Crypto-Currency Storage

HAVE YOU CONSIDERED HOW YOU WOULD STORE YOUR CRYPTO-CURRENCY?

Over the years there has been a lot of discussion among owners and potential crypto-currency owners on the various ways to store and keep crypto-currencies safe. From cold storage to hot storage, one thing is certain we should give serious thought to protecting our investments.

If you are new to the Crypto-currency world, making the decision as to where to store your digital currency should precede your purchase. There are several choices that you may consider.

Some may prefer leaving their coins in the “exchange” where they are purchased. Choosing to trust a “third party” to have and hold their private keys FOR them as what is the generally the case with an exchanger. This is all well and good except it is suggested by such gurus as Andreas M Antonopoulos, Bitcoin Ben, and Bix Weir (to name a few) that in such cases where WE are not in control of our private keys we are not actually in charge of our funds. Very often even though you have purchased the crypto-currency, it is not even available to you for hours or days after the purchase.

  • Others prefer to download their wallet to their electronic device and use it there to be able to control their own private keys. This “SOFTWARE WALLET” requires that we be vigilant in protecting our password and private keys against would be hackers who, if successful in gaining access to our computer could manage to steal our Crypto-currency. Therefore storing this vital information offline and in more than one secure place is highly suggested.
  • ONLINE WALLETS” or “cloud wallets” offer the convenience of being able to access from any device and move your coins easily. Though you must keep your passwords secure and offline (suggested). These wallets are generally “free” as a mobile or desktop app, but here you are taking the risk that the host of the online wallet has proper security set up to protect your investments against hackers because your private keys are stored online as well and it is not unheard of that some of these “hosts” have shut down or simply disappear never to be heard of again and with YOUR Crypto-currency.
  • MOBILE WALLETS” make it easy to spend some of your Crypto-currency by use of a QR Code reader which allows you to send coins directly to another wallet for purchases. Though easy and convenient they are really not very practical for long term “HODL-ing” or saving of your Crypto-currency.
  • PAPER WALLETS” offer a bit of higher security since they are stored in a secure area offline. You create these and choose how much of your crypto-currency you wish to put on each Paper Wallet. It is wise to keep in mind that ink fades and paper could degenerate over time. Using proper printers and specialized paper along with storing the Paper Wallets in a dark place (light too can fade), could slow that process down. This may not be the best option for long term storage, but certainly convenient if you intend to use them as gifts.
  • Probably the BEST option for storing your Crypto-currency is a “HARDWARE WALLET” Some of the brands are Trezor, Nano, Keepkey, Case, and Ledger. These are generally very secure because they only occasionally connect to the internet to perform a transaction and are otherwise offline and mostly not hackable. Downside is someone could steal it or it could simply be lost along with your irretrievable Crypto-currency. It may be wise to keep your hardware wallet in a very secure place at a trusted lawyers, safe, or bank vault. And perhaps even a copy of the same in several places.

Depending on how you are going to avail of your Crypto-currency you may want to do what some others do and create a diverse method of saving and storing your coins. Mobile Wallets with small amounts added for quick spends, Online Wallets for use in trading to increase your holdings, and Hardware Wallets for long-term HODL-ing (saving) of your investments.

You will have to decide what is right for you in securing your Crypto-currencies but which ever you decide you must remember that the ultimate security depends on YOU.

Coindesk https://www.coindesk.com/learn/bitcoin-101/how-to-store-your-bitcoins

About the author

Gail holds one of the most challenging role in the Compumatrix Leadership: Membership. She ensures that that members and potential members enjoy the benefits of being part of the Compumatrix community.

Comments

  1. Thank you Gail for those 5 choices of storage for our crypto-currency. The first 4 seem to have some not great downsides. The fifth choice, a hard wallet sounds better but still lots of cautions when using. Personally, I purchased a Nano wallet, but have to confess that this wallet is totally, mostly incomprehensible for me. The controls to move screens don’t make sense to manage, everything is very tiny! I must look for a tutorial to get more confidence! For now it is in its safe place, but not inspiring me or giving me any confidence to use! For example, I printed out the instructions (certainly not up to Gail’s instruction standards) followed them, one section did not seem to work, carried on, then noticed later that even though the message came with an error, it now was miraculously fixed! Any recommendations for easier usage in regards to the other hard wallets mentioned?

    1. Janis I can’t offer any advice on how the various hardware devices work because I have not used the majority of them. I would do a youtube search and I would bet you can find just what you need on how to use other hard wallets.

