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What Are the Time-Tested, Most Secure Methods to Hold Bitcoin?

By Evan Jones05/10/2024


Bitcoin is considered to be the most secure blockchain network thanks to its proof of work consensus mechanism. Even so, there are millions of lost Bitcoins, either due to hacks, poor self-custody, or other issues. 

With that in mind, it seems useful to discuss some of the most secure ways to hold Bitcoin that have existed for the past decade if not longer. After that, we’ll discuss the most secure way to store your BTC.

Reliable Ways to Store Bitcoin Over the Past Decade

Paper Wallets

Paper crypto wallets, though not very popular, are likely one of the most reliable ways to store Bitcoin, and will always be one of them. Paper wallets are essentially the first way to store crypto, and they remain incredibly secure and reliable as long as you don’t lose the piece of paper or whatever you write down the information on. 

This is proven when you realize that many of the lost Bitcoins that exist are due to people improperly storing or recording their paper wallet information. Without that info, the funds in the wallet can never be accessed.

This reality means that a paper wallet is essentially the most secure way to store your digital assets. When set up is done properly, such as following steps to ensure that when you generate your paper wallet you aren’t connected to the internet, there is no trace of your wallet online, meaning there is nothing to hack and that the only way to access your funds is by holding your paper wallet. 

Paper wallets are probably the most secure way to store Bitcoin, but also the most complicated and least user friendly, which is what led us to software and hardware wallets. You can engrave a paper wallet on metal rather than just using paper as extra security. 

Software Wallets

Software wallets were the next step in Bitcoin storage, though their first instances were essentially full Bitcoin node clients. While lite versions like Electrum Wallet existed in 2011, not every BTC user was that aware of the importance of wallet security. 

So, those that didn’t want to store their BTC using a full or lite node often instead held it on a trading platform like Mt. Gox, as these were some of the only places you could store and manage BTC other than through a client. 

Of course, this didn’t work out well for those that had BTC on Mt. Gox, but it helped push forward the development of more software wallets and the importance of self-custody of Bitcoin.

Software wallets remain a safe way to store crypto, as long as it’s a non-custodial wallet that you control the private keys to there is little risk of losing funds held in a software wallet. As long as your recovery phrase is safe somewhere, no one should be able to access your wallet.

Hardware Wallets

The first instances of hardware wallets for cryptocurrencies like Bitcoin were the Trezor One, which launched in 2013 through crowdfunding, and the Ledger Nano in December 2014. These were the first crypto wallets that allowed you to store your private keys in an isolated environment, safe from prying eyes. 

Hardware wallets take the security of software wallets one step further with the key distinction that your private keys are stored in an isolated environment, rather than on your device. With this separation, it makes it essentially impossible for someone to take your funds without having your physical hardware wallet in addition to your passcode. 

Like with software wallets, the only real risk of a hardware wallet is if someone somehow gets a hold of your secret recovery phrase to recover your wallet on another device. 

Not Your Keys, Not Your Crypto

Though it is a bit of a cliche phrase within the sector, “not your keys, not your crypto” is one of the most true statements that exists within blockchain. 

Basically, the idea is that if you’re not the one who is the sole person able to move your crypto assets, then they aren’t really yours. This means when storing your assets on something like a cryptocurrency exchange, especially a centralized one, you aren’t the only one who can access them. 

You may think you’re the only one who can access them because you have to log into your account to deposit or withdraw funds. But, the reality is that the exchange executes these transactions using the private keys, not you. Technically, you have no way to withdraw funds from the platform unless they do it for you.

This reality can be seen in almost all past exchange failure occurrences. Whether it was Mt. Gox, FTX Exchange, Celsius, or another incident, you as a user were unable to withdraw your funds even though they were “in your account”. 

Most Secure Method?

The reality of keeping your Bitcoin safe is that it’s not actually that difficult. If you withdraw your Bitcoin or another digital asset to a hardware wallet address, or at a minimum a non-custodial wallet address (meaning one you hold the private keys to), then there is essentially nothing that can happen to your BTC.

Consider this: If you bought 1,000 Bitcoin in 2011 (when it was trading for $1 a unit) and threw them on a paper wallet and didn’t touch them till today you’d have over $60 million in BTC. You wouldn’t have been affected by Mt. Gox, Celsius, FTX or any other crypto scam.

When you store your Bitcoin on a non-custodial wallet, the only risk you face is if you’re dumb enough to throw out or lose your secret recovery phrase that you had to note when you set up your wallet initially. 

Alternatively, you could give someone your laptop and tell them your wallet password. It’s pretty hard to just lose crypto without your own stupidity, which is both a positive and negative.

As long as you keep that secret recovery phrase somewhere safe (from theft, water, fire, etc.) there is no risk of losing your Bitcoin, as it can’t be moved from your wallet without you doing so.

Even if you throw out the device that held your Bitcoin wallet, whether a hardware wallet, laptop, or cell phone, you can recover access using your secret recovery phrase. 

Unfortunately, for those that did this before the update to Bitcoin that allowed for recovery phrases, this isn’t an option and they’re forced to find the physical device.

Closing Thoughts

Even since Bitcoin’s first block, there have always been reliable ways to store and hold your BTC. Though they started out as likely too complicated for many new entrants into the cryptocurrency sector, they’ve only gotten easier to use, especially software and hardware wallets. 

Self-custody of Bitcoin, has, and always will be, the most reliable way to hold Bitcoin for the future.

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Evan Jones


Evan entered the crypto scene in 2017, attracted to the many disruptive possibilities that blockchain could have on current world systems. He has a keen interest in decentralized services, payment processing, and viable NFT use cases such as event ticketing. He spends his days writing with his dog Kobe under his feet, if not on his lap.

Further reading

What is a Bitcoin Private Key? image
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