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August 3, 2018

The Proper Way to Digitally Store Your Bitcoins

Unlike typical currencies which you either store in your bank account or carry on you in paper form, Bitcoin works a little bit differently; since it’s a digital currency, you’re mostly going to be looking at digital ways of storing it. To shed some light on the mystery, we’re going to reveal how this is done, and hopefully convince you that safely storing your digital currency is much easier than it seems, at least with sufficient amount of understanding.

Introducing the cryptocurrency wallet 
Much like you’re used to storing cash in a wallet, the cryptocurrencies are also stored in one, it’s just that it’s a digital one instead. With the help of various cryptocurrency apps, you can check how much of it you have inside and use it to pay for goods and services that support this payment method (as time goes on, the numbers of merchants that support it will be going up accordingly). 
Online wallets are perhaps the most user-friendly solution 
With a user-friendly interface, all you really need is a computer or smart device through which you’re going to be accessing your online wallet. Some storage providers like xCoins.io also allow you to purchase Bitcoin with your credit card or by using Paypal, which is another step towards comfort. 

The downside, of course, is that you’re entrusting the provider with all your hard-earned money, leaving it vulnerable to hacking attempts. Also, the platform could close its doors at any time, essentially taking all your funds with it. 
Offline wallets are suitable for those who like to take matters into their own hands 

If you don’t quite fancy the idea of entrusting a third-party provider with your Bitcoins, there is another way to handle the task; by storing them offline, either in a software or a hardware wallet. The former allows you to store them on your computer and the latter is basically a dedicated removable hardware device that does the same. 

Of course, the software wallets do have their own disadvantages; if your hard drive kicks the bucket, you can kiss your Bitcoins goodbye (however, this can be circumvented by doing your backups regularly). You also have to store them in an encrypted form so they’ll remain safe if a thief or a hacker ever gets access to your device. 
Hardware wallets are a good way to go if you’re worried about hackers. Since they stay offline most of the time, hackers will have a hard time gaining access to them. Obviously, their disadvantage is that they can get lost or stolen, so make sure to keep them in a safe place like a safety deposit box. 
A word on paper wallets 
If you don’t like the digital solutions for whatever reason, you can also print your private and public Bitcoin keys on a physical piece of paper. You can store them the same way you’d store your other valuables, ensuring they’re kept safely away from the public eye. Also, if you want to present them as a gift, a folded piece of paper with a ribbon over it lends itself perfectly to the occasion. 
Each method of storing Bitcoin has its pros and cons, and neither of them can provide you a 100% guarantee that your coins will remain safe. However, if you take the time to further educate yourself on the subject, there is little reason to worry. In the end, it boils down to the age-old question of security vs. convenience, where only you can make the call on what’s best.
Courtesy of Boris Dzhingarov graduated UNWE with major marketing.  Boris is the founder of MonetaryLibrary and Cryptoext. 

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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