Is Bitcoin safe? Learn strategies for keeping all your cryptocurrency secure.
The relative newness of cryptocurrency and the volatility that seems to characterize the market has many asking, “Is Bitcoin safe?”
You could — and should — ask that basic question of all digital and traditional asset classes — not just Bitcoin.
Doing so is one of the best first steps you can take in developing a crypto strategy because it prompts you to investigate the coin or token before committing your hard-earned funds to the project.
In this article, we’ll help you take that first step by discussing the question, “Is Bitcoin safe?” and outlining some of the strategies that can help keep your digital assets secure.
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Is Bitcoin Safe?
The answer to the question, “Is Bitcoin safe?” actually has two parts — each of which refers to a unique component of the cryptocurrency.
Those components are volatility and technology.
When you ask, “Is Bitcoin safe?” with volatility in mind, you’re likely asking if adding the asset to your portfolio will help you make money or cause you to lose money.
Even the most basic of research reveals that the price of Bitcoin can experience rapid rises and falls.
In 2022 alone, the price of a single BTC lost more than half its value and has yet to start making significant gains back toward its annual high of $48,000/coin.
If that had happened to a traditional asset class, those involved would likely have jumped ship as soon as possible. But that sudden drop, and Bitcoin’s relative stability since then, may signal a change in the market behavior.
Some see it as a sign that BTC is finally becoming more integrated into the retail sector and in the more traditional financial markets.
If that’s the case, it could help stabilize the precipitous rises and falls and contribute to the overall safety of the coin.
When you ask, “Is Bitcoin safe?” with technology in mind, you’re likely asking if there’s potential that someone could steal all the BTC that you’ve purchased.
While Bitcoin technology is very secure — thanks to public and private keys and other cryptography — and the network itself has gone its entire existence without being hacked, the potential for theft does still exist.
Most often, this happens at the individual level where bad actors use web trackers and cookies to amass information about the transactions and the individuals that initiated them.
With enough information, these bad actors can gain access to your BTC and steal it for themselves using methods like the ones described below.
But, if you protect yourself with some simple strategies (discussed later on in this article), the risk drops dramatically, and it becomes much easier to say yes if someone asks you, “Is Bitcoin safe?”
Possible Threats to Your Bitcoin
A rug pull is a type of scam in which the creator of a cryptocurrency, NFT, or some other digital asset convinces others to buy into their product or service and then abruptly abandons the project, disappears, and keeps the funds for themselves.
Keep in mind, though, that the rug pull scam isn’t unique to the cryptocurrency space and doesn’t mean that Bitcoin (or cryptocurrency in general) is unsafe.
Bad actors have been running rug pull scams (sometimes called exit scams) for decades before the internet and blockchain technology were even a thing.
That’s why it’s so important to learn as much as you can about this type of scam and keep a sharp, skeptical eye on any situation that involves your money.
For more on the types of rug pull scams out there and ways to protect yourself from becoming a victim, check out this article from the Binance.US blog: Crypto Rug Pulls: What They Are and How To Protect Yourself.
Though many of the best crypto exchanges offer strong security, they are, like any other website on the internet, still susceptible to unscrupulous hackers who would break in and make off with any funds they can get their hands on.
The risk of becoming a victim of this type of threat depends, in large part, on the crypto platform with which you decide to partner and highlights the importance of doing your own research before getting involved.
Phishing is a popular way for thieves to steal your information, which they can then use to access your exchange account and transfer the crypto wherever they choose.
These types of emails and direct messages are designed to look like they’re from a legitimate source and can include fake giveaways and fraudulent confirmation requests.
The ultimate goal is to get you to click on the fake link and give thieves access to your personal information or your crypto wallet.
Another threat to your Bitcoin is the SIM swap. If a thief obtains enough information, they may be able to obtain a new SIM card from your cellular provider.
With the new SIM card in their device, they can then reset the login information on your exchange account and gain control of the funds therein.
Strategies That Can Help Keep Your Bitcoin Secure
1) Do Your Own Research Before Making Any Moves
Before getting involved in any digital project — Bitcoin included — be sure to do your own research.
This includes taking the time to thoroughly examine the details of the coin or token, the team who developed it, and the blockchain itself before committing your hard-earned funds.
It’s also worth your time to research the crypto platform through which you’re going to purchase the BTC and partner with one that gives you:
- Access to a wide range of services
- Clearly-communicated transaction fees
- Easy-to-use controls
- Educational resources to help you make the right decisions
The more time you spend in the research phase of the process, the better prepared you may be to navigate the Bitcoin market.
2) Consider a Cold Wallet
Most crypto platforms provide a hot wallet to store your BTC.
These online accounts are convenient, but they can be less secure because they are connected to the internet.
To remove the potential for a thief to access the funds in the hot wallet, consider transferring them to a cold wallet.
A cold wallet is similar to a portable hard drive or flash drive that can sever the connection between the storage device and the host computer whenever you want.
To access it, you plug in the cold wallet when you’re ready to initiate a transaction and then remove it when the transaction is complete.
3) Never Share Your Private Key
In the general sense, a private key is a long series of letters (both lowercase and uppercase), numbers, and symbols combined in random order to create a password that you use to encrypt and decrypt messages (or data).
In the case of cryptocurrency, if you know the private key, you can access a crypto wallet and buy, sell, trade, or withdraw whatever you find there.
Because this series of letters, numbers, and symbols gives access to everything, it’s essential that you never share your private key and that you keep it as secret and secure as possible.
4) Keep Details About Your Bitcoin Private
When you make a good move in the crypto market, it’s only natural to want to celebrate with others. But, in this case, it’s better to avoid bragging and to keep all the details about your Bitcoin private.
If you talk about your financial holdings too publicly, you may come to the attention of the bad actors mentioned earlier who may try to perpetrate any number of scams to separate you from your BTC.
5) Set up Two-Factor Authentication
You can add another layer of security to your crypto account (be it a hot wallet or a cold wallet) by setting up two-factor authentication whenever possible.
With two-factor authentication in place, the platform provides an additional code — either via email or a push notification — that you must enter in addition to your username and password in order to gain access to your account.
Bitcoin Security Begins With the Crypto Ecosystem
When considering the question, “Is Bitcoin safe?” the final answer depends on the crypto platform you choose.
Pick an ecosystem you can trust and that takes steps to keep your crypto and personal information safe.
For example, Binance.US uses multifactor authentication to protect your cryptocurrency and Trust Wallet to make storing crypto easy, safe, and secure.
No matter what your goal is with Bitcoin (and cryptocurrency in general), choose a platform that offers:
- A clear fee structure
- A wide range of cryptocurrencies
- Educational materials
- Tools to help you control your portfolio like a pro
- An easy-to-use interface
You’ll be thankful you did your research on the front end and found the right partner.
To begin your crypto journey today, visit Binance.US.
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This material has been prepared for general informational purposes only and should NOT be: (1) considered an individualized recommendation or endorsement of any digital asset or services discussed herein; and (2) relied upon for any investment activities. All information is provided on an as-is basis and is subject to change without notice. We make no representation or warranty of any kind, express or implied, regarding the accuracy, validity, reliability, availability or completeness of any such information. Binance.US does NOT provide investment, legal, or tax advice in any manner or form. The ownership of any investment decision(s) exclusively vests with you after analyzing all possible risk factors and by exercising your own independent discretion. Binance.US shall not be liable for any consequences thereof.