Cryptocurrency allows any individual to “be their own bank”. With this great power, comes great responsibility, and fortunes can be lost by simply losing your crypto wallet.
When you create a cryptocurrency wallet, you generate a public/private key pair. The public key is your address and the private key is your password for unlocking your value on the network. The private key is your authentication on the network. Therefore, it’s vital to store your private key is a safe manner so you will always be able to access your beloved crypto.
To not end up like these people:
- Man Who Lost Bitcoin in Landfill Offers $72 Million To Dig it up
- Peter Schiff blames blockchain after losing access to Bitcoin wallet
- Bitcoin owner has only two guesses left to unlock $220m in cryptocurrency
Table of Contents
- Basic principles of secret storage.
You might have a private key, seed phrase, or password to unlock or restore your wallet, but let’s just call this your secret to make things simple.
Basic principles of secret storage.
Offline vs online.
Your secret can be stored online or offline.
- offline: not connected to internet
- online: connected to internet
Due to cyber security threats, offline storage is almost always more secure than online methods.
Have multiple plans.
If plan A fails, what’s your plan B? If both plan A and B fails, then what’s your plan C? If plan A, B, and C fail, then what’s plan D? Storing your secret in multiple different ways ensures you have more than one option to recover your secret. Of course, the limits are up to you.
Do what works for you.
It doesn’t have to be rocket science. At the end of the day, store your secret safely in a method that best fits your cirumstances.
Following the basic principles will be enough to store your wallet like a pro, but what’s the fun without some examples. You’re welcomed to use any of these examples, but remember - do what works for you.
Write your secret on a piece of paper and store it in a safe place. Lockboxes, vaults, lockable file cabinets, and gun safes are traditional methods you might be familiar with and maybe that’s your preference, but you might consider being more creative such as:
- inscribing the secret on a piece of art
- creating a fake product label with your secret on it
- writing your secret on a specific page in a book
- putting the paper wallet under a floor board
There are many hardware wallet products on the market that allow you to store your secret and sign transactions using the device. These devices usually sign transactions offline, but keep in mind you are trusting the hardware and software of these products. Here are some popular hardware wallets:
If you’re going to store your secret on a computer or external disk, then encryption is recommended incase your computer was hacked or someone else finds your storage device. There are many free utilities to encrypt/decrypt and password protect files:
A password manager that allows you to store your secret can be a convenient method. LastPass and Bitwarden are pretty good because the service provider store encrypted information that only you can unlock. Again, you’re trusting their service.
End-to-end Encrypted Cloud Storage
Do not use a cloud storage provider without encrypting any data before uploading or use a cloud storage service that provides end-to-end encryption by default.