How to Protect Bitcoin Using a Hardware or Cold Wallet

Whether you think it’s the future of currency or it’s due to collapse like the Ponzi scheme it might actually be, bitcoin and bitcoin futures are — at least for now — really, really, valuable.

Valuable enough that, as of this writing on the afternoon of Monday, December 11th, bitcoin was trading at $17,261 and bitcoin futures were trading for $18,550 on the Cboe Futures Exchange.

(If you’re just getting familiar, here’s a quick explanation of what bitcoin futures are all about.)

Here’s how bitcoin futures actually work. pic.twitter.com/JibH5dRLot

— CNBC (@CNBC) December 11, 2017

But unless you want to wind up like Slovenian cryptocurrency mining marketplace NiceHash and lose $64 million in bitcoin to hackers, if you own any, you should protect it.

Here’s a brief breakdown of three ways to do it:

Create a cold wallet: Essentially an offline version of the web-connected “hot” wallet many Bitcoin owners use, a cold wallet is a physical paper with a QR code linking to digital funds. It makes the funds harder to immediately access, but it can be kept secure in a physical safe instead of online.
Get a hardware wallet: Similar to a cold wallet, a hardware wallet is an offline physical device, like a USB flash drive, that can hold your cryptocurrency. Accessible via a PIN number and an additional password, hardware wallets are secure but can get lost. Also, if you forget the PIN or the password, you’re in trouble.
Use common sense: If you do keep your currency online, protect it the same way you do with the rest of your digital life. “We encourage all customers to take a few foundational, and free, actions to put them on a much more stable security footing,” Philip Martin, the director of security at cryptocurrency exchange platform Coinbase, told Wired. “Use a password manager, use two-factor authentication, leverage enhanced security protocols for your email address.” Turning on Google’s new Advanced Protection feature also might not be a terrible idea.