OFFLINE BITCOIN STORAGE

July 22nd, 2016 9:00 am
offline bitcoin storage You may already have a bitcoin wallet installed on your mobile phone to both store and spend bitcoin. This is generally the most common, user-friendly approach and effective for day-to-day bitcoin use, but it's a good idea to understand some of the other methods of bitcoin storage. There are plenty of options but for this post we wanted to take a specific look at one of the best ways of providing a higher level of security, taking your bitcoin offline.

Any bitcoin wallet you chose will essentially be the sum of two parts; a public key also known as your wallet address, and a corresponding private key, which acts as your password and is required to send bitcoin from your wallet to somewhere else. Storing bitcoin offline simply involves securing your wallets private key separate from any connection to the Internet, greatly reducing potential online security vulnerabilities. This might sound complex at first, but there are several fairly simple ways to store bitcoin offline.

Hardware Wallet
There are a variety of devices on the market, which can store your bitcoin and make offline storage a breeze. The TREZOR for example, is a gadget which will generate and store your bitcoin private keys electronically, ensuring your bitcoin are safe and giving you access to your funds when needed. This option does require a bit of initial investment but prices vary and for large amounts of bitcoin the confidence it provides could be worth it. You can read more about the TREZOR here. There are a couple of other hardware wallets worth investigation. The Ledger Nano and its younger brother the Nano S are great options. The Nano especially is very competitive on price and offers similar levels of security to the TREZOR. Also take a look at the keepkey, similarly priced to the TREZOR, the keepkey is a sleek user friendly alternative.

Paper Wallet
As a cheaper offline storage solution you can also go the analog route. As the name suggests a paper wallet option allows you to create a physical paper copy of your bitcoin keys. You will need a few basics, including access to a printer and some time to set things up correctly, but the process is still relatively simple. Generally you will generate your own bitcoin address, which can be done completely offline, and then literally print out both your public and private key to keep safe however you please. There are plenty of excellent tutorials online which can run you through the setup process, and this is certainly an interesting, tactile approach to security which offers lots of room for creativity.

Downloaded Wallet
If you are more confident in your technical computer skills a third offline option exists in downloading a copy of your wallet details, a wallet.dat file. The file can then be stored on a removable storage device such as USB drive. This involves a little more effort and technical skill, especially when you want to move your bitcoin again.

Each of these options, while protecting you from online security weaknesses, is not 100% fool proof. You still need to manage the risks of things getting lost, stolen or damaged, but if you feel confident to take responsibility for your own bitcoin keys, offline storage is a great security measure. The reward for proper set up is a safe way to hold large amounts of bitcoin away from the risk of cyber-attacks. CoinLoft recommend you approach any wallet option or service with great care and consideration, research what is going to suit your own needs and follow any instructions carefully.
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