One of the best parts of crypto is being able to store money with just a private key or seed key – like a 12 word passphrase. One of the worst parts of crypto, however, is that storage and security of your passphrase is entirely in your hands.
If you lose your private key or seed key, then there’s no bitcoin customer service hotline you can call to recover your funds. People can lose – and have lost – millions of dollars of bitcoin because they’ve lost their private keys. In fact, it’s estimated that 4 million bitcoins (out of the 21 million total supply) are unrecoverable because the private keys are missing.
Fortunately, we’re here to help. We want to highlight some of the best ways to store your private keys or seed key.
How important are private keys? Remember this tried and true lesson about crypto:
If you don’t own your private keys, you don’t own your bitcoins or any other altcoin.
Some people store their private keys in their head. They memorize a passphrase. This is called a “brain wallet”. Other people use hardware wallets like the Ledger Nano S, and some people just write down their seed key on a piece of paper – a paper wallet. Today, we’re explaining the best ways to store your private keys or seed key.
Private key storage boils down to one simple principle: how you can securely store a string of numbers and letters. Your private key looks like this: 1CHNa6N4Jz3uvNExL497mE72ikXhwF6kZy. You can store that private key as is, or you can protect it with a passphrase – like a series of 12 or 24 words through BIP32 encryption.
Top 9 Tips For Storing Your Private Keys
Use A Hardware Wallet
Hardware wallets are popular crypto storage devices for a reason. Hardware wallets typically look like USB drives. Unlike a USB drive, however, a hardware wallet is designed specifically to store bitcoins. These devices are HD wallets that generate private and public keys using mnemonic phrase or seed words when launched. The Ledger Nano S and Trezor are the two most popular hardware wallets available today, although new competitors are springing up regularly.
Keep A Mobile Wallet Or Desktop Wallet For Small Fund Storage And Daily Use
If you find yourself using crypto regularly, then a hardware wallet can be inconvenient. Yes, hardware wallets keep your money safe, but they don’t make it overly accessible. To solve this problem, consider using a mobile wallet or desktop wallet. Mycelium and Electrum are two popular options. Many regular crypto users will treat their hardware wallet like their bank account and treat their mobile wallet like the cash in their wallet. One is for daily spending, and the other is for safe long-term storage.
Avoid Keeping Private Keys Online
Private keys should not be stored online. Anything online can be hacked – whether it’s your Gmail account, your OneDrive, or anything else. By keeping your private keys online, you’re opening yourself to new hacking methods.
Store Private Keys In An Encrypted Storage Device
If you don’t have a hardware wallet and don’t feel like investing $100 in a hardware wallet, then there’s another solution: use an encrypted storage device, like an offline flash drive or HDD. Even if stolen, a hacker would need to break the encryption. It’s not a perfect solution, but it’s better than leaving private keys online or in an unencrypted storage device. It’s a good temporary measure while you wait for your hardware wallet to arrive in the mail.
Engrave Seed Phrases On Stainless Steel
Some people write their private keys or seeds on a piece of paper, then store that piece of paper in a secure place – like a safe or locked drawer. However, these solutions aren’t perfect. In the event of a flood or a house fire, your paper wallet could be destroyed. That’s why some crypto experts recommend using stainless steel.
You engrave your private key or seed phrase on stainless steel, then you don’t have to worry about it being destroyed. You don’t have to buy a piece of stainless steel yourself. You can find products available online – like Cryptosteel – that allow you to engrave your private key in a quick and easy way.
Use A Paper Wallet
Paper is relatively destructible, but it’s still a secure way to store your private key – assuming the paper is kept in a safe and secure location. A paper wallet is free. A paper wallet can be as simple as scribbling your seed phrase onto a piece of loose-leaf. You can also get paper wallet software that prints your private key. You store that piece of paper in a secure place, then access your funds whenever they’re needed.
Never Take A Screenshot Or Picture
You might be tempted to take a picture of your private key – like a picture of your paper wallet – to make a backup copy. This generally is a bad idea, as it introduces another avenue of attack for hackers. A screenshot ends up on your mobile device, and the photo may be automatically uploaded to your cloud storage. Avoid taking unnecessary photos of your private key or seed.
Put Recovery Keys Or Private Keys In Your Will
You never know where life will take you. After death, most people want to pass on their funds to loved ones. There are straightforward, well-established ways to do this with bank accounts and properties: talk to a lawyer and add it to your will. You can take a similar approach with your crypto fortune. Add a recovery key or private key to your will. Or, leave instructions in your will explaining how to find your private key.
One of the most badass ways to store your private key is to simply memorize it. Typically, you wouldn’t want to memorize your private key itself. Instead, you’ll want to memorize your recovery phrase. If you can memorize 12 or 24 words, then you can recover your funds at any time. You can cross borders with nothing in your possession – but $10 million of bitcoin stored in your head.
Top 9 Tips For Storing Your Private Keys Conclusion
There’s no perfect way to store your crypto fortune. Every method is susceptible to at least one attack method. Even a brain wallet, for example, isn’t secure if you’re being tortured or threatened. You can never make your crypto fortune 100% secure but you can take steps to make it more secure. By following the tips above, you can ensure maximum security over your crypto fortune.