Securely Storing Your Bitcoin
One of the most important steps after purchasing Bitcoin is to secure it properly. Unlike traditional banks, Bitcoin transactions are irreversible, so if you lose access to your funds, there is no way to recover them. This section will cover the following:
- The importance of secure storage: Why keeping your BTC in an exchange isn’t ideal.
- Hot vs. cold wallets: The key differences between software wallets (convenience) and hardware wallets (security).
- Best wallets for Bitcoin: A breakdown of trusted crypto wallet options based on security, usability, and backup features.
- How to transfer Bitcoin to a wallet: A step-by-step guide on safely moving your BTC off an exchange.
Hot wallets (software wallets) like Trust Wallet vs MetaMask are user-friendly but remain connected to the internet, making them more vulnerable to cyber threats.
Cold wallets (hardware wallets) like Ledger Nano X and Trezor provide offline storage, offering maximum security against hacks.
Security
If you haven’t already learned how to securely use and store bitcoin, you will want to make that your priority. To get an idea of your current level of bitcoin security, consider the following questions:
- Does anyone else, including cryptocurrency exchanges and wallet providers, have access to your bitcoin private keys? If your answer is yes, then you will want to consider moving your bitcoin to a wallet that only you control. To understand why this is important, read “Why Do I Need a Bitcoin Wallet?”, and if you need help choosing a wallet, check out our guide. We recommend using a hardware wallet like a Ledger Nano X if you plan to store other cryptocurrencies, or a ColdCard if you plan to store bitcoin only.
- If your house burned down tomorrow, would you still be able to access your bitcoin? It’s important to store your private keys (or seed phrases) in multiple physical locations so that you can always recover your funds.
- Are you familiar with the many types of online scams and cryptocurrency scams? If not, then read our article “How to Spot Cryptocurrency Scams” to protect yourself from falling victim to one.
- Do you mind having your financial history, including account balances, recorded on a public ledger? Bitcoin is a transparent payment system where everyone can see everyone else’s transaction history. It is very difficult to transact privately using bitcoin, so be sure to understand the privacy best practices.
Keep Learning
Perhaps the most important thing to do after buying bitcoin is to keep learning! Bitcoin is a multifaceted system that involves economics, technology, and some pretty big social implications.
Vijay Boyapati’s article “The Bullish Case for Bitcoin” does an excellent job describing the monetary and economic significance of Bitcoin. The article takes about an hour to read, although it was originally released in four parts for easier reading (Part 1, Part 2, Part 3, Part 4).
For a better overall understanding of how Bitcoin works on a technical level, check out this video “How Bitcoin Works In 5 Minutes”.
Finally, it is important to learn about the social implications of Bitcoin. A great starting place is “Why Bitcoin Matters for Freedom” by Alex Gladstein of the Human Rights Foundation, which describes some of the social impact Bitcoin is already having today.
