As much as consumers want to protect their Bitcoins at all times, there are so many different mistakes that can be made resulting in a financial loss. Some of these potential threats keep returning after seven years, and it is time to point out some of the obvious mistakes Bitcoin users tend to make.
Formatting Or Upgrading a Computer
Perhaps the most obvious way to lose Bitcoins is by upgrading the hard disk of a computer, or replacing the machine with an entirely new one. This seems to be an issue a lot of early Bitcoin adopters can relate to as a lot of them gathered some BTC while it was worth next to nothing. Keeping in mind how Bitcoin has been around for seven years now, many hard drives containing Bitcoin wallet information have been replaced.
While a lot of people may have taken out their hard drive and stuck a note to it, they may end up getting lost eventually. Especially for users who collected a larger amount of Bitcoin back when the price was very low, retrieving that balance today may result in a significant financial gain. This method of creating a “backup” is not advised, and users need to export their private key to a different wallet solution once they take out the hard drive.
The same principle applies to users upgrading their computer, as they often forget the important Bitcoin wallet data is stored on the hard disk. A new computer usually means the old one is being thrown out entirely, and if bought from a store, they may take the replaced device off one’s hands. Along with any Bitcoin wallet files left behind on the hard drive.
Keeping Funds In A Third-party Web Wallet Or Exchange
At its core, Bitcoin is all about granting users full financial control at any given time. For some reason, a lot of these users will store funds in an online wallet or exchange, both of which are fully controlled by a third party. If the company providing this service would shut down all of a sudden, there is no guarantee users will ever see their money again.
All Bitcoin users should move their funds to a wallet in their full control as soon as possible. There is no point in leaving Bitcoins in a wallet one does not control, although some web wallet providers allow users to export the private key to a different software solution. One can never be too careful when dealing with unknown third-party service providers.
Compromised Computer Security
The third most common way for consumers to lose their Bitcoins comes in the form of lackluster cyber security. Every computer in the world is vulnerable to exploits and hacking attempts, regardless of which operating system one uses. Granted, some OSes might be safer than the rest, but without proper precautions, that point is rendered moot rather quickly.
Installing an antivirus is just the first step, as users will also need to scan their computers for malware at regular intervals. Moreover, always be careful when visiting unknown websites, and opening email attachments, as these are two of the most common ways hackers try to infiltrate a computer. After all, there is nothing more annoying than losing Bitcoins as one wallet has been breached due to bad computer security practices.