StoringBitcoin.info
This site will help you decide how to store your bitcoin.
Do you have bitcoin?
That is great! Welcome fellow bitcoiner!
How do you store your bitcoin now?
Ah, a precoiner! Before you buy any bitcoin, make sure you understand bitcoin.
Never buy for more money than you can lose.
How do you want to buy bitcoin?
Spot sites allow you to simply buy bitcoin. You say how many you want (or how much you want to spend).
After buying you need to put the bitcoin on a wallet
Exchanges are a great way to buy bitcoin. You can use market orders, or do more advanced orders there. After buying, your bitcoin remain on the exchange.
Exchanges can get hacked. Your account can get hacked. Exchanges can
go bankrupt and disappear.
Do you accept this risk?
You need to decide how to store your bitcoin
Is this a large amount? It's up to you to decide what a large amount is...
You will keep your bitcoin on an exchange
Accounts without 2FA are insecure. Enable proper 2FA using authentication apps, or email! SMS 2FA is not secure.
That's it! You will keep your bitcoin at a third party
Samples of funds are:
There are funds (ETNs) you can buy on regular exchanges, the same type of exchange you can but stocks. Click the i-icon above for more info.
If you use these products, you can never be technically sure the fund really holds your bitcoin.
How does that sound?
There are parties who help you set up a multisig solution. They are one of the parties in your multisig setup.
These companiers are often focused on cryptocurrencies. They can provide a good layer of security to your bitcoin storage, protecting you against hacking, seizure, in person attacks.
How does that sound?
Let's look at Software Wallets, which are wallets on your phone or computer.. They are often the easiest way to store (small amounts) of bitcoin. They allow you to spend quickly and on the road, which is cool. Most often 3rd parties are informed of balances belonging to your IP address.
Be aware software wallets can get hacked and your info is not always
private
Are you OK with the risk of losing the amount you have on this software wallet because of hacking, and your data not necessarily being private?
Via bitcoin-only.com, choose an On-chain and/or Lightning wallet for your platform (Desktop, Android or iOS). Install it on your phone/computer
Be aware that you will get a backup phrase. If your phone is
broken/stolen you cannot recover the coins without this backup phrase. So store it well, on paper (never
digitally), possibly in a safe?
That's it! You are ready for the future.
Hardware wallets are a great way to store secrets! Also there are a lot of choices to be made, and we will help you.
Some wallets require you to get transaction info from a 3rd party. Information will probably be right, but you need to trust them. Also they will get information about your funds. Do you accept this risk?
Below links to Node software. Before you buy a hardware wallet, make sure your wallet supports connecting to the software you have chosen. Bitcoin Core is the most widely used node software.
Having your own Bitcoin node will let you keep track of transactions yourself. No need to trust a 3rd party, yay!
Keep in mind you want the ability to connect your node when choosing a wallet, not all wallets support that.
Okay, let's look at hardware wallets. If you have a hardware wallet, you will hold your own bitcoin. That's very cool. Now something to consider...
There is a chance you get robbed (at home?) and are forced to give up
your bitcoin...
Do you want to keep this into account?
A robbery might happen but there are some tricks/solutions:
- You could buy a hardware wallet that gives you the option to set a timeout for unlocking. You then need to wait 1/2/4/8/24/... hours to be able to send.
- You can consider buying a (2nd) distraction-wallet.
- You can consider a wallet that allows for setting a 2nd (distraction) amount. This will be a lower amount that shows as "everything there is to steal"
If possible do not send your wallet to your home address. If your
wallet vendor's database gets hacked, the hackers know at what home addresses to look for bitcoin.
Some samples of well-trusted bitcoin wallets are listed below. It is up to you to find one which has the features you need.
All right! Time to buy a wallet.
Click the i-icon at the top of the page for some wallet suggestions
Did you buy a wallet?
You are taking the hard core route, that is cool. You will be your own bank!
Now is the time to link the wallet software to your own node
Congrats on your wallet. It's a great step towards security for your bitcoin.
Tip: Now you have received it, ask the store where you bought it to
delete your data. Non existing data cannot be stolen! At installation your wallet will give you seed
words. You most store these safely offline (this means to NEVER put this into a computer/phone/cloud!)
Do you want to protect these words (the seed) against fire?
There are some solutions to protect your seed against fire
- You can buy a steel plate and hammer the words in
- You can put the seed in a fireproof safe
Your bitcoin is now stored at one location (your home presumably). You might not want your house to be a single point of failure.
