With Bitcoin on the up, there has been a lot of buzz about safeguarding crypto.
Unfortunately, as the value of BTC rises, scams and hacking schemes also follow suit.
How many times have you heard within Reddit threads or other online forums about people losing their Bitcoin because they have forgotten their password or seed phrase?
Need we remind you that about 3 million BTC has been lost forever? It has not been touched in almost a decade and holds a current value of about $211,424,947,000.91, just from people who have lost their passwords, seed phrases or were keeping their private keys on hard drives that were later destroyed.
That’s exactly what happened to James Howells, a man who lost an estimated £165 million in cryptocurrencies that were mistakenly thrown into a landfill.
It is no laughing matter.
So, how do you make sure that your crypto is kept safe, no matter what? In this post, we will have a look at the many different aspects that you need to consider when buying Bitcoin and how to keep it safe.
We will look into wallets, seed phrases, and verification techniques and also look into what happens when you pass away. Yes, it is harsh to think about your death, but it’s an honest question to ask, who gets my Bitcoin after I die?
Let’s get into it. Here is your guide on how to keep your Bitcoin safe in 2024!
How Do I Store My Bitcoin to Keep It Safe?
Making sure that your Bitcoin is safe is like guarding a treasure chest. There are several ways to do it, different places to keep it and each has its positive aspects and challenges. Let’s explore the options:
1-Exchanges
✅ Pros: Exchanges are like the Wall Street stock exchange, a marketplace of the digital world. It gives you the quick ability to trade and access your funds and is the easiest way to buy, sell and trade Bitcoin and other cryptocurrencies. Some popular exchanges are Binance, Coinbase Exchange, ByBit and KuCoin, just to name a few.
❌ Cons: While it might seem safe, keeping your crypto in an exchange is like leaving the door to your safe wide open. You need to keep in mind that exchanges are big targets for hackers and scammers. If they get breached (which many of them have), all of your digital assets can be gone forever!
2- Software Wallets
✅ Pros: Software wallets, also known as hot wallets, do have the convenience of storing your Bitcoins on your phone through an app, or on your computer. They can always be with you and ready to use whenever you want. Well-known hot wallets are Trust Wallet, MetaMask and Exodus.
❌ Cons: The downside? They’re EXTREMELY vulnerable to malware and phishing scams. Having your digital assets easily accessible through an online connection means that an experienced hacker can get in and take it all.
3. Hardware Wallets
✅ Pros: Hardware wallets are the iron-clad safe of the digital age. Since your Bitcoin is stored offline, it is virtually unhackable. As you have full custody of the private keys and seed phrases to this wallet, no one other than you can have access to it. Some of the best hardware wallets on the market are Material Bitcoin, Ledger Nano X and Trezor.
❌ Cons: Sound too good to be true, well, there is a catch. Some can be damaged, and that means that you may lose your private keys or seed phrases. If that happens… then you are in big trouble because no one else can access your Bitcoin. Unless using a non-digital cold hardware wallet, like Material Bitcoin, that is waterproof, shock proof and fire resistant.
4- Self-created Wallets
I don’t think we can even put together a pros and cons list for this as it is so out of the average population’s league! Only meant for the super tech-savvy, there is the option of creating your own wallet. But, you’ll need a solid grasp of technology and coding – it’s not for everyone and if you make a mistake…you can kiss your crypto bye-bye.
So, which storage option is the safest?
In the end, which option is the safest? Well, here is why hardware wallets take the crown: With many options for keeping your BTC, hardware wallets are the #1 choice for security and safety because they maintain a balance between accessibility and protection.
You do not have to worry about hackers like you would on an exchange or software wallet, and especially if you are using a cold hardware wallet like that of Material Bitcoin, your biggest worry needs to be where you are going to keep the metal plaque. THAT’S IT.
Steps to Storing Cryptocurrency in Cold Storage
The specific steps to sending Bitcoin to your cold hardware wallet for long-term storage may vary depending on the wallet you have chosen and from which exchange you are sending it, but generally speaking, the steps are fairly similar and thankfully, easy! Here is what you need to do:
- After selecting your cold wallet of choice, you need to set it up. Using Material Bitcoin cold wallet as an example, the setup is quite simple. All you need to do is scan the QR code and follow the instructions! A bonus about Material Bitcoin cold hardware wallet is that, unlike other hardware wallets, it does not have any electronic components, therefore it is NEVER connected to a digital device!
- Log into your exchange, like Coinbase Exchange for example, and hit the send/receive button on the top right-hand corner. Using the Bitcoin Network, allocate the amount you want to send to the cold wallet’s address. Choose the Pay with Bitcoin option and hit continue.
- Scan your Material Bitcoin QR code and confirm that your crypto has been sent and received. DONE! Easy as 1-2-3.
- Check your bitcoin wallet balance here.
Extra Tips to Keep Your Bitcoins Safe
In case it hasn’t been made clear enough, here are some extra tips to help you keep your crypto secure and safe:
- Use a cold hardware wallet.
- Treat your private keys like a classified secret. Never share them!
- Use a strong and unique password. Try not to recycle passwords because once you’ve been hacked on one platform, it’s likely that you will get hacked everywhere.
- Use an offline hardware wallet. It guarantees that your Bitcoin is unhackable.
- Use two-factor authentication (2FA) if available.
- Use a secure internet connection when making transactions online.
How to Keep Your Bitcoin Wallet Safe
Congrats! You have chosen to store your Bitcoin on a cold hardware wallet. But, now you have to make sure that you keep your physical hardware wallet safe, which includes your private keys and seed phrases so that you can access your hardware wallet when needed and that it doesn’t fall into the hands of someone else if you don’t want it to.
Take the case of Stefan Thomas as a lesson to learn from. He only had 2 guesses left on his IronKey storage device to unlock his Bitcoin fortune worth $220 million! What happened? He did not have his private keys secure, nor did he back up his wallet with seed phrases. A bonus for keeping your wallet safe is using a seed phrase wallet.
Storing your hardware wallet in a secure spot is important. You want to guarantee that it is in an accessible place but that you keep it with your other valuables for safeguarding, such as a vault or safe in your home.
Finally, another thing to take into consideration, although not a pleasant thought, is what will happen to your Bitcoin once you pass away. If left in an exchange or a software wallet, you can run into many issues including government involvement in terms of inheritance rules and regulations, or a complete seizure and loss of your crypto altogether.
Keeping your Bitcoin on a cold hardware wallet has the extra benefit that if you wanted to leave your digital assets to someone, you could. All you have to do is provide that person with the information of where your hardware wallet is located. For example, if you keep your Material Bitcoin plaque in a safe in your home, just make sure that your loved one is aware of it and knows how to get into the safe if needed.
This way, your Bitcoin can be passed along from generation to generation.
There you have it. All of the tips and tools you need to keep your Bitcoin safe! In case you have some further doubts, check out the FAQ section below.
FAQ:
What’s the safest way to store your Bitcoin?
- Hardware wallets are your best option, always!
Are cryptocurrency exchanges safe?
- They’re not recommended for long-term storage as they can be easily hacked.
How much does it cost to store Bitcoin?
- Storing Bitcoin in a hardware wallet might cost you upfront (between $50 and $200), but consider the best investment you can make!
How long can I keep my Bitcoin in my wallet?
- As long as you wish! Bitcoin doesn’t spoil but ensures your wallet is secure.
What is the safest Bitcoin wallet?
- Material Bitcoin is one of the safest as it has non-electronic components and is never connected to the internet.
How do I make sure my wallet is safe?
- Regular checks, updates, and never sharing your private keys are the way to go.
0 Comments