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Top Tips on How to Avoid Losing Bitcoins
According to research, more than 15% of all bitcoins worldwide are lost forever without any trace. That implies that any owner can lose their bitcoins anytime if they do not take the necessary precaution to protect them. The most common possible ways one can lose their bitcoins include;
- Cryptocurrency hacking
- Ponzi schemes
Apart from the ways listed above, there are plenty of other things that can cost you your precious coins. It is essential to understand how one can lose their bitcoins as it helps you implement the best strategies to protect yourself against the losses. Here are some of the ways to avoid losing your bitcoins. Therefore, it is advisable to transfer your bitcoins off exchanges and into wallets that you can control to protect yourself against cases such as PrimeXBT Scam.
Top 5 Tips to Avoid Losing Your Bitcoins
These are some of the precautions you can take to protect yourself from losing your bitcoins.
Backup Your Bitcoin Wallet
If you want to protect yourself against losing your bitcoins, you need to back up your wallet today. Many virtual bitcoin wallets come with a backup protocol that you can use to back up your wallet to 12, 18, or 24 words.
The primary reason for backing up your bitcoin wallet is to store your private keys in a place where you can access them in the future. Doing so protects you from losing your bitcoins in the event you lose or damage the wallet. Software and computers can also fail, costing you a lot of bitcoins. Backing up your virtual wallet ensures you are protected against coin loss if your computer is stolen or gets damaged.
Transfer Bitcoins off Your Smartphone
Many individuals lose their bitcoins because they carry a lot of them on their smartphones. It is relatively easy to lose or misplace your smartphone as you walk around with it every time. That’s why it is not advisable to have more bitcoins in your smartphone than the amount you would carry in cash.
If you keep large amounts of bitcoins in your smartphone, you should consider transferring them into a hardware wallet or cold storage. These methods have user-friendly software components, making it easier for any individual to use them. Additionally, they are practically a safer way to keep your bitcoins compared to your smartphone.
Transfer Your Money off Exchanges
One of the greatest mistakes that owners make is leaving their bitcoins sitting on an exchange. These popular bitcoin-based exchanges are examples of places where you do not control the keys. Therefore, your account may indicate a bitcoin balance, but you do not practically hold the keys. The truth is that these exchanges can get hacked, and you could lose all your bitcoins.
Make Arrangements for the Future
Since the future is uncertain, it may be a good idea to plan how your family can access the bitcoins if something happens to you. There are cases where bitcoins are lost forever because the owner has gotten seriously sick or died. Therefore, it may be a good idea to plan your family for the future.
It is advisable to involve a lawyer in the planning process to ensure the plans are consistent with the local laws. Doing so ensures your decisions cannot be challenged in court when you are no longer around.
Store Your Bitcoins in Separate Wallets
You do not keep all your cash in one wallet the same way you need to keep your bitcoins in separate wallets. You should divide your bitcoins and keep them in multiple wallets to protect yourself against massive losses in case of theft or damages. After all, it is perfectly legal to own more than one bitcoin wallet.
Today, there are plenty of ways that one can lose their bitcoins. Therefore, you may need to implement precautionary steps to protect yourself against losing your coins. There are plenty of other methods to protect your bitcoins, but the list above covers the top ones.