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How to Secure Your Bitcoin

By Lane Wagner on Aug 30, 2019

If you’re new to Bitcoin and cryptocurrency, you may have heard the common phrase not your keys not your coins. While self-custody isn’t for everyone, its the only way to truly have exclusive control over your funds. If that’s what you’re into, read on.

Dangers of storing your own Bitcoin

In order to spend your Bitcoin, you need to have access to your wallet or to the seed phrase that was created alongside the wallet. Likewise, an attacker only needs access to one of those two things in order to steal all your coins.

A seed phrase is essentially the master key to a crypto wallet and usually comes in the form of 12 or 24 words. If you lose your wallet, for example maybe the phone your wallet was on becomes lost, then you can use the seed to regenerate every private key in the wallet and regain access to your Bitcoin.

Example of a BIP-39 seed phrase:

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Methods for securing your Bitcoin seed phrase

Like choosing a wallet, choosing a method to store your seed phrase depends slightly on your technical abilities and personal needs. Let’s go over some options and weigh the pros and cons.

Storing the seed phrase on paper

This is the simplest method, and for many people it’s a good start.

Storing the seed phrase on metal

Here you would etch the words into steel or store them using a product like CryptoSteel. This is a great option if you have a significant sum of money that you want to have custody over.

Storing the seed phrase in your brain

Simply remembering the phrase is referred to as a “brainwallet”. If the seed is not recorded anywhere, the Bitcoins practically exist only in your mind. The idea is to use memory techniques to allow the words to be memorized and recalled easily.

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Storing the seed phrase digitally online

This is almost certainly a bad idea. Only do this if you really know what you’re doing, or if you have so little money stored that you aren’t worried about losing it all.

Storing the seed phrase digitally offline

Storing the phrase digitally is usually a bad idea, but if you’re going to do it then at least doing it on a machine that doesn’t have internet access is preferable.

Every person and organization will have different preferences for how to store seed phrases. Factors that should influence this decision include the amount of crypto being stored, the technical abilities of the owners, and also tolerance for inconvenience.

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