    2. Yes a very good read regarding Bitcoin storage and security; I agree with Hard Wallets myself; I purchase a Trezor a few years back and love it myself! But I buy small amount of Bitcoin from an online exchanger for the forex market to do some trading!

  2. Vital to know how to protect crypt o-currency and by storage some to choose from this were
    you need to your self, how discipline you are with passwords and understanding the safety of
    each type of wallet and not let the third be in control. Believe it or not some of us need time to get use of controlling our on currency.

    1. Exactly Sylvester, taking it slow and learning is key to anything and this is no exception. And yes I do believe that some need the bit of extra time to research and learn just what options there are and how to achieve it. Good luck to you on your journey to find a safe storage decision that works for you!

  3. Excellent information that all those who have cryptocurrency will need to know when starting out. You have broken it down to simple facts. Personally I like a Hard Wallet since it gives me the control of the private key. The saying. “not your keys, not your coins” pretty much seals it for me. Spreading around cryptocurrency is a no brainer since we should never put all our “eggs” in one basket. As the world switches over to this way of moving currency more and more options will present itself. Keeping up with the latest devices to safeguard assets is imperative to keeping cryptocurrency safe.

    1. The most important thing to keep in mind for all of us is that ultimately WE are responsible for the security of our coins. As Erline pointed out keeping all of your coins in one place to me is not a good idea either because if you lose your private keys or password to the one place you have them stored then sadly you lose them all.

  4. Very informative in different ways to store your bitcoins and other cryptocurrencies. It is true that if you do not hold your keys, someone else has them,
    Now the cryptos are not actually stored in your wallet, but on the blockchain. The wallets holds the key private and public which leads to the access to the blockchain where your cryptos have been noted

  5. Gail, we have been mulling over the variety of storage methods for some time. Since every method has some level of downfall, we have decided to spread the risks among many options. The mobile wallet would hold the least amount and this would be like a checking account that you use a certain amount for the month. Paper Wallets are great to be totally offline but caution has to be exercised so your Crypto doesn’t, as the phrase go: “Go up in flames”. The hardware wallets although seemingly to be the most secure are concerning as they have to work thru another website. As I said, variety to spread out the risks.

    1. Stephen, to my way of thinking diversifying and making use of several wallet options is the best way to go. This ensures that not all of your coins are in one place so that your risk of losing ALL of them drops considerably. Caution is always the word of the day when handling Crypto-currency to minimize or completely take away the risk of losing them.

  6. Thank you, Gail for informing us of the different ways to store cryptocurrency, and for reminding the reader to prepare a storage prior to purchasing the asset. It can be tempting though for one to choose convenience over long-term security. Surely, I will be reviewing this information and, adding to that, consider the comment of Stephen. I believe many more ways will be offered in the future by emerging companies when cryptocurrency becomes the new normal in the financial world.

  7. Thanks, Gail, for providing this useful information. It’s important that we all review this once again so that we can properly prepare for storing and securing our cryptocurrency. I too agree that we should diversify and use several storage methods.

  8. Thank you, Gail, for providing, and reminding us all, about the importance of holding many different wallets to keep our coins safe, and for using them. I also have hard wallets and kind of ‘afraid’ to use them… won’t I forget where I have saved the passwords and key codes?! 🙂 Well, as many of us I also have and like the mobile wallets… they’re easy, so easy to use AND to hold my crypto… The keys are saved with us, are they not? As to paper wallets… Never had one, but once thought they’d be safe, but now… hmmm… I guess there are better places to keep my coins. Though the idea to use them to gift someone never crossed my mind before, maybe it is a good use for them.

  9. The information in this post is an excellent refresher for those who got wallets years ago. It is also a timely reminder to those who have not already taken action in the past. Storing our cryptocurrency safely is so important, since we have 100% responsibility for our own. That is different from what we are all used to.

    Now is a good time for Compumatrix members to get up to speed on these storage methods, for what should be an obvious reason. The importance of spreading around Bitcoin into multiple wallets cannot be over stated, because deep down most already know it is not a good idea “to keep all of your eggs in one basket.”

  10. Thanks for the refresher course on storing of cryptocurrencies Gail. There seem to be more options than I remember when I was researching a few years ago. I still prefer the Paper Wallet though. I would not actually print them out, but I copy and paste the keys with a screenshot of the actual paper wallet once I have created it, into a Word document and encrypt it. I then save the paper wallet/s on an encrypted flash drive and make two backups which I store in different places. That way I can be sure if I lose one or one gets stolen, nobody will be able to access what I have on the drive and I will have two more that I can access if that one never gets found.

  11. Thanks for posting Gail.
    In Brazil, when we withdraw money from the electronic terminal, we are instructed to act with the greatest care.

