Storing bitcoins

This pagina is a discussion of the different ways of storing bitcoins, whether for investment purposes or spil a medium of exchange.

Spil bitcoin is a digital asset, it can be very un-intuitive to store securely. Historically many people have lost their coins but with decent understanding the risks can be eliminated. If your bitcoins do end up lost or stolen then there’s almost certainly nothing that can be done to get them back.

tl,dr The best way to store bitcoin is to either buy a hardware wallet or install a multisignature wallet. Have your wallet create a mnemonic recovery phrase, write it down on paper and store it te a safe place. The wallet should be backed by your own utter knot.



Storage of bitcoin can be violated down ter a few independent goals:

  • Protection against accidental loss
  • Verification that the bitcoins are genuine
  • Privacy / protection against spying
  • Protection against theft
  • Effortless access for spending or moving bitcoins

The kunst and science of storing bitcoins is about keeping your private keys safe, yet them still being lightly available to you when you want to transact with them. It also requires verifying that your recieved bitcoins are real, and stopping an adversary from spying on you.

Protection from accidental loss

Ter the past many people have accidentally lost bitcoins because of failed backups, forgotten hard drives or corrupted SSD devices. Through bitter practice it wasgoed found that one of the most practical storage mediums is pencil and paper. The private keys of a bitcoin wallet are encoded into random words from a dictionary which can be written down. If the your hard drive crashes you can find the paper with the mnemonic phrase and restore the entire wallet. All good wallet software ask their users to write down the mnemonic recovery phrase of the wallet. It is worthwhile to keep copies te several locations so that even if your huis burns down and nothing remains you can still recover the bitcoins.

Verification and privacy

Storing a mnemonic phrase only stores private keys, it cannot tell you if you have actually received bitcoins and te what quantity. For that you need wallet software.

If you received specie banknotes or gold coins to be stored, you wouldn’t accept them without verifying that the banknotes were genuine and that the gold wasgoed real. The same is true with bitcoin, payments vereiste be genuine or else you may be slipped counterfeit bitcoins and be left out of pocket. The most secure kleintje of wallet is one which verifies all the rules of bitcoin, known spil a total knot. For recieving large volumes it is essential to use wallet software backed by a total knot. If bitcoin is digital gold, then a utter knot is your own person goldsmith who checks that received bitcoin payments are actually real. Lightweight wallets which don’t check all of bitcoin’s rules are only adequate for receiving smaller amounts or when you trust the sender. See the article about total knots.

Your wallet software will also need to learn the history and balance of its wallet. For a lightweight wallet this usually involves querying a third-party server which leads to a privacy problem spil that server can spy on you by witnessing your entire balance, all your transactions and usually linking it with your IP address. Using a utter knot avoids this problem because the software connects directly to the bitcoin p2p network and downloads the entire blockchain, so any adversary will find it much tighter to obtain information. See also: Anonymity

So for verification and privacy, a good storage solution should be backed by a total knot under your own control for use when recieving payments. Note that the total knot wallet on an online pc can be a watch-only wallet that does not have the capability to actually spend or steal the bitcoins.

Protection from theft

Possession of bitcoins comes from keep your capability to keep the private keys under your off the hook control. Any malware or hackers who learn what your private keys are can create a valid bitcoin transaction sending your coins to themselves, effectively stealing your bitcoins. The average person’s laptop is usually vulnerable to malware so that voorwaarde be taken into account when determining on storage solutions.

Effortless access

Some users may not need to actually stir their bitcoins very often, especially if they own bitcoin spil an investment. Other users will want to be able to quickly and lightly budge their coins.

Discussion of wallet solutions

Hardware wallets

Hardware wallets are special purpose security-hardened devices for storing Bitcoins on a peripheral that is trusted to generate wallet keys and sign transactions.

A hardware wallet typically holds the private keys te its internal storage and is designed to be malware resistant. The device signs the transactions internally and only transmits the signed transactions to the laptop. The separation of the private keys from the vulnerable environment permits the user to spend bitcoins on an untrustworthy pc with diminished risk.

Unluckily spil of November 2017 no hardware wallet on the market can be lightly connected to a total knot, so using them usually involves not verifying the rules of bitcoin and querying a third-party server which can spy on you. Hardware wallets are also physical objects that can be found and which prove that you most likely own bitcoins. They also cost more than other solutions.

Multisignature wallets

A multisignature wallet is one where numerous private keys are required to stir the bitcoins instead of a single key, avoiding a single point of failure. Thesis private keys can be spread across numerous machines ter various locations with the rationale that malware and hackers are unlikely to infect all of them. The multisig wallet can be of the m-of-n type where any m private keys out of a possible n are required to budge the money. For example a 2-of-3 multisig wallet might have your private keys spread across a desktop, laptop and smartphone, any two are required to stir the money but the loss of any one does not result ter loss of money especially because they can be restored from paper backup.

Multisignature wallets have the advantage of being cheaper than hardware wallets since they are implemented te software and can be downloaded for free, spil well spil being convenient spil all keys are online and the wallet user interfaces are typically effortless to use. Wallet software Electrum and Armory can create multisig wallets. Hardware and multisignature wallets can be combined by having a multisignature wallet with the private keys held on hardware wallets. After all a single hardware wallet is still a single point of failure.

