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With Bitcoin leading the way, virtual currencies have grown bigger and stronger in recent years. But with their increased usage has come a rise in hacking and fraud. And since regulatory framework is lagging, Bitcoin owners have little recourse when their digital wallets get robbed.

Bitcoins are accessed through keys – addresses and passcodes – that are kept in a Bitcoin wallet. If this digital wallet is not secured, hackers can potentially steal the keys and gain access to the currency.

Cold storage is the best way to secure a digital wallet. It involves storing Bitcoins offline – away from Internet access. While the method is less convenient than encrypting, it foils hackers. Keeping some money in the system for regular spending reduces the trouble of digging coins out of cold storage for everyday use.

Commonly used cold storage methods include Paper Wallet, which involves printing the public and private keys onto paper. It usually has a QR code that can be scanned for quick transactions.

A USB drive can keep secret keys. They can be stored in a safety deposit box to ensure security. Sounds wallets keep the private keys encrypted in sound files on products like compact discs. Another option is a hardware wallet, which is a small device that offers convenience, a micro-storage device backup and a QR code scan camera.

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