    We have to insert the card into the machine and if we notice something different on the device it is advisable to give up the operation and notify the bank.
    If everything is normal we need to protect the keyboard with our hands to enter our password.

    Furthermore, it is recommended not to accept help from strangers and to act with discretion in relation to money.

    For reflection, if in a theoretically controlled environment we are indoctrinated to follow security guidelines and we follow it, because it would be different in the digital environment.

    My computer is like my bank ATM.

    Even so, with all the security requirements that I try to maintain in it, the vulnerability is very great.
    And so, resorting to more protection alternatives, even if external, is not an option, but a necessity.

  12. Nice blog Gail with very useful information. With so many cryptocurrency storage options available, the question is what is the best question. Well, each option is having it’s advantages and disadvantages. Each one has to examine these advantages and disadvantages and decide themselves on how to store their hard earned cryptocurrency.

    If you want to use a Software Wallet, you should take care of security of your private keys and take all precautions to keep it to yourself. You should also take ample care that your system where you have your Software Wallet, is out of reach of hackers.

    A paper wallet is simply a paper with your private key written on it. If you want to use a Paper Wallet, you must take precautions that the paper on which you have your private key written is not lost, not destroyed, not stolen. If any of these things happen, you will permanently lose your Bitcoins.

    Mobile wallets are very similar way to software wallets, but you can access then when you are on the move. All precautions suggested above for software wallets needs to be taken for mobile wallets as well. Here another biggest risk is losing of mobile phone.

    Hardware wallets are usually used to store large amounts of cryptocurrencies, specially Bitcoin. Most is use hardware wallets are Trezor or Ledger. A hardware wallet can be mistaken as a USB pen. These are easy to backup and very secure. In case it is stolen also, the thief will not be able to access your private keys and you stand a chance to recover your cryptocurrency.

    Don’t ask which is best. It should be decided by you alone, as you store your money there.

  13. Very informative post, Gail! Every storage method seems to have their pros and cons. I tend to believe that a combination of storage methods is the most sensible way to go. Particularly, a mix of paper wallet, hardware wallet and online wallet would fit my needs perfectly. Online wallet for immediate needs, hardware wallet for middle term needs and paper wallet for long term. Paper wallets can be problematic over time due to paper fragility, but you still can improve security by plasticizing the paper wallet and keep it stored in a fireproof place.

  14. Thank you for the storage information Gail. I have been going back and forth on which storage solution would be the best fit for me. The Paper Wallets always concerned me, but doing as Vee Dell mentioned; taking a screen shot, save in another file, and the paper wallet itself on a flash drive makes sense, plus having the online account and the hard wallet gives myself three avenues of safety and access.

  15. I have seen that hardware wallets seem to work the best for me and are the most convenient. Many of them operate with a very limited and quick presence online, and therefore are more secure. I love the liquidity that a hardware wallet gives in being able to receive and send cryptos are any time. It makes total sense that a paper wallet is the most secure (as long as you don’t lose the paper, LOL) but paper wallets are very difficult to send money from. They offer very little in terms of move-ability of your coins.

  16. Great article, with clear delineation of the choices out there for storage! Sometimes, we are just passing our cryptocurrency through, in order to get it into an ecosystem, or back out, to our banks. Then simply using the exchange wallet can make sense.

    That is what I have used most lately, with a different ecosystem that just needs and in and an out. But I also have a mobile device wallet that I was, at one time, keeping some in. That was handy because it allowed me to access it easily.

    And I have the Keepkey for when I have enough to begin to HODL. I have to admit, it makes me nervous, because although I think I understand how to get it all in, I’m not sure how to get it back out again. That will just take practice!

    I think with a lot of these things, people can be nervous or downright scared to do what they will eventually be able to do easily. It is a new industry, a new way of working with money. Giving ourselves plenty of practice to get used to the way one works with this new currency, until it no longer feels so scary is essential–preferably before one begins to work with the higher amounts!

  17. Like others I too prefer to make avail use of most if not All crypto currency storage options.
    Simply for safety reasons, “There is safety in numbers” applies here to me. All Business owners have more than one Bank account,like Business,Personal and Saving. So why not have multiple currency wallets/storage?
    Risk is always there as with Banking, however minimizing potential risk make for “Good Business”.

    1. I couldn’t agree more Andrea. Spread it out to various areas so that all “eggs” are not in one basket. I like scrambled eggs but not scrambled funds..lol Diversify and protect!!

