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In 2014, The Bitcoin Exchange Mt. Gox, collapsed. Over 650,000 Bitcoins were lost. In 2016, $50 million worth of Ether was stolen from an organization that had just held an ICO called The DAO. In December 2017, the Korean exchange Youbit shut down when 17% of its digital assets were stolen in a hack. In January 2018, over $600 million worth of NEM was stolen from the Japanese exchange Coincheck.
What do these attacks tell us about cryptocurrencies? They tell us everyone needs to be very careful when managing digital wallets and spending Bitcoin or other cryptocurrencies.
Most crypto wallets aren’t completely secure. Let us imagine a scenario where a user has all their Bitcoin stored on an exchange. What if tomorrow the government told you that cryptocurrencies were illegal and blocked access to all the exchange websites? Accessing these assets would become challenging and perhaps impossible. It is entirely possible that these assets could be lost forever.
There are mobile wallets available that can hold digital assets on a user’s behalf. While bank deposits of regular fiat are usually insured by the government if a bank goes under, the same cannot be said for the start-ups that build mobile wallets. I could have a large number of Bitcoin stored in my mobile wallet one day and then lose it the next as the company goes bankrupt and shuts down its servers. Sure, I could claim my coins as part of the bankruptcy process, but this could take years. Who knows what Bitcoin’s price will be then?
Another wallet type is a desktop wallet. Control of these wallets is in the hands of the users, unlike exchange wallets or mobile wallets. But, there is still a risk here. What if my computer is stolen? What if I spill water on the keyboard and fry the motherboard? What if it’s destroyed in a fire? Unlike an exchange or mobile wallet, where I can login from multiple devices, there’s not much I can do if I haven’t backed things up properly. In each of these cases, I would lose my funds.
The key to securing digital assets is the private key. Digital assets are stored on a distributed ledger which everyone can see. In order to access them, a user must use a Private Key. This Key is a series of letters and numbers that is used to unlock digital assets. Wallets, where users are not in control of the private key, are always at risk of hacking or some other disaster. A wallet where the user is in control of the private key offers the most compelling security proposition.
Hardware wallets are the best way to secure digital assets. The Archos Safe-T Mini is a hardware wallet that achieves this goal. The Safe-T Mini is different from an exchange wallet or a mobile wallet because it protects the private key inside an external device that can be plugged into any computer. Even if a virus is present on the computer, the Safe-T Mini is still secure and your Bitcoin cannot be stolen. If the wallet is damaged or stolen, users can recreate the wallet using backup words.
Hacks, disasters, fires and theft. These are all things that can doom crypto. With a Safe-T Mini wallet, the chances of this decline significantly and users and rest easy that their assets will be around for the future.
Find out more about how to pre-order you Safe-T Mini and the technology behind this essential security device:
Visit the Safe-T Mini dedicated page
Purchase online via the Archos shop
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