Are you a bitcoin trader? You must be waiting for your turn to become a bitcoin millionaire. This is very much possible! You need to first store your bitcoins and wait for the right opportunity to encash them. Today, around 68.5 million cryptocurrency traders are available worldwide along with 100,000 bitcoin millionaires. In this post, I’ll guide you on how to store bitcoin in the safest way.
What is Cryptocurrency?
“Paper money is going away.”Elon Musk
A cryptocurrency is a digital asset that works as a medium of exchange. The individual coin ownership records are stored in a computerized database. It is paperless money opposite to the centralized banking authority system.
Bitcoin was the first decentralized cryptocurrency released in 2009. There are other cryptocurrencies such as Litecoin, Ethereum, Ripple, and Stellar.
Need for The Safest Way to Store Bitcoin
Bitcoin is a virtual currency or asset with no physical embodiment. It is a valuable tender that needs to be protected. Bitcoin exists in a native internet-based digital identity that attracts hackers.
New crypto traders always buy cryptocurrency from an exchange. The next to leave their holdings on exchange sites ‘custodial wallets’.
These websites are a crossroad of millions of crypto transactions daily. It makes them the most attractive target for hackers. There are a few infamous stories.
- Mt. Gox, which lost $750,000 of its customers’ bitcoins in 2014
- NiceCash robbery of $60 millions in 2017
- Binance setting $10 million for bounty hunters
All these incidents state that you need to learn how to store bitcoin in the safest way. To do that, you’d first need to know about the plethora of bitcoin wallet companies available in the market. Do check out our article that helps you choose the best bitcoin wallets.
Ways to Store Bitcoin?
“A fool and his money are soon parted.”Thomas Tusser
The best way to store bitcoin is a wallet. It is programmed to store bitcoins safely. If someone asks you “how to store bitcoin,’ tell them that it is a vague term because bitcoins can’t be stored anywhere.
The bitcoin wallet isn’t a physical item. It is a software program holding and trading bitcoin with a private security key. The key is the correspondent to the wallet’s address. Software wallets are the safest way to store bitcoin.
Cold storage is one of the best and safest options to store bitcoins. It deals with a very common digital wallet issue. What’ll you do when your private key is stolen or intercepted?
The wallet owner can’t regain access to coins without the private key, period. The cold storage for bitcoin is more secure than a traditional wallet. It means storing bitcoin offline without any internet access. The offline cold storage bitcoin wallet reduces the threat from hackers.
The cold storage for bitcoin is less convenient in taking a backup. It is harder to access coins offline. Many cold storage bitcoin wallet users keep tokens in the standard wallet for regular spending. This reduces the trouble of digging coins from cold storage wallets for everyday use.
Trezor bitcoin wallet is one of the best in the industry. It not only offers you a cold storage facility but also offers a desktop wallet to trade cryptocurrencies effectively. To excite you a bit more, we have exclusive trezor promo codes that offer a 15% discount if you take their product.
Bitcoin Physical Wallet
Physical Bitcoin is preloaded with a fixed BTC sum. It can’t be accessed without a private key. The first physical bitcoin wallet was Bitbill shaped like a credit card. Most alternatives were round-shaped like Casascius physical bitcoin.
The physical wallet bitcoin has a private key hidden beneath a peelable hologram. It is the most convenient way of storing bitcoin funds. Traders can easily access physical wallets. Storing bitcoin offline is problematic as they aren’t legal monetary tender in many countries.
The bitcoin digital wallet revolves around storing bitcoin online. You have to use an online bitcoin wallet provider to safely store your BTC. It is a software-based bitcoin wallet based on the internet. This method isn’t much safe as you have to rely upon a third-party service provider.
The companies such as Coinbase, Binance Chain, Paxful wallet and Nominex offer bitcoin wallets. You should pick the reputed digital wallet for better security.
Bitcoin Paper Wallet
The paper wallet is a document containing an address of the bitcoin recipient and a private key. It is the best example of storing bitcoin offline. Paper wallets are printed in the form of QR codes for easy scanning and transaction purposes.
The paper wallets provide protection against hackers, malware, and other cyberattacks. The precautions to generate paper wallets are:
- Create Wallet discretely
- Use a clean operating system
- Disconnect from the internet
- Use the offline printer to get a hardcopy
Do you know how to store bitcoin uniquely? The bitcoin hardware wallet stores users’ private keys in a secure hardware device. It is the best way to store bitcoin with ease.
The hardware wallets are safer. They are needed to be imported into the software at some point. They are immune to viruses. The funds can’t be transferred out of devices in plaintext.
Many hardware wallets have screens for security to verify and display important details. The users have to invest in the authentic hardware wallet for high-end security.
Desktop wallets are installed on your PC, storing the bitcoin private key on your hard drive. They are securer to store bitcoin online. They won’t rely upon third-party tools for their data storage. The hardware wallets are still connected to the internet.
For small traders, storing bitcoin on their desktop for easy transactions is a great idea. The desktop wallets can be categorized into different types based on security, anonymity, etc.
The multi-signature wallet or shared wallet is a wallet used by two or more users called co-payers. Based on the wallet kind, the number of signs required to initiate a transaction can vary.
A multi-signature wallet is the best way to store bitcoin for multi-partnered firms. The bitcoin transaction can’t be initiated without one or more co-payers signs. It has a unique recovery for each co-payers to easily recover private keys.
The time-locked bitcoin wallets are smart contract primitive wallets. It restricts the spending of bitcoins for a specified time or block height. This has been part of many bitcoin smart contracts such as payment channels and hashed time block contracts.
Time-locked wallets can be used for bitcoin investment for a period in anticipation of the future price hike. The time block wallets can be used to make fee snipping less profitable and trustless precomputed fee bumping.
The Best Bitcoin Wallets With Storage Facilities
|Name||Cold Storage||Physical Wallet||Digital Wallet||Paper Wallet||Hardware Wallet||Desktop Wallet||Time-locked Wallet||Multisignature Wallet|
The best and safest way to store bitcoin would be offline mode. It is best to select offline bitcoin wallets like hardware, paper, or physical. The advantage of storing bitcoin offline is you don’t have to rely upon third-party servers. Traders can easily access and use offline bitcoin wallets anytime.
The best way to store bitcoin is to use hardware, multi-signature, or cold storage bitcoin wallet. Your wallet can create a seed phrase, note it down or create a backup for secure access.
The process to store bitcoin on a hard drive is fairly simple:
1. Create a bootable USB flash drive with permanent encrypted storage.
2. Build your cold storage bitcoin wallet using Electrum.
3. Produce a ‘watch only’ wallet to safely store the private key on your desktop or mobile phone.
There are plenty of different ways to convert bitcoin into cash or a bank. The safest and quickest method is selling your bitcoin on a crypto exchange like Coinbase or Kraken. This way, your bitcoin will automatically appear on your bank, and you can easily withdraw money.
The question of how to store bitcoin always worries the traders. We hope that this guide has offered you the best and safest way to store bitcoin. You can read our other posts for more bitcoin storage-related information or can comment below.