  18. Thank you for the info Gail and after reading all the posts — it sure will help out those of us who are in need of learning what and where and why to do this or that — or if we should be in hard wallet or mobile wallet or have use of every different kind — but the most important part for now is to have access to whatever we have now–

  19. Thanks Gail for spelling all the options out again. I know it will come down to the individual user as to what seems to be the safest for them. I myself like the Trezor option and have used mine to some extent and seems to be really user friendly.I have also set up Paper Wallets but if I venture that way would need to get the proper printer for this use.

  20. Gail, So glad you have put all these ways here for storage of BTC. It is a great refresher for everyone about how to store and the safe practices one must use to safely store BTC. Very useful Blog not just for now but also for the future to be able to point others in this direction to at least get them started in the right direction. Very Informative.

  21. This issue of security is probably the number one concern for many that are considering dumping fiat. A day does not seem to go by without a news story on crypto thief. With that said, I agree with the article – that Hardware wallets are probably “the best option” for storing crypto. I am spreading my crypto between different hardware wallets, some paper wallets, etc. In my opinion, this spreads the risk as a hack in one will not affect all of assets and each wallet type has advantages.

    1. Great info Jeff — I agree with what you are sharing as I said in my post yesterday this is good stuff or information — I do need to research more detailed information on which way to keep my earnings safe and protected and also simple to access when needed — i will follow your lead my friend — thank you Jeff rjh

  22. I agree with you 100% Jeff. I’m pleased to see your evolved opinions on “security” and that they specifically include what I like to call “physical diversification”. That of course is a fancy term for “not keeping all your eggs in one basket”. That idea is still true on the farm and it is just as true with cryptocurrency.

    That is why it also makes sense to have multiple Bitshares DEX accounts, since there are no “hard wallets” to hold our valuable Compumatrix assets. There are however, Thumb drives that can be used almost as effectively as hard wallets, by keeping multiple DEX account passwords ONLY on those multiple Thumb drives and physically storing them 100% OFFLINE.

  23. Kevin said something I forgot to mention. With our Compumatrix assets I think that the DEX is, as Henry once said, one of if not the safest place to keep them really safe. And, of course, this includes mostly (to most members this is the one that matters) our CBTC. Our DEX is a Web wallet! So do as Kevin said, just keep our passwords safe and we’ll be the owners of our coins with no fear to losing them.

  24. A very good blog done by you , Gail and very good comments, as well.
    I coincide with the opinion of “spreading the risk” and keeping our cryptocurrency in several places.
    So that our “eggs” are safely placed in different baskets and we could get to these “eggs” whenever we are hungry!
    CYBER CRIME is on the rise. Hence, safety must be intensified. We expect to earn well in future and we would need to safeguard our earnings.
    Dora, you mentioned something very important regarding the DEX, for safeguarding our assets..Thank you!

  25. Backups, backups, backups! That’s your primary advice, and something I totally agree with! I know that personally I go through different moods according to a variety of factors, and I’d love to know I’ve prepared a backup that leads to the other storage methods in a very cognizant way! Leaving breadcrumbs for myself, so to speak… and of course they make sense only to my own self!

  26. I am learning as i research thru the many different and even difficult parts of the crypto world that there is so much to learn and then make sure you have the actual correct info and not just some persons’ opinions — it is not an easy or simple measure to literally find correct and truthful but I am getting there —

  27. Another great article, Gail. I still struggle to understand all the different options regarding Wallets, it’s all a new language and something new to learn and so much to keep up with. I recently starting using Exodus and I don’t know if this is consider a wallet, but it’s one of the best programs to keep your crypto currency, even for a short period. I eventually will buy Trezor which I heard is one if not the safest hard wallet to protect your crypto currency once we start receiving our Compumatrix assets.

  28. Thanks for all the information on various types of wallets. I must go read up on all the different types to determine which is best to work the best for myself. Thanks again for the info

  29. Great Article Gail. Amazing how many people don’t understand about the central and decentralized differences. And how many people trust wallets like coinbase. Perhaps convenient for buying and selling, but not somewhere I would consider storing them. My choice is indeed a paper wallet. Print it out and laminate it for long term storage. Keep in a dark cool place.. Underground is a good example – with GPS co-ordinates as to where it is. LOL.

    I prefer paper over electronic because it is impervious to electronic meltdown. I have yet to have any USB drive last more than a couple of years on the boat and Paper, laminated and stored properly will last forever. I print them out, then spray with clear laquer, or UV varnish. Locks the ink in place, then I either use a hot laminating device or good old clear packing tape. A couple of layers, both sides overlapping.

    No salt water damage and still intact after a lighting strike.

    Great advice and DO be diligent about where and how YOU store yours.

