Where is the best place to store Bitcoins after buying them for the long term? All safe ways

Studying how to properly protect your digital coins is a vital step on the path to owning cryptocurrency. In this guide, we'll discuss best practices for storing bitcoins safely.

Some theory: how to store bitcoins

Unlike standard electronic payment systems like AdvCash, YandexMoney, Webmoney or Qiwi, a bitcoin wallet has no real physical embodiment.

The entire VTS blockchain system exists electronically, and the cryptocurrency wallet itself is a set consisting of two keys:

• public key, which serves as the identifier or address of the repository;
• private key - only needed to sign transactions.

The record that VTCs belong to one cryptocurrency wallet is in all other vaults at the same time. To be more precise: the bitcoins themselves are in the network, but their blocks can belong to different users. Whereas in a regular EFT the money is sort of lying inside of it, in the case of bitcoin, the wallet keeps a record of how many coins and who owns them.

It's hard to find out exactly who a particular VTC is registered to. All wallets are anonymous. When a person creates his own cryptocurrency wallet, he doesn't provide any data about himself, as it happens in traditional payment systems. However, it is possible to analyze transactions. This will allow to associate funds transfers with a specific cryptocurrency. If the owner did not observe the basic rules of anonymity when working with bitcoin, there is a chance to calculate it. U.S. intelligence agencies have done this more than once. In terms of safety and security of your funds.

In terms of security of your funds, cryptocurrencies are superior to traditional EFTs. The main thing is to remember (write down) your private key. Without it, it's simply impossible to hack into the vault. But do not forget about the classic fraud schemes (phishing, hacking PC where the key is stored, etc.), through which attackers get other people's coins. In 99% of cases the thieves are the owners themselves, simply ignoring the basic rules of security.

Often people use mixers or additional encryptors to make it harder to track transactions and identify the number of coins in a crypto wallet. This allows them to further protect their savings from uninvited guests.

The public key is a combination of 32 numbers and letters of the Latin alphabet. It's used to send coins to the sender. All the user needs to do is send the address to the sender, and the funds will be credited. The public bitcoin address will change constantly with each new transaction.

What is a private key

The private key, like a real key, unlocks your cryptocurrency vault so that you can use it. It is a complex combination that no one can guess. The number of possible private keys is close to the number of atoms in the known universe. This is a vital security principle in cryptocurrencies like Bitcoin and Etherium. Your coins are safe because they are encrypted in an incredibly large range of values.

If you lose your private key, you lose access to your funds. If someone finds out your key, they will be able to spend your cryptocurrency. It is important to keep the combination of symbols out of sight.

Seed phrase

Seed phrase is a list of secret words which contain all the information needed for Bitcoin wallet recovery. Usually this phrase consists of 12 (24) English words, which are generated by the wallet software, and user should write it down on the paper or save it in some other safe place. If the computer crashes, you can download the same (or other) software and use the sido phrase to regain access to the balance.

You need to keep the words in a safe place, because anyone who gets hold of them can access your crypto wallet. Never store Seed phrase on any site. Not all wallets are hierarchical deterministic or HD wallets which generate Seed phrase.

Where to store bitcoins - Desktop wallets

The first and best option for storing Bitcoins in this category is the official client, Bitcoin Core. It provides the highest level of protection of your funds and also provides full functionality of cryptocurrency storage applications for computer: sending, receiving funds, address book, control over commission.

The disadvantage is its size. You have to download all the Bitcoin blockchain data to use it. It takes more than 200 GB. This provides a high level of protection for your funds. After all, the application does not need to contact an external server for transactions, because all the data is on your computer. So there is less chance for fraudsters to rip you off.

Good desktop wallets also include Electrum, Armory, Exodus and Jaxx. The last two are multi-currency and have a built-in Shapeshift system that allows exchanges between cryptocurrencies within the program.

Benefits:

• convenient use;
• extensive functionality
• security (but you still need to take care of computer security separately)

Disadvantages:

• consume a lot of space
• require access to a computer.

You should make sure you have some extra space and set up a backup in case the file is damaged or the computer crashes.

Web Wallets

Storing bitcoins online is not a good idea. But sometimes there is simply no other option. For example, if you are a cryptocurrency trader and you play on the exchange, or if you need to make transactions as fast as possible.

