work as a digital signature for the completion of a transaction. The private keys help prove the ownership of bitcoins and wallet. The blockchain is designed to approve the transactions automatically where the private key and public key of the wallet matches.
Private keys play a great role in accessing your wallet, and this is why you must never tell or expose your private keys to another person.
How to protect your private keys?
The best advice to protect your private keys is to store your bitcoins in a hardware wallet. Hardware wallets are in the form of hardware devices that stores the private keys in offline device. If your wallet isn’t connected to the internet, it will provide your bitcoins with high security. Still, it is advised to secure your private keys in a safe place.
You can also consider storing your private keys by using a paper wallet that prints the private key every time you need to use it. But it is a cold storage wallet that is vulnerable to hacks and cyber attacks. If that printed paper gets lost or steal, you can never recover it. The best way to secure your private keys is to create a backup of keys at different places, as it will help in recovering the wallet easily if your device stop working.
Another method of storing private keys is on a computer or mobile devices. These devices are highly convenient as they allow users to access and transfer the funds whenever required easily. Storing private keys on mobile devices means using hot wallets that are connected to the internet. There are high chances that your connected device may get attacked by hackers, and malware attacks may attack your private keys.
It would help if you always chose a hardware wallet to store your crypto tokens. These will provide high security to your coins and private keys because they are immune to cyber-attacks. Still, be careful while opening a phishing mail or link.