Storing Bitcoins Securely

How can I store Bitcoins safely?

It is not difficult to store Bitcoin safely, even for non-technical Bitcoin beginners. On this page you will learn what options exist, which might be the right one for you, and how it works. In most cases, Bitcoins are first purchased on an exchange (How to buy Bitcoin). After the purchase of Bitcoin it often happens that the user logs out, leaving the digital asset on the exchange. This is a common mistake, especially if larger amounts are involved. One of the many strengths of Bitcoin is that the digital units can be managed independently and securely with so-called 'wallets'. Only you have access to your 'digital wallet' and no other third parties that you have to trust.

Bitcoins can be managed securely if set up correctly.

Bitcoins can be managed securely if set up correctly.

How can I store Bitcoins safely?

In principle, there is the possibility to manage Bitcoins safely.It is not difficult to store Bitcoins safely, even for Bitcoin beginners. On this page you will learn what options exist for this, which is the right one for you and how it works. In most cases, Bitcoins are first purchased on an exchange (Instruction - Buy Bitcoins). After a suitable exchange has been found and the registration as well as verification has been successful, the purchase of Bitcoins for Euros typically occurs. Then it often happens that the user logs out, leaving the cryptocurrencies on the exchange. This is a mistake that could cost dearly over time. Especially if larger amounts are involved, you should not 'leave' Bitcoins on an exchange. One of the many strengths of Bitcoin is that the digital units can be managed independently and securely with so-called 'wallets'. Only you have access to your 'digital wallet' and no other third parties that you have to trust.

Tip 1: Do not leave Bitcoins on exchange platforms

An exchange is and remains to be a very attractive target for hackers. The most famous case is the exchange hack of Mt.Gox in 2014, where hackers stole over 740,000 Bitcoins. The Bitcoin price also plummeted after that. Today - a few years later - there are a significantly higher number of Bitcoin exchanges, so the price would probably not suffer such heavy losses in the event of such a hack. Furthermore, platforms have become significantly more secure (e.g., with 2-factor authentication and IP whitelisting). Nevertheless, it could still happen that Bitcoins are stolen by a hack on an exchange platform.

Tip 2: Set up a Bitcoin wallet

There are free wallets and those that come with a cost. Free mobile wallets are quickly downloaded and set up but should only be used for managing smaller amounts. Significantly more secure, on the other hand, are 'hardware wallets' since these devices are designed specifically for securing Bitcoins.

Bitcoin Wallet Types

Bitcoin wallets can be divided into two categories:
1) 'Hot Storage' - Wallets that are connected to the internet (exchange, cell phone, computer)
2) 'Cold Storage' - Wallets that are not connected to the internet (hardware wallets)
Basically, it can be said that wallets from the category 'Hot Storage' are less secure than 'Cold Storage' wallets, because they offer more attack surfaces by being connected to the internet.
We distinguish four different wallet types on this page, which are divided between the two categories:
Hardware, Mobile, Desktop and Trading Wallets.
The most secure wallet types are Hardware Wallets, as the 'passphrase' is generated offline. The passphrase is randomly generated when you set up a wallet and is communicated to you via the device. In Bitcoin, the passphrase is like a key to your vault. If another person has the key, they can open the vault and remove the contents. Mobile and desktop wallets are also relatively secure, but have more weaknesses. Trading wallets (Bitcoins on exchanges) are not recommended, as you do not have the passphrase there. Not your keys, not your Bitcoins.

This results in the following evaluation of the various wallet types according to the (most important) criterion of security:

Hardware Wallets

Safe

Mobile Wallets

Desktop Wallets

Trading Wallets

Only if you alone know the passphrase to your wallet, do you have full control and security over your Bitcoin holdings. A passphrase is similar to a password but consists of several words for security reasons. If you lose your wallet, you can use the passphrase to recover your wallet on another device..

In addition to the security features, the five different wallet types also differ in price and handling. Only the hardware wallets are chargeable, but they are particularly secure and easy to set up. Paper wallets are free of charge, but the secure setup is complicated. Mobile and desktop wallets are usually free of charge and easy to set up. However, they do not offer the same level of security as hardware wallets.

Hardware Wallets
Depending on the manufacturer and product, a hardware wallet costs between 40 to 150 USD and is the simplest and most secure storage option for Bitcoins.
Mobile Wallets
There are various wallet apps for different smartphones. However, smartphones have security vulnerabilities, so that the passphrase could be spied out as soon as the wallet is set up.
Desktop Wallets
Operating systems also have security vulnerabilities. The private key could already be spied out when setting up the wallet.
Trading Wallets
Basically, cryptocurrencies should only be kept on a trading account for a short period of time. To increase the security for your account, platforms usually offer to set up 2-factor authentication. The setup is simple and increases security many times over.