There aresome kinds of web wallets: exchange and regular sites (like Green Address).

Exchange wallets are for trading. Do not store large amounts of cryptocurrency on them. They only have the general protection of the site itself. In addition, the withdrawal of Bitcoins from the exchange is accompanied by high commissions.

Ordinary online wallets are suitable for storing small amounts. They should not be used as a primary way to store your Bitcoins, because it is not secure.

Benefits:

• fast access to funds;
• intuitive
• capability to process a transaction instantly.

Disadvantages:

• low level of protection;
• high fees;
• require registration

Mobile apps

Mobile applications for storing Bitcoins were created with the expectation that they will be popular because everyone has a smartphone nowadays. If a person is an active user of cryptocurrency, they will definitely have a mobile crypto-wallet.

Popular applications: Bitcoin Wallet (analog of Bitcoin Core), MyCellium, ArcBit and Bither. The home page gives immediate access to balance, sending and requesting funds. They also allow you to view the history of transactions.

Hardware wallets for storing Bitcoins

The devices from Ledger, Trezor and Keepkey are considered good. What is the secret of their super-security? The first time you connect, you need to set a password from 4 to 8 digits. It must be entered at each connection, as well as to confirm operations. There is another security barrier. A 24-word mnemonic phrase is provided once the first time you connect.

Each word must be written in the same order. If you lose your flash drive, you can use this phrase to regain access to your bitcoins on a new machine. If you enter the PIN incorrectly, the device will shut down. Three wrong entries in a row will lock the device and reset its data. It will need to be reconfigured or access restored with a mnemonic phrase.

Benefits:

• can put any amount of bitcoins for a long period of time;
• high security level
• compactness

Disadvantages:

• convenient to use (only two buttons to navigate)
• cannot quickly perform a transaction
• cannot perform transactions quickly.
• high price

Paper wallets for storing Bitcoins

Paper wallets cannot be hacked or counterfeited. But you need to keep them in a safe place, because they carry a private key which gives you access to your funds.

To create a wallet you go to walletgenerator.net and follow the instructions. Then you print it and delete the file. On the front you will see a public key. Scanning it will allow you to send funds to that wallet address.

The private key is displayed on the inside. Once you want to withdraw your funds from the wallet you will need to scan the private key. You can do this with the Bitcoin Wallet app. However, after withdrawal the crypto wallet becomes unusable.

Benefits:

• high security level
• can be stored anywhere
• easy to replenish.

Disadvantages:

• after withdrawal is unusable;
• in case of loss, you can say goodbye to your funds
• cannot send Bitcoins

Paper is suitable for long-term storage of Bitcoins. If you want to invest in cryptocurrency now and remember about it in 10 years, it's not a bad option. The main thing is not to lose this paper.

How and where to store Bitcoins - basic recommendations

It is important to know the basic rules of bitcoin storage, which will allow you to avoid unpleasant situations and loss of money:

1. Create backups.Save a backup copy of your software client in a safe place after depositing cryptocurrency. Make multiple copies of a paper crypto wallet, handwrite the address and key, engrave it on a tree, take a screenshot or photo, and drop it onto a password-protected flash drive. Keep backups so no one has access to them but you.
2. Check site domains.Phishing resources can steal access to your exchange account or online wallet. A rogue site pays for search engine ads, chooses a domain very similar to the one used by the real resource, and makes an identical interface design. After entering the data of their real account, the user loses all their savings.
3. Chose difficult passwords, but ones you can remember.
4. Use anti-virus software on your computers and phones.Install an extra anti-virus extension in your browser to warn you against phishing sites. Don't install free clients, buy licensed protection.
5. Order hardware wallets from the manufacturer.Do not take flash drives off hand. They may have malware installed that will give fraudsters access to the funds.

Is it safe to use Bitcoin wallets?

Where is the best place to store bitcoins? The safest option for storing Bitcoins is a hardware wallet. However, if you lose the flash drive without having a backup of the private keys, you will lose all the Bitcoins on it as well. The least secure option is the online service, since the keys are stored by intermediaries.

Experienced users store the bulk of their digital assets in a hardware wallet. And the coins needed for daily expenses are transferred to a mobile crypto wallet. Experienced users store the bulk of digital assets in a hardware wallet.

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