Let’s face it, managing cryptocurrencies isn’t easy. Owning cryptocurrencies means being your own bank and taking complete responsibility for your funds.
Here, unlike in the fiat world, there is no bank manager or cashier to listen to your grievances or revert your transactions.
Whereas transactions in the crypto world, where we trade Bitcoins and other altcoins, are irreversible.
That is why one needs to be extra careful of their private keys to ensure their funds are secure.
To emphasize how important these keys are, let us just say:
“If you don’t own your private keys, you don’t own your bitcoins or other crypto-assets.”
You can also read my article on the basics of Bitcoin private keys.
But despite all these facts, many newbie investors deal with their private keys or seed keys in a very careless manner, jeopardizing the security of their funds.
Therefore I thought it was important to share ‘where you should store your private keys.
Where To Store Private Keys: Best Tips For Storing Your Private Keys
Note: Private keys are the alphanumeric string that looks something like this: 1EHNa6Q4Jz2uvNExL497mE43ikXhwF6kZm
Noting them down is not always convenient, and nowadays, most wallets offer seed words over private keys to let you note down the seed words. However, if you use a wallet that offers only private key (many of them do), here are the places where you can store private keys.
Use hardware wallets to keep your private keys safe. A hardware wallet is a flash drive-like device designed to store your cryptoassets. These are HD wallets that generate private and public keys via mnemonic phrases or seed words when initialized. Popular hardware devices that we use and trust are Ledger Nano X and Trezor Wallet.
If you own cryptos in small numbers, you might want to look at mobile wallets or desktop wallets like Mycelium or Electrum.
2. Never online
Never keep private keys online, in the mail, or the cloud because they are most susceptible to getting hacked there. Many users take screenshots of their private keys, and their photo album is usually synced online. This creates a security risk and is something you should never do. Instead, store them in various other cold storage as discussed in this article: What Is Cold Storage In Cryptocurrency?
You should instead write down your private key.
You can use a combination of Stonebook and Ghost pen to store your private keys on a piece of paper.
3. Offline Flash drive
If you don’t have a hardware wallet, you can temporarily keep your private keys or seed in an offline flash drive or HDD. But these options are only safe as long as they aren’t in the hands of an attacker. One can also use offline drives that encrypt the data stored on them. This way you can add one more security layer for accessing your coins.
Another effective way to store your private keys is to record them over a Cryptosteel. Cryptosteel is stainless steel tool that allows you to store up to 96 characters worth of confidential information. And in this case, this confidential information can also be your private key which is always less than 96 characters. This is a very secure way to handle your private keys because Cryptosteel is fire and waterproof. But this level of security doesn’t come free. Cryptosteel costs about $100.
5. Paper wallet
The other option is paper wallets for those who don’t want to spend money on securing their coins by getting a hardware wallet or Cryptosteel. A paper wallet is free and just a piece of paper that prints the pair of private and public keys. But to make it more secure, you need to laminate it and store it in a vault.
Setting up a Paper wallet is not very simple, and it is a practice that is being phased out due to new methods like hardware wallets. However, if you must, I have written a guide on how to set up a paper wallet here.
Another impressive way of storing your private keys is in an art piece. CryptoArt.com makes art masterpieces with QR code of Bitcoin public address on the front and private keys on the back under a secure sticker. See this video to understand more about it.
It is a form of cold storage that can disguise itself against attackers. One can also inherit cryptocurrencies in a royal way from their ancestors.
7. Write down your private key in your will
Lastly, put your Bitcoin recovery keys or private keys into your will, or tell your most-trusted family member how to find your key in case you are not around. I am saying this because there have been cases where a person passed away, leaving the inheritor with no idea how to unlock the Bitcoin funds. This is dangerous territory, however, because if you have a significant amount of holdings, some people (even some trusted family members) may want to harm you to get that money. See this post.
Having said that, I hope these insights will help you make the best decision for yourself and help you secure your cryptos for the future.
Your turn: What techniques or tools do you use to keep your cryptocurrencies safe? Where do you store your private keys? What other tips can you add to this list? Let me hear your thoughts in the comments below! Also, if you have a question regarding keeping your cryptocurrencies secure, feel free to ask.
And if you find this post helpful, share it with your friends on Facebook & Twitter!
Here are a few other hand-picked articles you should read next:
- Highlighting The Difference Between Sweeping & Importing Private Keys
- Airdrops In Cryptocurrencies: Everything A Beginner Needs To Know
- Decentralized Crypto Exchanges vs. Centralized Exchanges Like Binance, Bittrex
- 9 Interesting Bitcoin Facts Every Bitcoin Owner Should Know
- Security Risks of Mobile, Web & Desktop Bitcoin Wallets [Must Know]
About Harsh Agrawal :
An award-winning blogger with a track record of 14+ years. He has a background in both finance and technology and holds professional qualifications in Information technology.
An international speaker and author who believes in blockchain and the crypto world.
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Harsh has experience of 12+ years in Fintech and 7+ years in Blockchain and Bitcoin. He has also moderated the panel of Blockchain experts and attended international blockchain events like BTCMiami, and Token2049.