Should I Buy a Cold Wallet for My Bitcoin?

Owning Bitcoin comes with its own set of responsibilities, including its safekeeping. Of the various ways to hold your coins, one of the most popular is with a cold wallet as it’s one of the most secure. So, if you’re new to Bitcoin and wondering if you should buy a cold wallet to protect your coins, the short answer is: Absolutely.

Cold wallets are typically one of the safest options to protect one’s Bitcoin, so long as they’re never connected to the internet- they’re difficult (if not impossible) to hack, thwarting any would-be thieves from accessing your Bitcoin.

Custodial Wallets vs Cold Wallets

Amongst Bitcoiners, the Golden Rule is: Not your keys, not your coins. Here’s what this means:

Private keys are basically passwords needed in order to access bitcoin on its respective blockchain. Your coins are on the blockchain, not in the device. Private keys can take the form of seed words/phrases- a password between 12-24 words- or a string of numbers and letters that must be input in order to access your coins.

If you’re using a custodial wallet via a third-party like Coinbase, Gemini, or PayPal- you relinquish your private keys to said third-party. These companies are custodians of your Bitcoin. Sure, the coins are technically yours, but they have the keys. If the company gets hacked, or goes bankrupt, there’s no guarantee you’ll see your coins again…

In fact, if history is any indication (ie FTX’s Sam Bankman-Fried debacle, and Celsius’ demise), you won’t get any of your coins back.

Using third-party custodial wallets are popular for newer Bitcoiners due to their ease of use. With Coinbase, Gemini, and other custodial exchanges, customers can typically buy, sell, and save coins all in one place. However, these sites are vulnerable to hacking, and in less than a decade, these exchanges and custodial wallets have seen upwards of $2.5 Billion disappear from their books, wiping clean customers’ wallets.

Cold wallets, in contrast, are external devices which require your private key to access; Then, you can access your coins on the blockchain. This is the most secure way to access your coins, as you should be the only person who knows your seed phrase/private keys.

Because these devices never connect to the internet, they are essentially unhackable. The only way a cold wallet can be compromised is if you give your seed phrase away to a scammer, leave your seed phrase in a vulnerable spot (ie written on a piece of paper, in an email, typed on a computer/phone notepad, etc.), or purchase a cold wallet from anywhere but the manufacturer (scammers often sell “new” cold wallets to unsuspecting victims online, and still retain the seed phrase to steal your coins).

So long as you’re responsible with your private keys and don’t leave yourself vulnerable, cold wallets are your best bet for keeping your coins safe.

Now, on to our top picks for cold storage…

SeedSigner

The SeedSigner is a completely trustless, airgapped (non-internet connecting) cold device.

SeedSigner is made with total security in mind: Airgapped (meaning it doesn’t connect to the internet), trustless (runs on open-source code, there’s no person or company holding your data), and is cheap to make and easy to build.

For less than $85, anyone, anywhere in the world, can make a SeedSigner.

With its basic components, the SeedSigner doesn’t store your seed words in the device. Every time it’s shut off, any data previously input is forgotten. SeedSigner was initially conceived as a way to protect large sums of Bitcoin, for long-term storage, and few transactions over long periods of time.

SeedSigners are often used as “Multisig” devices, meaning more than one type of key is required in order to access Bitcoin. Normally, these keys are kept- secretly and safely- in other locations, away from one’s computer (or whatever device hosting the software wallet); This severely lessens the chance of a thief or corrupt government official accessing one’s coins. Even if the SeedSigner was found, no data is stored in it. It’s airgapped, so it cannot connect to the internet (data leaks or hacking is not possible). If multisig was set up, the would-be thief would need at least two of the keys in order to attempt to access the Bitcoin.

Unlike other popular wallets like Ledger or Trezor, SeedSigner lacks the convenience for everyday transactions; Instead, it’s a secure “vault” for long-term storage. What it lacks in convenience, it makes up in superior security.

https://youtu.be/pE9N0Wr45H0

ColdCard

COMING SOON… [currently in writer’s mode…]

A Word of Warning…

In the Bitcoin community there are two golden rules, the first: Not your keys, not your coins. The second: Trust no one. Just because you’ve purchased a cold wallet, doesn’t necessarily mean you’re safe from scammers or other nefarious actors. The revolutionary impact of crypto is that we become our own bank, and with that, comes big responsibility.

Here’s a few things you should know…

#1. Scammers are Everywhere.

On every social media platform, scammers will DM unsuspecting newcomers, often posing as “tech support” or “Admin”. Scammers cast a wide net, and ask for personal info, from email addresses to private keys in order to “process” something in their “system”. Sometimes they’ll send an external link for you to click- these are always malware/spyware to infect your computer or phone.

Know that these are always scams, and a lucrative one at that.

Never give any information online, lest you wake up to an empty crypto wallet the following day.

Remember: Not your keys, not your coins. Trust no one.

#2. Always Buy Directly From the Manufacturer

Another way scammers steal your Bitcoin is by selling cold wallets online as “new”. Regardless if they’re on Amazon, Ebay, or any other site, assume these cold wallets are compromised.

Scammers will open the package, write down the seed phrases, re-seal the box, then ship the device to naive customers. The scammer is able to access the wallet at any time and clean it out. Never purchase a cold wallet from anywhere but directly from the manufacturer.

#3. Never Save Your Keys in These Ways…

We’ve grown so accustomed to the convenience our digital products provide, that we rarely think of the dangers they pose. When storing cold wallet information like our private keys, most newcomers think that saving them on a smartphone or computer is safe way to do so.

In reality, this is a surefire way to get your Bitcoin stolen.

Scammers are everywhere, and can access digital information with alarming ease. Be vigilant in this regard and never store your info in the following ways:

-Email

-The Cloud

-Text Message

-Saved on a computer

-Saved via photo/screenshot

-Unencrypted USB

To keep your keys safe, keep them offline.

There are various ways to store your private keys/seed phrases safely, including:

–BorderWallets [excellent, pattern-based method]

–Encrypted USB [with a strong password]

–CryptoSteel [Water/Fireproof for use with Ledger devices]

–Billfodl [Waterproof/Fireproof steel case for up to 24-word phrase]

-Use a combination of methods as a safety net, just in case (Plan A, B, and C)

Final Thoughts

Cold wallets are one of the safest ways to keep your Bitcoin safe from hackers, thieves, and corrupt governments. The SeedSigner- a Bitcoin-only supported device- provides excellent protection; It’s main utility is long-term storage and security.

Always protect your private keys and other private information; scammers will take advantage of any opening given to them.

By using a cold wallet and remaining vigilant, your Bitcoin will be safe from bad actors.

And always remember the two Golden Rules: Not your keys, not your coins, and Trust No One.

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