What are they and where should you store them
The concept of mined coins is entirely different from purchased cryptocurrencies.
Mined Coins are the type of cryptocurrency that can be owned by anyone interested to do so. As a reward for mining, you get a portion of the newly released money. However, this process varies depending on what type of currency it is because each crypto works differently. One classic example would be Bitcoin, which has a limited number of Bitcoins that could ever exist - 21 million. The number will gradually decrease as time goes by until all Bitcoins are already mined - after approximately 100 years or in 2140 (source).
On the other hand, there are other types of mined coin currencies like Ethereum where Ethers are created with every new block. This means it doesn't have a limited supply which means it can be mined by anyone or anywhere in the world.
And because of this reason, you might want to start mining yourself if you have access to cheap electricity and free time in your hands. Or if not you could always purchase some mined coins for future purposes. As with purchasing cryptocurrencies, there are also necessary things that should be set in place to successfully store mined coins the right way.
Choose A Secure Wallet To Store Your Coins
A cryptocurrency wallet is a software program where cryptocurrencies are stored. The same concept applies when talking about storing mined coins since it is also considered as a form of digital currency after all even though what is being stored are not exactly money but instead codes for accessing your digital currency.
You could surely use a web-based wallet to store your mined coins provided that you trust the service provider and has a secured server. However, if you don't want to take risks then going for a hardware or paper wallet is highly advisable - both of these options give you total control over your stored coins. In using a paper wallet, what you get is just a piece of paper with codes written on it which can be accessed anytime as long as it is still in good condition. A hardware wallet would require an external device that can be connected to any computer through USB or other connection type and then the codes would be inputted into the system upon access. Many prefer hardware wallets because, unlike paper wallets where someone can easily copy down the codes and access your wallet, a hardware's physical component makes it harder for a hacker to gain access to.
Enable 2 Factor Authentication
Adding another layer of security helps protect your mined coins from being stolen or hacked. In setting up your wallet, you will be required to input an initial password as well as a second password which will serve as a backup in case you forget the first one. You can also choose to use Google's Authenticator App that works like the two-factor authentication system of online services like Gmail or Dropbox - using this type of app on your wallet would ensure that even if someone managed to get hold off your passwords they still cannot get into your account because what they need are specific time-sensitive codes which are sent straight to your mobile phone.
Store Your Coins In A Secure Location
Yes, even if cryptocurrency wallets are considered as a form of the digital currency itself but it still is made of data or code after all - it will not matter how secure your wallet is if the device on which it is stored gets lost or stolen because this would mean losing access to all of your mined coins. So make sure you store your wallet only in one place where others cannot easily find and steal (such as hiding it behind something else inside a drawer or cupboard). You can also transfer your mined coin currencies into cold storage for maximum security like storing them on an external USB drive that you can encrypt using software like TrueCrypt (source) and then store it in a safe place where no one can easily find and access them.
Follow Updates On Cryptocurrency Sites And Forums
Cryptocurrencies are continuously evolving and what is true today might not be true tomorrow or vice versa. This includes mining difficulty changes, new updates for wallets and mining programs, exchange site security improvements (or lack of), and many more things - therefore you should always be tuned in to any news or update on websites like BitcoinTalk or Reddit, among others. If possible join some cryptocurrency forums yourself to get regular updates from the community itself about the latest happenings in the industry since many people there would discuss what's currently going on every day (for example: check out these threads: 1 , 2, 3 ).
Back Up Your Wallet Regularly
Yes, it is very important to back up your wallet because this serves as a failsafe in case anything happened to the device on which your cryptocurrency wallet is stored. It doesn't matter how small or big the number of coins you have mined are, if they are gone without any record or trace then all your hard work would have been for nothing - just imagine losing all those Bitcoins that took you weeks to mine just because of forgetting where you placed your backup file! There are two types of backups that each wallet provides: full and incremental. A full backup will store all contents of your wallet including details about sent/received transactions, contacts, notes, etc while an incremental one will only store the new or changed data since your previous backup.
Keep Your Wallet Open Only For The Amount Of Time You Need To
Another important thing to keep in mind is when opening your wallet and letting it process transactions (i.e: note that some wallet requires manual refresh after a period of inactivity). If you are using a mining pool then make sure you only keep your wallet running for the amount of time required to send/receive transactions with it or else this could eat up all of your computer resources.
Always Check Your Transactions For Errors And Incorrect Input
Since cryptocurrency is all about getting your mined coins validated and transferred, the last thing you want is to lose those coins because someone incorrectly typed in an address or put in too low/high value for a transaction fee. Double-check everything before sending out any coins - such as making sure that the correct receiving address was told and inputted correctly, putting incorrect amounts for sent/received currencies, and checking if transaction fees were added properly (usually requires multiple confirmations before they can be considered valid).
Never Keep Your Wallet's Private Key Or Seed Phrase In A Plausible Location
What it means to keep your wallet's private key or seed phrase in a plausible location is keeping them written down on paper or stored anywhere online where others can get access to it. For example, you should never save the 12, 18, or 24-word combinations for your wallet words onto an email account you use regularly because if someone gains access to that then they can easily steal all of your coins - just imagine how much would have been stolen from you if that person was able to reset your Gmail password just by knowing one of your passwords! Therefore always store this information somewhere safe and preferably offline where only future buyers will be able to obtain it from you. This is one of the most important cryptocurrency security tips that anyone who wishes to start mining should know about - just ask those people whose wallets have been hacked into during the past few weeks how they feel about losing all their coins!
Use Different Passwords For Your Accounts And Services
This is a very crucial step towards protecting yourself because if your password for a certain service gets compromised and someone uses it on other web services you use then this could lead to big problems - such as having hackers gaining access to your email account or computer once they obtain information from another breached website. Cryptocurrencies can be stolen but so can regular money, therefore don't ever put yourself at risk by using the same password across multiple websites/services - it is recommended that you use a different password for each account, don't forget to include passwords with special characters and numbers in them as well.
Use A Dedicated Computer For Mining Only And Keep It Offline When Not In Use
This might seem a bit hard to do because not everyone would want to dedicate an entire computer just for mining but if you want your mining business to stay profitable then you need to keep in mind that people can get access to your wallet's private key if they gain physical access to the device you are using so, therefore, it is highly suggested not to let anyone else get their hands on your PC when someone is actively mining. Furthermore, computers used for extended periods tend to wear out so it is best to keep a separate computer just for the mining and powering on when you need to send out some coins.
Avoid Keeping Funds In Exchanges
Cryptocurrency exchanges have been one of the main targets over the years because lots of people use them as a wallet for their various digital currencies - such as Coinbase, Kraken, or Bitfinex just to name a few. The issue about these platforms is that if one of them gets hacked then it can lead to a loss of all your coins because they don't give users direct access to their private keys and therefore you must make sure not to keep any funds in exchanges unless you plan on trading them for other currencies (then don't forget to withdraw the coins you obtained through trading as soon as possible). Hackers can easily target exchanges and once they breach the security of someone's account then they will usually sell off everything just to get fast cash - therefore it is highly advised that if you're planning on storing your funds there then you should only keep small amounts that you won't mind losing.
Mining is always profitable if you know what you are doing but you also need to remember that mining can be very competitive depending on your location - however, if done right then this could earn you thousands of dollars every month. One of the most important steps towards protecting yourself when mining cryptocurrencies is to keep all your coins in a safe storage device and avoid keeping them online unless you plan on selling them soon - this will lower the chances of having your wallet hacked. You should also make sure to use a different password for each account and keep at least one offline computer just for mining purposes and powering on every time you need to sell coins or purchase something online with bitcoins/altcoins.