Safely Storing Bitcoin

Bitcoin is the world's most popular and valuable cryptocurrency, but it also comes with some risks. If you own or plan to buy some bitcoin, you need to know how to store it securely and prevent hackers, thieves, or accidents from wiping out your investment.

There are many ways to store bitcoin, but not all of them are equally safe. In this article, we will explain the main types of bitcoin storage and their pros and cons, as well as some tips and best practices for keeping your bitcoin safe in 2023.

What is a Bitcoin Wallet? A bitcoin wallet is a software or hardware device that allows you to send, receive, and store bitcoin. It does not contain the actual coins, but rather the private keys that prove your ownership of them. The private keys are like passwords that allow you to access your bitcoin on the blockchain, the distributed ledger that records all transactions.

A bitcoin wallet can be either custodial or non-custodial. A custodial wallet is managed by a third party, such as an exchange or a service provider, that stores your private keys for you and guarantees their safety. A non-custodial wallet is one that you control yourself, meaning that you are responsible for keeping your private keys secure and backing them up.

A bitcoin wallet can also be either hot or cold. A hot wallet is one that is connected to the internet and allows you to easily access your bitcoin for transactions. A cold wallet is one that is offline and isolated from potential hackers or malware. A cold wallet is more secure than a hot wallet, but less convenient.

Types of Bitcoin Wallets
There are four main types of bitcoin wallets: mobile wallets, desktop wallets, web wallets, and hardware wallets.

Mobile Wallets
A mobile wallet is a smartphone app that allows you to store and use your bitcoin on the go. It is a hot wallet that is usually custodial, meaning that you rely on the app provider to safeguard your private keys. Some examples of mobile wallets are Exodus crypto wallet, Electrum and BRD Wallet.
Mobile wallets are convenient and user-friendly, but they are also vulnerable to hacking, phishing, or device theft or loss. If you use a mobile wallet, you should enable security features such as PIN code, biometric authentication, or multi-factor verification. You should also backup your recovery phrase or seed phrase, which is a set of words that can restore your wallet if you lose access to your device or app.

Desktop Wallets
A desktop wallet is a software program that you install on your computer and allows you to store and manage your bitcoin. It is a hot wallet that is usually non-custodial, meaning that you have full control over your private keys. Some examples of desktop wallets are Exodus, Electrum, and Bitcoin Core.

Desktop wallets are more secure than mobile wallets, but they still require internet connection and can be exposed to hacking, malware, or hardware failure. If you use a desktop wallet, you should encrypt your wallet file with a strong password and backup your recovery phrase or seed phrase on a separate device or medium.

Hardware Wallets
A hardware wallet is a physical device that stores your private keys offline and allows you to sign transactions without exposing them to the internet. It is a cold wallet that is always non-custodial, meaning that you have full control over your private keys. Some examples of hardware wallets are Ledger Nano X, Trezor Model T, and KeepKey. You shoudl still store your 12/24 words safely and offline - anyone with access to those can steal all of your Bitcoin.

Hardware wallets are the most secure type of wallet, but they are also the most expensive and less convenient. They require a separate device and a compatible software to use your bitcoin. If you use a hardware wallet

Web Wallets
We do not recommend using a web wallet - when you use a web wallet, you do not have control over your bitcoin. You are relying on them to store your Bitcoin and you have no guarantee that they have them or will give them to you when you want them.