Login
Password

Forgot your password?

How To Safely Store Your Bitcoins

By 1 2

There is a lot of options in the area of bitcoin security.

In this article I will tell you about two types I used with succes myself. These two options also happens to be the easiest ways to deal with bitcoin security for less technological savvy people.

Bitcoin storage

Paper Wallets

Paper wallets is one of the easiest and most simple ways to secure your bitcoins against hackers and other threats. What is it? It's very simply a bitcoin key pair (all you need to receive and spend bitcoins) printed on paper.

A paper wallet can be generated through a lot of different software and websites. The website I use is called "bitaddress". This site is "open source" and has enjoyed the scrutiny of a lot of bitcoin experts the last couple of years. After loading the site choose the "paper wallet" tab. Set up the different specifications you want, and hit the "Generate" button.

To make your paper wallet as safe and secure as possible, consider these points:

  • Make sure that you produce it on a computer NOT connected to the internet.
  • If you do not trust the computer, and suspect it to be infected with malware and other bad stuff, don't use it for this purpose (next point will eliminate this problem)
  • If possible, boot linux from a USB stick or a live cd. This will ensure that the operating system used is complete free of malware and other "spying" software (Instructions on how to make bootable USB stick, can be found at Ubuntu's website)
  • Store your paper wallet a safe place and cover up the "private key", as this is the key for using your coins (next point will eliminate this problem)
  • Encrypt it to keep it safe from physical theft and potential saved data on printer memory. To encrypt it, check the "BIP38 encrypt" check box, and choose a passphrase. Write the passphrase down on paper as your coins will be lost forever if you forget it.
  • Make multiple copies of your paper wallet and store it in different locations.

If you follow each or most of these points, you will now be ready to print a very secure paper wallet.

Insured Online Wallets

An online wallet is hosted by a 3rd party. You trust this 3rd party with your bitcoins, like you would trust a bank with your dollars. A lot of people lost big sums of money this way, one of the more famous examples being the case of the online exchange Mt. Gox.

Until recently, online wallets was a no go when seeking to store your bitcoins safely. However, different services now offers very secure online bitcoin storage, fully insured. You have 3 choices of online wallet services with insurance policies: Xapo, Coinbase and Circle. There is a catch however. If your coins are stolen because of your failure to keep your login safe, you falling victim to a fishing scam or people get access to your phone or computer, you are not covered by their insurance policies.

Here you go. These are two very secure ways to store your bitcoins. One for you who like to hold the private keys for your coins yourself - another for you who like the convenience of an insured online wallet.

Advertisement
Advertisement

Comments

Oct 10, 2014 8:13am
rwiman
Would be crazy if bitcoin were to become a physical currency. I know it's crypto and thats the whole idea, but still.

Very interesting article. I believe online security, integrity and smart payment methods has a huge future online. But also a VERY volatile one.
Oct 10, 2014 9:25am
n0rupp
Thank you!
Yes, bitcoin is SO interesting - it's so much more efficient than what we are used to. The volatility is a problem because merchants and other business people wont hold the currency - way to risky.
In the future the volatility will probably slow down as the market cap grows. Also solutions to lock the value of your coins to other currencies or baskets of currencies will help eliminate this problem.
I personally like the volatility for now - exiting stuff.
Add a new comment - No HTML
You must be logged in and verified to post a comment. Please log in or sign up to comment.

Explore InfoBarrel

Auto Business & Money Entertainment Environment Health History Home & Garden InfoBarrel University Lifestyle Sports Technology Travel & Places
© Copyright 2008 - 2016 by Hinzie Media Inc. Terms of Service Privacy Policy XML Sitemap

Follow IB Business & Money