Also consider if you die, others might want access to your bitcoin!
Do you think others might need access to your bitcoin?
You will want to spread your backup over multiple locations
Do you have some people you 100% trust?
That's good, there are people you trust. You could put a copy of your seed at their houses.
Be aware! There are now multiple locations that enable stealing of
your whole bitcoin fortune.
Is that OK?
Okay, we will not put complete trust in others. That makes sense.
Are you OK with spending some extra money for security?
Security is worth money! We agree!
- You could go to a notary
- You could put your secrets (or a 2nd backup wallet) at a (bank) safe
- You could trust a custodial company specialized in storing bitcoin
How does that sound?
Technology can do interesting things!
Shamir's Secret Sharing is an algorithm that let's you cut your seed into
multiple parts in a safe way. You can cut it into a 3-of-5 for example. This means you cut it in 5 parts,
and 3 parts are needed to access your bitcoin. You can pick all the X-of-N numbers you want.
This solution is quite technical. Be sure you make good
documentation, so you will still know how to work with the parts in 10 years.
Like this?
Your seed is usually 24 words. You could cut these up into 2 parts of 12 words, or 3 parts of 8 words for example, and put these parts at different friends' locations
Hint: you can also cut the list into 3 partial lists, as described here. Splitting a 24 word seed into 3 partial lists, any two of which can be recombined is likely to be sufficiently secure for most people and eliminates complexity.
You need ALL the parts to get access to your bitcoin. Losing ANY of
these parts means you will forever lose access to your bitcoin!
Does that sound OK?
Third party could be a good solution. A notary or bank safe can act as your custodial, to store secrets. Or you can go to a party dedicated to buying/storing bitcoin.
- Secure: I will put a 2nd wallet (possibly part of a multisig) at a custodial
- I will put a copy of my seed at a custodial, and understand I must trust the 3rd party
- Tell me about parties providing multisig solutions.
- Tell me about (exchange traded) funds I can buy on regular exchanges.
- Maybe I do not like the idea of a custodial after all, what's the technical option?
A multisig consists of multiple (hardware) wallets and X-of-N transactions. You could have 5 wallets for example, and need 3 of them to sign your transaction (= send your bitcoin). You can pick any numbers you'd like. Higher numbers means more action is needed. Multisig is often considered the holy grail of self-custody security. It's also used within big custodial companies and exchanges to make sure not 1 single person can access the bitcoin, for example 3 wallets are needed (maybe the CEO, CFO and a dude named Ben always need to sign)
For all actions you do with your multisig-secured bitcoin you need
collaboration of multiple parties. This means more work is needed.
Does that sound good?
So you have your seed in multiple parts now, great! You can place these parts at your friends' houses, or put (some of) them at a trusted third party
Forgetting how to use the parts is one of bigger risks here. Make
sure you have instructions on how to access your coins (use the parts) 10 years from now. Also consider
scheduling a yearly verification, checking everyone still has your secrets.
You can have multiple hardware wallets using the same secrets. You are considering putting a backup wallet at a custodial
To do this, buy a second hardware wallet and initialize it using the same
seed words. Now both wallets can be used to access the same bitcoin
You can put your secrets at a custodial party. Depending on the choices you made, more or less trust is needed. For a multisig or Shamir's Secret Sharing-scheme, less trust is needed than putting a copy of your seed at a 3rd party
A copy of your seed will give full access to the 3rd party, make sure
you trust them
Multisigs are very cool
- Decide how many parties (people) you want to involve in total. This is your variable N
- Decide how many of these parties you want to have at minimum to sign transactions (send bitcoin) this is variable X
- Find a hardware wallet that supports multisig schemes, buy N of these wallets
- Set up your X-of-N multisig using the wallets
- Distribute the wallets over multiple parties
- Make sure you document the needed steps well, so in 10 years you still know how to use the multisig
Losing too many parts or forgetting how multisig works are the bigger risks. Make sure people understand what their part is/means. Document this well. Consider scheduling a yearly check to make sure everyone is still in possession of their wallets and understands.
Is that all good?
One of the last things you might want to consider is physical security. Think about a safe, weapons (if legal). This applies to all locations you (might have) put (parts of) your secrets.
That's it. Hope this website was useful to you. If it was, please share it.
You can always change your strategy later, if amounts or risks change!
Keep in mind that talking about how you did your own security, might
not be safe and might make you a target.
That's it! You are ready for the future.