  30. I was thinking about the simple yet very powerful phrase coined by Andreas Antonopoulos, “Not your keys, NOT your coins”, from this 3 year old 10 minute video: https://www.youtube.com/watch?v=vt-zXEsJ61U

    This means that any Bitcoin that is kept on exchanges is at risk for being lost because they hold the keys, not you. To name just a few, these include Coinbase, Gemini, Binance, Poloniex, Kraken, and even the Cash app (which allows trading and Bitcoin storage).

    Awhile ago I learned, from another YouTube video by Andreas Antonopoulos, he typically stores less than $150.00 USD worth of BTC on any exchange or hotwallet. Any more than that amount he keeps on a hard wallet such as a Trezor, KeepKey, or a Ledger Nano. because he has the keys to those. That makes perfect sense to me.

  31. Very useful and informative post Gail about storing and keeping our crypto currencies safe.This will surely help a lot pf people who are unaware of safety of the cyptos.

  32. After a lot of research on my own, I came out of it all with a good bit of confusion. This blog really simplifies the best ways to keep your cryptocurrency safe and I wish it had been written before I did all of my research. It would have saved me a lot of time. I think the key information here is to not put all of your eggs in one basket. We should all have a Hardware Wallet for the bulk of our holdings. After that, the other places to store crypto usually in smaller amounts are simply a matter of preference depending on your lifestyle needs. Some people want it quick and easy, which can be riskier, but as long as you have most of your holdings in your Hardware Wallet, you will be ok.

  33. Very informative article Gail. Thank you for that. At the moment I use a hardware wallet for storage but I intend to to start using paperwallets once the amount of bitcoins I own grows. I never leave bitcoins on an exchanger. There are enough examples that shows that storage on an exchanger is a good idea.

  34. Thank you for this information Gail. It is very useful. Storage is an important issue in the cryptoworld but it is also vulnerable. The information you provide with this blog should be read and used by everybody so people can make the right choices to protect their assets.

  35. In my opinion many of us could use a class in how to store your coins on a hard wallet or other device along with your keys. I always look to Kevin to transact moves in the Dex and cash out procedures and on Youtube. Will have to work on that one when I can.

    I certainly agree that “keeping all of my coins” in one place is not a good solution. Security is number one in this business. A primary reason for keeping a more secure system is the fact that everyone seems to think it is okay for a third party to be advertising on a site where I have to type in a password to open one of our programs, like the CDAP or this site to cross over to another section like Forum or the DEX. Open one of those ads with the source tab and look at all the re-directs and code for a simple ad. Scary is the only way to describe what you will see.

    It’s too easy for a hacker to embed code, cookies or redirects. Using Google or Window for all of our info is a risk.

  36. I agree totally with you joe — there is a ton of information reading thru the blogs and posts but think i am going to look around and see what is available out and around the internet and see if there is anything available that can be used to further the knowledge and in all thoughts simplify the Business —

  37. This is very useful information considering that some people’s jobs are to try and hack people’s investment accounts. I completely agree with Erline – people should diversify their crypto-currency into different holding wallets in case one wallet somehow gets hacked. For example, this analogy makes sense to me; multiple holding wallets for investment security to multiple stock ownerships in an investment portfolio for investment security. Though, with advances in technology, I hope for even better security and even safer places to store hard earned investments in the near future.

  38. also agree with diversifying any and all your investments — i have been looking around and reading and listening outside here and the blogs being posted here are tremendous help in gathering a legitimate plan to be wise and protective of our work here and if you other outsides then you can put together quite a portfolio and keep it protected and safe but also accessible — great stuff really — rj

  39. This is my first comment on Compumatrix and I am so glad that I started out reading such an informative blog post! Thank you for this information on where to keep my money secure! Currently, I have my money with someone who I can trust and who knows how to keep my money safe. Once I start cashing out, I will have to use one of these wallet recommendations so that I can keep my money safe and be able to spend it.

  40. this will always be a great spot to gain very necessary information on how to keep our business secure and safe from the downside of the internet — there is much to discover when you go seeking information and still I lean much more to as small a footprint that you can make with your financials of your business and diversity of where you store I truly think is the best policy — but as we read more and more of the blogs here combine the info and make a wise plan —

  41. Yes, Gail, I have considered and considered, again, and again. By the time I chose the best one, a better method would come along. LOL LOL. There is a serious need to keep our currency safe and out of the hacker’s hands and out of greedy hands. Your post has excellent and vital info, Gail. My purpose in the laugh out loud, lol, is because of the thrill of knowing we are in need of these safety measures.

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