Physical Bitcoin is increasingly becoming popular among investors and entrepreneurs, gaining fame steadily over the past few months.
Bitcoin enthusiasts all over the world have turned to this unique Bitcoin wallet because of its ability to prevent hacking attempts or any security breaches.
We have seen many stories of investors circulating across the internet regarding the loss of Bitcoins in various security breaches and hacking attacks.
This trend is likely to continue as cybercriminals are targeting to get substantial amounts of Bitcoin holdings to fund their activities.
As a result, the popular and ardent investors who have counted losses in such attacks have diverted their attention to physical Bitcoin in a bid to avoid losses necessitated by hacking.
The Bitcoin network has seen a lot of improvement in the past years. There is a significant degree of maturation, growth and upscaling of specialization.
The advancements have encouraged more investors and entrepreneurs to venture into real investments.
Clearly, Bitcoin has been the most secure means for online transactions. It is unfortunate that sometimes there have been security breaches.
Basic principles of improving safety have been used to eradicate flaws in the security system.
Examples include the hardware wallets, the multi-signature transactions, wallet encryptions and now offline wallets.
Offline wallets have improved the security of Bitcoins considerably.
How is that possible?
The physical Bitcoin serves as offline storage for the digital currency. There is a private key to the Bitcoin wallet that is stored under a tamper-proof seal.
The owner of the Bitcoins will then be required to input the key so as to activate the digital currency online.
It is not possible for the digital Bitcoins to be used online without the owner having activated it.
Such mode of storage proves to be secure than going the online way. After activation of the physical currency, it can be transferred to the online wallet.
The investors can then quickly broadcast the Bitcoins to the public blockchain and spend it ordinarily.
Varied methods of physical Bitcoin storage
There exist many ways of storing Bitcoin offline, and there are different firms who offer physical Bitcoin products.
A good example is Denarium Bitcoin that stores physical Bitcoins in a gold-plated coin integrated into a decorated frame.
Offline storage of the funds is referred to as cold storage. If one is afraid that hackers may compromise their security keys, they may opt for this method.
The necessity of the offline storage
Technological advancement in enhancing the security of Bitcoins is commendable. Most investors are happy with this improvement. However, all security systems improvements that rely on the internet are still prone to security breaches.
It can be evidenced that earlier this year an epitome of the security violations occurred – the Bitfinex security breach – Bitcoins worth $72 million were stolen.
The physical Bitcoin considerably reduces chances of such security breaches occurring. It should be noted that once some Bitcoins are stolen, there will be a slump in the prices, and that means lower returns to the investors.
Low risk of theft
The physical wallet will reduce circumstances under which the Bitcoins are exposed to theft. Given the ambitions of eager investors, they have learned to trust the physical wallet.
The new entrepreneurs, on the other hand, having a task of venturing into the investment opportunity brought about by such assets, have taken the wallet as a safer way to begin their investment.
An investor using the offline wallets is not at risk of losing keys and the funds. If the keys are in cold storage, even if their mobile phones get technical problems or computer hard drives are erased, the owners will stand to lose less or absolutely nothing.
As for the question of whether long-term investment in physical Bitcoins will change the Bitcoin network forever, the answer is almost guaranteed.
The innovation brought about by the physical wallet is geared towards diverting the course of online theft and hacking.
Those investors and prospective investors who wish to get some returns online can trust the offline system of storage for now.
Who knows? The physical wallet will definitely make a positive impact on the Bitcoin networks. As to whether such innovation is to take the trading by storm, is subject to time.