In 2020, the talk of a cashless society was happening in earnest among both conspiracy-minded people and non-conspiracy thinkers. Going cashless has in some circles been a topic of conversation I find runs in some regrettable cases toward the most baseless conspiracy theories such as the pending arrival of the Antichrist and other such nonsense.
Since the pandemic began some in the cryptocurrency community have more sensibly discussed whether America should move toward a cashless society and toward other solutions including cryptocurrency as a way to provide safer transactions (presumably “safer” refers to germs and viral transmission potential).
Do you know how to use Multibit Bitcoin wallet? If you don’t, there’s a very good reason for that. Simply put, you can’t. The Multibit Bitcoin Wallet was, starting in 2011 until roughly 2016, known as being an option for those on Mac, Windows, and Linux who wanted a lightweight or thin client that could open more than one cryptocurrency wallet at a time without the requirement of downloading the entire blockchain.
How does cryptocurrency cold storage work? The key to understanding this is remembering that digital currency has no government backing or protections. American consumers who place their money in a checking or savings account have a certain set of guarantees under the Federal Deposit Insurance Corporation, which insures such accounts up to a specific limit. But Bitcoin, Ethereum, and other digital currencies have no such protections and are viewed officially by the IRS as property rather than currency.
So cryptocurrency users have to find an alternative to protect themselves against theft, fraud, and other problems that can deprive them of their Bitcoin earnings.
If you’ve never used digital currency before, the first thing you learn is that you’ll need a digital wallet to store your digital money in. Protecting your Bitcoins using cryptocurrency cold storage relies on similar technology, but in this case, the wallet is offline, with your bitcoins stored on a platform not connected to the internet.
Why would you want to do this? One important reason for doing so is the fact that hackers can gain access to online digital wallets even with anti-theft measures in place. Cryptocurrency cold storage deprives a potential hacker of access to your digital belongings entirely save for physical theft of the physical keys or drives.
Your bitcoin wallet is “yours” because you possess both public keys and private keys — the private key is subject to hacking if stored online, in a process that experts call network-based theft.
How Cryptocurrency Cold Storage Works
Cryptocurrency cold storage prevents network-based theft by storing your private keys offline on a mobile device including USB drives, an air-gapped computer (one that is never placed on the network) intended to remain unconnected to the internet, portable, or hardwired hard drives. You can even write your private keys on paper and store them in a safe or secured drawer (not that writing them on paper is practical or an efficient way to do business).
When using the “on paper” version of cold storage, it’s best to use a QR code so you can easily scan the code and use your bitcoins or altcoins in a less cumbersome way. But keep in mind that if your “analog” private key is damaged — the paper becomes stained, torn, lost, etc. — you may lose your private key unless you’ve made a backup copy.
There are other forms of crypto cold storage you can try. Such as using a hardware crypto wallet, smartcard, or another tech to create offline private keys. Using any physical media in this manner requires similar care to the paper key option mentioned above — if your physical drive or device is lost, damaged, or destroyed, you risk losing your digital currency.
There is also a hybrid software digital wallet that splits private key storage and public key storage into online and offline platforms respectively. The offline version never connects to the internet when this process is used and provides an extra layer of protection in spite of functioning both on and offline.
Is it too late to mine Bitcoin? Opinions on this may vary, and it’s up to the individual investor to decide whether or not to take the plunge but it’s good to get a temperature check of the industry to see what experienced miners and investors think might be the future.
Some want to know about the economic incentives of running an Ethereum node. This practice differs from buying and selling Bitcoin or other cryptocurrencies because maintaining an Ethereum node requires more technical know-how from those who seek to make money or earn direct monetary benefits from doing so.