Protecting Your Coins

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Step 1: Move your Bitcoin off exchanges

 

There are two types of wallets, hot and cold. The key difference between the two wallets is the internet connectivity. Hot wallets stay connected to the internet. This makes transactions fast and easy, but poses security threats. Cold wallets are the optimal choice for storing your Bitcoin. They are not connected to the internet and cannot be hacked. These wallets provide maximum security but also require additional steps to access your Bitcoin. 

 

Think of a cold wallet as a place to store the majority of your Bitcoin, similarly to storing a majority of your funds in a bank vault. Exchanges should act as a Bitcoin debit card for quick small transactions.

 

Step 2: Set up cold wallet

 

Hardware wallets plug into a desktop or computer where you then install the wallets software.

 

It is important you buy the correct hardware wallet.

 

For beginners, we always recommend Trezor. Their devices have large touchscreens making them easy to navigate and their software is the quickest to navigate. 

 

The wallet will give you a step by step setup but there are some crucial topics to reiterate here:

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Step 3: Protect your seed phrase

 

Your seed phrase is arguably the most important aspect of owning Bitcoin. Your seed phrase will be a random assortment of 12 or 24 words that are generated during the wallets initial setup. 

 

If your hardware wallet is ever stolen or lost, your seed phrase allows you to access your Bitcoin on a new device. 

• It is important to note that even Trezor themselves or any other hardware wallet companies will not have access to this seed phrase. At the time of setup, only YOU will know your seed phrase. 

 

By picking a 12 word seed phrase, you are not compromising any security. By using a powerful computer it would still take around 12.1 billion years to brute force your seed phrase. The 12 word seed phrase is more than secure and is recommended for beginners. 

 

As soon as your cold wallet gives you your seed phrase, write it down on paper.

 

Never, never, never write down your seed phrase online or put it anywhere you wouldn't feel comfortable leaving it. No photos, emails, or cloud storage. Never digitize your seed phrase.

 

We recommended storing multiple copies of your seed phrase in multiple locations.

 

If you want an extra layer of security, we highly suggest investing in a metal/titanium seed backup. 

• Trezor offers steel backups that protect your seedphrase in case of a fire or explosion (something a piece of paper might survive) 

• Using a metal tool, your 12/24 word seed phrase can be etched into the metal backup, ensuring your seed phrase is safe. 

 

REMEMBER: Protecting your seedphrase is super important when managing your Bitcoin. Anyone with access to your seedphrase has access to YOUR bitcoin.

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Similarly, if you lose your seedphrase you will lose your Bitcoin forever and it will remain locked in your wallet. 

 

Taking proper precautions and ensuring your seed phrase is safe will lead to your Bitcoin being secure and you will have a peaceful state of mind.

 

Your keys, your Bitcoin. Your mistakes, your losses (this might seem too harsh but it is an important and powerful reminder.)