Bitcoin is praised for giving its users full control over their funds, at the same time more control comes with more responsibility to keep those funds safe. There are many different ways to secure your Bitcoins each having its own pros and cons. This article will go over a few common and uncommon ways to store your Bitcoins, with a twist at the end.
12. Storing Bitcoins on an Exchange
The most common and easiest way to store your Bitcoins is on an exchange. There are many different exchanges available, check out our Bitcoin exchange comparison chart to see which one might be right for you. Remember though, that storing your Bitcoins on an exchange is not recommended for the simple fact that you do not have full control over your coins. Exchanges can get hacked or close your account down for one reason or another and you could potentially lose all your funds. Not to say that exchanges do not have a place in the ecosystem as they are great on-ramps for beginners to purchase Bitcoins and get familiar with the process of using them.
11. Storing Bitcoins on an Online Wallet
A better way to store your Bitcoins would be at an online wallet. Blockchain.info and GreenAddress are just some of the few options available for online wallets, to find out the right wallet for you check out our Bitcoin wallet comparison chart and reviews. The good news is that using services mentioned above, you do have full control over your coins as you are able to extract the private keys from the wallet’s. However, the downside is, that the private keys are also stored online which make them vulnerable to hacks and potential zero-day exploits. If you are looking for a convenient way to store your Bitcoins and are not too concerned about utmost security, you should give online wallets a chance.
10. Storing Bitcoins in a Desktop Wallet
A more secure yet still convenient option to store your Bitcoins is to use desktop wallets. The best part is that the private keys are only stored on your local machine, meaning that exposure of the key online is minimal. However, if your machine gets infected with a Bitcoin stealing malware, consider your coins gone. Furthermore, depending on what desktop wallet solution you choose, and how you set it up, you can transact Bitcoins more anonymously as your IP address and Email won’t be linked to the Bitcoin wallet unlike if you were to use an online solution.
9. Storing Bitcoins in a Mobile Wallet
Another pretty secure and anonymous way is to store your Bitcoins on a mobile wallet. Wallets such as Mycelium and Breadwallet are both great apps which you can download off of your phone’s app store. The wallets do not require any personal information so you can be confident your transactions are at least somewhat anonymous. Sure the app will link your phones ID or IMEI, but if the phone is a burner it is hard to link the wallet to a real identity. Furthermore, online wallets store the keys on your phone, and in the case that your phone is lost your can always use the provided backup seed to restore your coins.
8. Storing Bitcoins on a Hardware Wallet
One of the most secure ways to store your Bitcoins is on a hardware wallets. Solutions such as Trezor, KeepKey, and Ledger are all great options if you are looking to increase the security of your funds. Furthermore, these wallets provide a completely anonymous option to transact cryptocurrency. Since no personal information is linked to the device, there is no identifying data to leak. The reason these devices are so secure is because the keys are stored on a dedicated piece of hardware. Malware will have a very hard time – most likely impossible – to get past the wallet’s hardware security and steal your coins. Furthermore, just like any other wallets you can easily recover the funds with a seed phrase in case the device is lost or broken.
7. Storing Bitcoins on a Paper Wallet
Paper wallets aren’t as popular as some other solutions as they require more understanding of the protocol. You can generate a Bitcoin paper wallet at Bitcoinpaperwallet.com, which will guide you on how to properly generate it. Furthermore, you can generate it offline for upmost security by disconnecting your computer from the internet when creating it. Paper wallets can be stored anywhere and do not take much space. The benefit is that this is a 100% anonymous way of storing your coins as a paper wallet is simply a Bitcoin seed on a piece of paper. Furthermore, if the piece of paper is properly secured, there is no way for hackers to steal it as the wallet never touched the web in the first place.
6. Storing Bitcoins on a Multisignature Wallet
Another less common way to store your Bitcoins is on a Multisig wallet. A Multisignature wallet requires multiple people to approve a transaction before it can go through. This would be a great solution to store Bitcoins that belong to multiple people, like a company that has a Bitcoin fund. Lets say you do not want a single person to have control over your company’s funds, you could setup a signature wallet that would require multiple executives to sign off on a transaction before it can get approved.
5. Burying your Bitcoins
Now that we are done with the more obvious Bitcoin storage solutions let’s move on to the fun ones. If you are feeling extra paranoid of someone robbing your house or having access to your machine, you could print a paper wallet, or use a hardware wallet like Cryptosteel and bury your Bitcoins in your backyard or in the woods. For more security, you could also backup the buried wallet on a paper wallet in case you forget where you buried it.
4. Storing Bitcoins on your body
Another creative way to store your Bitcoins, is on your body. While it may sound weird at first, tattooing a 12 word seed, or atleast a phrase or sentence which would help you remember the seed could be an idea worth entertaining. Obviously if someone discovers the seed after seeing your tattoo it may render that seed useless. It would probably be best to create a sort of cypher that only you know. This way neither the tattooer nor any other person seeing the tattoo can break its encryption.
3. Storing Bitcoins in your Bank
While it may sound like the worst idea possible, storing Bitcoin in your bank may be more secure than you think. You could generate a paper wallet and place in in your safety deposit box. This way, your Bitcoins are both safe from robbery, or a house fire, but they are also stored anonymously without the bank knowing.
2. Storing Bitcoins on Physical Coins
There are a few services out there which allow you to buy physical Bitcoins. You purchase this physical coin which contains a tamper proof sticker under which is a predetermined amount of Bitcoins. Physical coins make a great collectors item and can be stored in the same way one would store jewelry or gold – either in a bank or in a safe. One issue with purchasing physical coins is how you will have to pay a premium on the Bitcoins, for example a coin loaded with $100 worth of Bitcoin may cost $150 or more. Moreover, you must trust the company issuing the coin to properly secure the private keys and not steal the bitcoins later on at a future date.
1. Storing Bitcoins in plain sight
One of the best ways to store Bitcoins is in plain sight. Steganography is the art of concealing messages or information within other nonsecret text or data. One could hide a Bitcoin private key inside an image and put it on their wall. If someone were to break into your house, stealing a boring painting would be the last thing on their mind. Furthermore, you could take it a step further by encrypting the data in the image with a passphrase, that way in case someone does figure out you are hiding Bitcoins in a image he would need the passphrase to access them.