Bitcoin makes moving money across the internet incredibly easy, but that ease comes with risks.There are plenty of ways someone can take your money, track your spending, or violate your privacy.Fortunately, there are also some straightforward measures you can take to safeguard your digital currency and keep your spending habits private.Here are our top five tips to protect your bitcoins: If the wallet you use for spending bitcoin also contains your entire bitcoin holdings, your savings will be vulnerable to various types of abuse.There is no limit to the number of bitcoin addresses (or wallets) that one person may have.Therefore, you could easily have an address for spending money, an address for savings and even an address for receiving payments.Recently, there have been several cases of web wallets being hacked and subsequently emptied.While web wallets are convenient, they should only be used like a checking/current account – as a place to store money you will be using in the near future.

Thus, if you only keep a small amount of spending money in a wallet that gets hacked, your losses will be limited.Remember, bitcoin does not work like a credit card.If you lose money fraudulently, that money is gone and there is nobody you can send a refund claim to.You can always contact the police, but it's unlikely they'll be able to get your bitcoins back.Above anything else, remember – never share your private keys with anyone else.If your wallet address (ie your public key) is the equivalent of your bank account number, then your private wallet key is your PIN.Thanks to taint analysis, it's possible to work out which bitcoin wallets are likely to be owned by the same person because of their transaction history.If you have a 'spending' wallet and a 'savings' wallet, regular transactions between the two will provide a pretty clear signal to hackers which one is the address of your savings wallet.Illegal activities aside, there is a legitimate reason to obscure that relationship, as it could allow someone to investigate how many bitcoins you have, which is something that should remain private.

Would you reveal all of your financial details to a stranger?The best way to obscure the relationship between your wallets is to transfer funds between them via a mixing service.Even if you keep your bitcoins in a wallet stored on your computer, you're still vulnerable to an attack.Bitcoin wallet applications save their data in a predictable location, thus they are particularly vulnerable to Trojan horse attacks.Such attacks have been reported by bitcoin users.litecoin chart dataA common solution is to keep your wallet's private key stored in an offline medium as an added layer of protection.bitcoin na eurThis offline medium could simply be a QR code printed on a piece of paper or a plain text file stored on a USB key.bitcoin usd preev

If you want to transfer bitcoins from an offline wallet to someone/somewhere else, you would first need to scan the QR code or enter the wallet's private key manually into an application like Blockchain.Once the application has displayed the balance of your wallet, you will be able to transfer bitcoins to the wallet address of your choice.As an added measure, you could encrypt your private keys so that if they were discovered, they'd be useless without your encryption password – just don't forget your password!bitcoin icon packWhile the other tips on this list have been about protecting your bitcoin fortune from other people, this one is all about protecting against yourself.bitcoin meets teslaAssuming you are using a desktop client to store your bitcoin wallets, there should be an option to back up your wallet(s).ethereum price org

Again, instructions will vary depending on your client.By using such features, the public and private key to your wallet will be saved into a file.That's all any bitcoin wallet needs to retrieve your balance, as the actual value attached to your bitcoin addresses are stored as data on the block chain, not on your wallet application.Once you have a file containing your wallet keys, you can put this anywhere: flash drive, optical disk, portable hard drive, on paper, etc.ethereum linuxYou can even store these files on a cloud-based backup system like Dropbox, which offers robust data reliability.1 coin bitcointalkHowever, given that no cloud system is 100% safe, it would be wise to encrypt such data before uploading, Truecrypt is one such tool that can encrypt your wallet files.bitcoin mining not getting shares

Another example of a secure cold storage wallet is something called a 'brain wallet'.This is essentially a secret combination of words and numbers you carry around in your head.When you enter your passphrase into a site like brainwallet, it will unscramble it so you can obtain your private key.For more information read our brain wallet guide.Safe theft image via Shutterstock The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies.Over the past few years, we have seen numerous threats to the security of data stored virtually and also to data in transfer during the execution of commercial transactions.With the increasing importance of cryptocurrencies like bitcoins, here are some tips on how we can protect your virtual wallet.It’s fair to say that of all the protocols for virtual currency transactions, Bitcoin has been the most successful in standing out and establishing its name in popular economic jargon.

