In the final part of our series on Bitcoin for property managers, we explore safe storage methods and additional ways to protect yourself from security risks if you accept the currency in your business. You can read more about the basics of Bitcoin in Part I and some drawbacks of the currency in Part II.
- How can you protect your Bitcoin wallet online and offline?
You need to protect your Bitcoin wallet with both online and offline security measures. There aren't many insurance and security products for Bitcoin, so you need to be cautious about online services that offer to store your money for you. The same goes for wallet programs you install on your computer. Since your Bitcoin wallet contains only an encrypted private key that is connected to your balance, you need to protect the key to ensure that no one can access your funds.
Keeping some money in your wallet and storing the rest elsewhere can also protect you against theft. Different wallet programs use a variety of encryption mechanisms, so you should save the hidden keys for all Bitcoin addresses. Store wallet backups in an encrypted online format, as well as offline, for increased security. In addition, you can create a paper wallet to store your money offline by writing or printing a new Bitcoin address and private key on paper. You can send money from an existing address to the new address if you want to increase the security of your Bitcoin finances. Finally, regularly back up both your online and offline wallets to account for any recently changed Bitcoin addresses, as well as newly created addresses, which offers increased protection of your funds.
- How can you ensure that your Bitcoin exchange transactions are as protected as possible to reduce any security risks?
Bitcoin exchanges have had robberies in the past few years, so choose an exchange that reduces your risk as much as possible. The Coinbase wallet and exchange platform, for example, is insured through Aon and provides users with added security for their funds and transactions. Another option for users looking for additional protection is Elliptic Vault, a Bitcoin storage service insured by a company in the U.K.
Bitcoin transactions are not subject to national or international regulations, so they require extra caution. For more information about ways to protect yourself while accepting Bitcoin for transactions in your property management business, check out the following links: