Wallets allow to control the custody of cryptocurrencies and generate one or more addresses to send or receive money. However, currently there are certain security problems that can lead to the loss of funds.
The storage and management of cryptocurrencies is established through digital keys, which together with addresses and digital signatures allow access to ownership of the funds. These digital keys are not stored on the network, but are stored in the wallets.
Therefore, through digital wallets it is possible to manage the ownership of cryptocurrencies and carry out any type of transaction. To be able to do this, you need two keys: a private and a public (similar to what would be a bank account number and the private key similar to the secret PIN). In this way, we could say that the ownership of cryptocurrencies is determined by who owns the private keys of these assets. Therefore, storing the keys in a safe place is of the utmost importance.
There are several ways to store keys. Within the same wallets, there are hot wallets and cold wallets. The former are managed through a mobile application, computer or other device connected to the internet; the latter do it externally, for example, via USB.
What happens if the keys are lost?
Until today, many stories have been released about the loss of cryptocurrencies due to the loss of keys. In fact, as reported by the New York Times, according to cryptocurrency data firm Chainalysis, an estimated $140 billion worth of Bitcoin has been lost, from owners who have accidentally lost their passwords or thrown away the hard drives they used to stored their assets.
Likewise, Wallet Recovery Services, a company that helps recover lost digital keys, shared that it received 70 requests a day from users trying to access their digital wallets, a number that is three times higher than a month ago.
Store keys securely
The key that allows you to access the funds and make transactions is a code that is generated by the system, and consists of long alphanumeric characters. Its complexity makes it almost impossible to hack it, even through the use of special programs.
However, this level of protection has a downside: it is almost impossible to restore access to an account if the key has been forgotten, lost, or even stolen. As this is the only way to access the wallet, the custody of the keys becomes a transcendental point in the possession of cryptocurrencies.
One of the solutions to avoid the problem explained above, is to acquire cryptocurrencies through vehicles regulated by international organizations, such as a fund regulated by the EU. These funds use security mechanisms and strong regulations, which allow access, maintenance and custody of these assets in the safest possible way.
Characteristics of regulated funds:
- EU financial regulation
- Regulated auditor (offers control: allows you to be sure that assets will not disappear)
- Regulated custodian (security in the custody of assets and keys)
- Regulated compliance officer
- Regulated risk manager
- Investment committee approved by the EU
- Crypto purchases
BTV Fund: EU regulated fund
BTV Fund is an investment fund that allows you to invest in bitcoins and other cryptocurrencies in a conventional way, solving the problems of purchase, custody and storage of the keys previously explained. In addition, it allows exposure to these attractive returns and makes it possible to do so without being a specialist in risk analysis in this sector and making the investment as safe as possible.
The Regulation offers the guarantee that the vehicle is guarded, audited and under the control of an international public body. In this case, BTV Fund is created under the umbrella of the MFSA (Malta’s financial regulator, this being a member of the EU and a third country by importance in Europe at a financial level).