Hot wallets

A hot wallet refers to keeping single-signature wallets with private keys kept on an online rekentuig. Most bitcoin wallet software out there is a hot wallet. The bitcoins are effortless to spend but are maximally vulnerable to malware or hackers. Hot wallets may be suitable for puny amounts.

Cold storage wallets

A cold wallet generates and stores private wallet keys offline on a clean, newly-installed air-gapped rekentuig. Payments are recieved online with a watch-only wallet. Unsigned transactions are generated online, transferred offline for signing, and the signed transaction is transferred online to be broadcast to the Bitcoin network.

This permits funds to be managed offline te Cold storage. Used correctly a cold wallet is protected against online threats, such spil viruses and hackers. Cold wallets are similar to hardware wallets, except that a general purpose computing device is used instead of a special purpose peripheral. The downside is that the transferring of transactions to and fro can be fiddly and unweilding, and less practical for carrying around like a hardware wallet.

Bad wallet ideas

Custodial wallets

Custodial wallets are where an exchange, broker or other third party holds your bitcoins te trust.

The number one rule to storing bitcoin is this: if you don’t hold the private keys, you don’t actually own the assets. There are many many historical examples of loss due to custodial wallets: Bitcoinica, Silk Road, Bitfloor, MTGOX, Sheep Marketplace, BTC-e, Bitstamp, Bitfinex, Bithumb, Cryptsy, Bter, Mintpal and many more [1]

“Isn’t it just like keeping your money ter a handelsbank?”

Web wallets

Web wallets have all the downsides of custodial wallets along with all the downsides of hot wallets (exposed private keys), spil well spil all the downsides of lightweight wallets (not verifying bitcoin’s rules, someone could send you a billion bitcoins and under certain conditions the dumb web wallet would joyfully accept it)

Paper wallets

So-called paper wallets are an obsolete and unsafe method of storing bitcoin which should not be recommended to newbs to use. They simply store a single private/public keypair on paper. They promote address reuse and require unweildy and complicated live OS system boots to be safe, they risk theft by printers and typically rely on Javascript cryptography.

Paper wallets also do not provide any method of displaying to the user when money has arrived, users are typically driven to use third-party blockchain explorers which can lie to them and spy on them.

A much better way to achieve the job that paper wallets do is to use mnemonic phrases instead.

Cloud storage

This means storing your encrypted (or not) wallet opstopping on a cloud storage solution such spil Dropbox.

Removable media

This refers to storing wallet files on removable media like SSD or hard drives.

Refer to the warnings from thesis two linksaf:

Those articles recommend using GPG for encryption or a printer, instead a better solution is mnemonic phrases.

Other ideas

Time-locked wallets

An interesting unconventional solution. The idea is to use time-lock contracts to create a wallet which cannot be spent from until a certain date. One possible use-case might be by a gambling maniac who locks up money for paying bills for a month, after a month has passed and their time-lock wallet is opened they use that money for paying bills instead of gambling.

Time lock wallets don’t exist yet except for plain javascript pages which rely on Javascript cryptography and are therefore not safe.


If you intend to store a very large amount of bitcoins, for example ter a business, you should consider paying for security consulting.

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Webpagina with a bitcoin miner script

I found some of my users visiting a webpagina that seemed to have a bitcoin mining js script te its code:

My question is, with this are the users still infected even if they navigate away from the pagina? Do thesis sort of programs only work while the user has the pagina open te the browser?

Three Answers

with this are the users still infected even if they navigate away from the pagina?

Do thesis sort of programs only work while the user has the pagina open te the browser?

Yes, the script will only run on the webstek that includes it, while the pagina is open ter the browser

More information about this script:

Coinhive offers a JavaScript miner for the Monero Blockchain (. ) that you can embed te your webstek. Your users run the miner directly ter their Browser

The miner runs until you explicitely zekering it again or the user navigates away.

Coinhive does not show up to be “malware” since it does not emerge to do anything particularly harmful to the user’s rekentuig. If that is the case, the users computers were never “infected” with anything.

It is utterly common thesis days for websites to stream tons of third party scripts and cookies te the background and do hundreds of things you are not aware of every time you use the internet. Most sites fountain a Google Analytics tracking script when you visit them, even tho’ you did not authorize them to do that. But that would not be considered malware. Most sites blast persistent third-party cookies that track your presence from one webstek to another and create a massive profile of your online habits. This is why you could be shopping for boots on one webpagina, and then abruptly find that Facebook is serving you ads for footwear. But that also is generally not considered malware.

Ter terms of “harm” or “unwanted activity”, persistent tracking could be said to be more invasive than a coin mining script. The coin mining script is most likely just using some of the memory and CPU power of the end user’s laptop, which is no different from the hundreds of other javascript libraries that are getting loaded te the background without your skill.

I am not familiar with the coin-hive service, but actually script which you have provided contains such lines:

Spil you see it is using Workers. I wasgoed not investigatin the entire script, but anyway using web workers means that some operations can be running even after pagina wasgoed closed. More information ter this postbode.

So the very very first response to your question is YES, users can be possibly infected for some time after pagina wasgoed closed (ter theory, if script is written ter such way).

But actually script seems to be terminated very soon by the system itself. Also coin-hive verhoging is not placed spil a malware and should be safe for users system. I don’t think that you should worry about that at all.

Related movie: Bitcoin Wallet, Lade Mejor Cartera �� Para Bitcoin y Criptomonedas Comisiones Mas Bajas ⬇

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