Since its early days, this system has demonstrated advantages in terms of security, as well as weaknesses that have been subject to heated debate after various attacks on Bitcoin.One of the most famous recent incidents was the attack on the bitcoin exchange, Bitstamp.On this occasion, 19,000 BTC were stolen after the virtual wallets belonging to the exchange were compromised.The equivalent value of the resulting loss amounted to an astonishing USD 5 million.In a previous article, we mentioned Pony Loader 2.0, a Trojan capable of locating and robbing wallets stored on an infected system.This time, the threat was not limited to the theft of bitcoins, but it also sought to take cryptocurrencies from other protocols, such as Litecoin.So what factors are encouraging the conditions for such incidents to occur again and again, putting the future of Bitcoin in danger?To start with, bitcoin transactions are irreversible, since there is no official authority acting as an intermediary that is able to undo them.

This is critical when the people involved on either side of the transaction don’t know each other, since only the recipient of the payment can return it in the event of an error.Furthermore, stolen bitcoins retain their value and usability, and although numerous techniques have been proposed for tracking them, none of these have actually been implemented so far.Additionally, although the users of this currency remain anonymous through Bitcoin addresses created privately for each virtual wallet, the transactions in this protocol are public: anyone can see the list of transactions associated with an address.For this reason, it is important to take extra precautions to increase privacy, such as masking the computer’s IP address through a tool like Tor.So, how can you protect yourself?Taking all these issues into account, we can outline a number of measures to take in order to increase your security when making payments with this currency, bearing in mind that you need to protect both your identity and your wallets from potential digital theft.

For the purpose of privacy, and to hide your IP address, you can use a Bitcoin client that allows you to change to a new address with each transaction.Similarly, you can separate transactions into different wallets, according to their importance: a recommended practice is to keep a wallet for day-to-day transactions of small amounts, to be topped up when necessary.It is also important to be careful when sharing information about your transactions in public spaces like the web, either voluntarily or unwittingly, so as to avoid revealing your identity together with your Bitcoin address.When you need to buy or sell something and you aren’t sure who is on the other side, you can use an “escrow service.” In these cases, the person who needs to make the payment sends their bitcoins to the escrow service while they wait to receive the item they are buying.Meanwhile, the seller knows their money is safe with the escrow service and sends the agreed item.When the buyer receives the merchandise, they notify the escrow service to finalize the payment.

With regard to physical storage, as with any critically important backup policy, it is recommended to make frequent updates, use different media and locations, and keep them encrypted.Encrypting your wallet is crucial, especially when it is stored online.As you might expect, the use of a strong password is equally essential.With this in mind, you can use tools like DESlock+ to encrypt files that contain any sensitive information.Even better is to encrypt the entire system or user space where these files are located.When using online storage services, it is important to undertake an extensive selection process to determine which are truly reliable.Even then, you have to bear in mind that any provider could end up being subject to the discovery of vulnerabilities in its systems.As such, it is recommended to use two factor authentication and whenever possible, online services that support the use of hardware wallets.You should avoid using mobile devices, especially in the case of large sums of money, as they can be lost and/or compromised.

In these cases, it is actually better to keep the wallet on equipment that is not connected to the Internet.For corporate transactions, or any transactions that require a high level of security, it is possible to use multi-signature addresses, which involve the use of more than one key, the keys usually being stored on separate equipment in the possession of the authorized staff.This way, an attacker will need to compromise all the equipment on which the keys are stored in order to be able to steal the bitcoins, making their task more difficult.Naturally, any application can have faults, so it is essential to constantly update your Bitcoin clients and your operating system, as well as other products that run on it.Virtual wallets can be affected by any kind of malware that might be hosted on the hardware, so it is recommended to have a properly updated security solution to run full scans on a regular basis.Lastly, getting rid of a virtual wallet when it is no longer needed requires a careful process to check that it has really been completely destroyed.