Bitcoin Hardware Wallets

Setup for beginners

Safety

Price

Hardware wallets are small devices with which you can securely manage your cryptocurrencies (e.g. Bitcoin). There are several manufacturers that sell these products. If you lose the device, your Bitcoin are not lost - you can always 'restore' your Bitcoin with a new device, or with another wallet. This works because when you set it up, you are given a passphrase (usually 12-24 words) and have to write it down. Even if someone steals your device, it is not possible to access your Bitcoins because the devices are additionally protected with a PIN you choose. If the PIN is entered incorrectly three times, the device will be reset to factory settings and all data will be deleted. Only by entering the passphrase is it then possible to 'restore' the wallet. In the following section, we will introduce you to the most well-known and reputable manufacturers of hardware wallets. We strive to ensure the accuracy of the information listed below, for example by regular checks and updates, but we do not accept any liability for missing or outdated information. Last updated May 2022.

Ledger Nano S Plus

Source: ledger.com

The Ledger Nano S Plus is based on the most secure chip type on the market and ensures optimal security for your Bitcoins. With Ledger Live you can manage 24 cryptocurrencies and 1250+ ERC-20 tokens directly from your smartphone or computer, including NFTs. The Plus model has a bigger screen and more memory.

79 EUR (~83,00 USD)

Buy the Ledger Nano S Plus* →

Ledger Nano X

Source: ledger.com

The Ledger Nano X is a Bluetooth-enabled security device that stores your private keys. This ensures that all your crypto assets are protected, no matter where you are. You have the option to store applications for up to 100 currencies on the hardware wallet. These include Bitcoin, Ethereum, Litecoin, and many more. Your Private Key is secured as it is stored on a certified chip, like the ones used in credit cards or passports.

149 EUR (~157 USD)

Buy the Ledger Nano X* →

Ledger Family Pack X

Source: ledger.com

Help your family get started safely with Bitcoin. With a Ledger Nano X they can secure and manage their Bitcoins. This package contains 3 Ledger Nano X to introduce your family to the world of Bitcoin.

399 EUR (~421 USD)

Buy the Ledger Family Pack X* →

BitBox02

Source: shiftcrypto.ch

BitBox is a hardware wallet designed and manufactured in Switzerland. You can safely store your Bitcoins on the minimalist designed hardware wallet. The BitBox02 comes in two editions: The Multi Edition which supports Bitcoin, Litecoin, ERC-20 tokens and U2F and the Bitcoin-only Edition which only supports Bitcoin, reducing the attack surface even more. To make the wallet as user-friendly as possible the wallet backup is automatically saved to the included microSD card, optionally it can also be displayed as a 24-word seed. The BitBoxApp, with which you manage your Bitcoins, is also available in German.

119 EUR (~125 USD)

Buy the BitBox02* →

Trezor One

Source: trezor.io

The Trezor One is a secure hardware wallet for storing Bitcoin and other cryptocurrencies. It is designed to be as simple as possible to make it intuitive to use and easy for beginners. In case you lose the device, the 12 to 24 word passphrase allows you to recover your private key on other devices at any time.

83,49 EUR (~88 USD)

Buy the Trezor One* →

Trezor Model T

Source: trezor.io

The Trezor Model T is the next-generation hardware wallet for cryptocurrencies, designed to be a universal vault for all your digital assets. Store and encrypt your coins, passwords and other digital keys with confidence. Trezor Model T supports more than 1000 cryptocurrencies.

301,29 EUR (~318 USD)

Buy the Trezor Model T* →

Card Wallet

Source: cardwallet.com

Holding Bitcoin is not self-explanatory for beginners. Smartphones get lost, hard drives can crash and online wallets get hacked frequently. The safest way of storing Bitcoin long-term is offline in a physical way. That’s why the Austrian company Coinfinity developed the Card Wallet - a professional cold storage solution. Learn more about the Card Wallet on their website.

39,90 EUR (~42 USD)

Buy the Card Wallet* →

Mobile Wallets

Setup for beginners

Safety

Price

Android Mobile Wallets

Green bar = Suitable for beginners
Orange bar = For advanced users

Bitcoin Wallet

BRD

Electrum

BitPay

Coin

Mycelium

Bither

Eclair Mobile

BLW

Edge

iOs Mobile Wallets

Green bar = Suitable for beginners
Orange bar = For advanced users