The Bitcoins are stored in a software program known as the Bitcoin wallet. Technically, the Bitcoins are not saved anywhere. A private key for each Bitcoin address is stored in the Bitcoin wallet. It gives ownership of Bitcoin balance to the owner and allows sending and receiving of Bitcoins. The four main types of Bitcoin wallets are desktop, web, hardware, and mobile. Here is how to backup Bitcoin wallet.
How to Backup Bitcoin Wallet: Step By Step Guide
Like in real life, your Bitcoin wallet must be secured too. Obviously, your wallet will be stored in a safe place but a backup is necessary to avoid any security threat. Backing up your Bitcoin wallet can guard you against many human mistakes and computer failures. If your mobile or computer has been stolen, it lets you recover your wallet easily. Basically, you have to open the wallet you want to back up and search for ‘Backup Wallet’ or ‘Export Private Keys’. Finally, save your backup onto an external media.
Wallet.dat is the method being used by Bitcoin Core and others to back up your wallet. This file contains keys to spend outputs, transaction information, addresses, and other metadata. This file has a different location based on the Operating System. For backup, copy the file onto an external media only you have access to, such as USB drive.
Another method to backup Bitcoin wallet is BIP 32. It verifies key pairs from a single seed. Then, this seed creates a master private key which can be used for any BIP 32 wallet. To back up the wallet, create a QR code or copy the master key to a text file, encrypt it, and store it at an external media. Moreover, another method is BIP 39 which produces mnemonic sentences which denote a seed as the master key.
When backing up your Bitcoin wallet, ensure these safety measures.
Encrypt Online Backups
Make sure you encrypt online backup of your Bitcoin wallet as anything that is stored online is at risk to theft. A good security practice is to encrypt any backup that is being exposed to the network. Also, encrypting your Bitcoin wallet on your smartphone lets you set up a password for anyone trying to withdraw funds from it; this helps protect again thieves.
Make Regular Backups
Regularly backup your Bitcoin wallet to ensure all recent changes to Bitcoin addresses and all new Bitcoin addresses recently created have been included in the backup.
Backup the Entire Wallet
Some Bitcoin wallet uses private keys which are hidden internally. If you are unable to back up the entire wallet, you will be unable to recover a huge part of your funds from the backup. Make sure you have all the hidden private keys too and not only the private keys for your visible Bitcoin addresses.
Try to use many secure locations to back up your Bitcoin wallet. Single points of failure are bad for security. Moreover, you can also use different media for back-ups such as CDs, USB keys, or papers.