Cryptocurrency is a decentralized virtual currency built on an innovative peer-to-peer technology called “blockchain.” No centralized bank, government regulator, or other institution backs these digital assets. Suppose, for instance, that user “A” transmits funds directly to user “B” without going through a third-party payment processor and staying anonymous the whole way through.
Many businesses and cryptocurrency payment platforms are evolving as they see how they can earn from working with crypto assets. 2020 and 2021 were the years of the cryptocurrency boom when they found tremendous support globally, repeatedly surpassing their all-time highs. As a result of these events, the amount of interest in crypto has risen exponentially.
The crypto industry has become highly competitive, and there are numerous factors why this is happening. A cryptocurrency is appealing to businesses because of its reduced transaction fees, exceptional convenience, increased sales, and security, as well as its ability to protect merchants.
As new dangers emerge, new innovative and robust security solutions are coming out on a regular basis. A cryptocurrency wallet is one of the most popular and widely used protection methods. However, since many investors are new to the system and might not understand how to protect their assets securely, hackers are constantly finding new methods to steal funds.
Why and how should businesses hold crypto?
There are two effective methods to secure your funds in the most efficient and safe way.
Hot Wallet
A hot wallet is a type of wallet that is always accessible online. Such a wallet is also used to instantly send and receive cryptocurrencies and track how many coins you hold. Hot crypto wallets interact with the blockchain network, allowing you to use them on the go. Their job is to make it easier for the cryptocurrency network to update transaction information for every coin you use on the decentralized blockchain ledger. Moreover, a hot wallet is undoubtedly an effective method for a person to quickly access and store their cryptocurrency.
So why do users and businesses decide to utilize hot wallets? Primarily because of their simplicity and effectiveness, especially when using them for minor operations with your crypto funds. Since it is always available in the digital network, a hot wallet is an excellent method to execute your trades, purchases, and exchanges of all assets practically as soon as you decide to do so. This is generally favored by small business owners and newcomers, who prefer to start with more accessible solutions.
However, remember that since such wallets produce the private keys to your money solely on internet-connected devices, this might lead to vulnerability since it lacks robust security compared to the cold wallet alternative.
Cold wallet
On the other hand, there is a “cold” alternative available. Crypto cold wallets are intended for digital currencies that are purposefully not linked to the Internet constantly. This is meant to fulfill the not-so-perfect protection the currently more popular hot wallets provide. In the era of increasing cyberattacks, more and more users are betting on the “cold” variant since it provides significantly higher security to your assets from cyber criminals, who could take your funds forever, leaving a minimum chance of recovering your losses.
That being said, businesses that use solely hot wallets become easy targets of cyber attackers. It would be best if you considered putting your funds into a cold wallet since the only secure way to prevent these cyber attacks is to disconnect the major part of your funds from the Internet and keep them stored “offline.”
What does it look like? First of all, devices that store keys to your funds most often come in the form of a USB driver or a particular disk, varying from basic to more complex solutions.
Also, you can use the classic way and write down your data (your private keys) on a piece of paper and store them in a safe place. Numerous progressive wallets provide convenience to crypto users since they feature, for example, unique QR codes that can be scanned with a camera.
Since these solutions are meant for long-term crypto storage, they should be used for a significant amount of your funds. However, you should know that utilizing such a solution will require specific knowledge of how to set it up. When it comes to moving cryptocurrency, cold wallets are not as convenient as hot wallets, but they are much more secure.
There are also a few more precautions to take before you start using your crypto wallet and receiving Bitcoin payments.
Additional Security Measures
Multi-Signature
The multi-signature principle has been gaining significant traction for its ability to add an extra layer of security to crypto transactions. By requiring authorization from multiple parties before a payment can be processed, the risk of fraud is greatly reduced. This is because a single person or entity would not be able to carry out the transaction on their own. Appointed users must give their approval before any bitcoins or altcoins can be bought or transferred. In this way, everyone in the group has a say in what happens, making it much harder for fraudulent activity to take place.
Backup
Back up your whole cryptocurrency wallet from the very beginning and do it frequently. A history of constant data backups is the best way to restore the funds in your digital wallet if there is a hardware or software failure. Make copies of all wallet data files and store them in different secure locations. It is highly recommended to use a USB, hard drive, or other reliable alternatives. In addition, create a secure complex password for the backup.
Software Updates
Another essential strategy is always using the latest version of the software. A wallet that is operating on outdated software can be vulnerable. A newer version of wallet software will have a more robust security system, which will protect your cryptocurrencies better. As a result of the general strengthened security of the wallet, if you have your software updated, you might also prevent serious problems from occurring. To keep your cryptocurrencies protected at all times, keep your smartphone or PC operating systems and applications up to date.
Final thoughts
Looking for the most effective ways to hold your cryptocurrency? Then begin by selecting several different crypto wallets. Purchase a hardware wallet for the majority of your assets and download a crypto hot wallet for quick access. Send your cryptocurrency to your wallets, write down your recovery keys, and store them securely.
Once you’ve sorted out the technicalities, you can weigh in on different options of wallets to accept Bitcoin payments. Remember that early adopters have a substantial advantage. People worldwide are interested in finding enterprises that accept cryptocurrencies as payment for their services. If you are ready to accept Bitcoin for your online business, you will be able to work internationally since the modern crypto communities know no boundaries.
