The Best Ways To Secure Your Bitcoin

As Bitcoin and cryptocurrencies continue to gain mainstream attention—appearing in everything from rap songs to films and even being adopted by national governments and major corporations—the question remains: Is crypto too complex for the average user to understand?

The simple answer is no. People have embraced Bitcoin and other digital assets, finding ways to not only buy and sell but also securely store them. While some prefer using custodial exchanges, many users store their digital assets on secure mobile phones or hardware wallets without issue. It’s evident that users are figuring out the basics of digital asset security.

The real challenge, perhaps, is not whether crypto is too complex, but whether our global technical education is adequate for the digital age. Although older generations may remain skeptical and prefer traditional financial systems like banks and ETFs (exchange-traded funds), younger generations—digital natives—are much more comfortable with the concept of digital assets. The future is digital, and as the world evolves, the need for accessible technical education, particularly for the unbanked, grows ever more important.

Storing Bitcoin Doesn’t Have to Be Complicated

There are many ways to store Bitcoin, from highly complex solutions like Faraday cages used by large exchanges to protect against radio frequency (RF) attacks, to simpler options like storing assets on a mobile phone or laptop. The key is finding the right balance that works for you.

Each individual or entity has different risk profiles and preferences when it comes to storing digital assets. For some, increased complexity might lead to mistakes, while for others, basic storage methods are sufficient. It’s crucial to assess your own level of technical expertise and risks, and find a storage solution that matches your needs. Remember, overly complex setups can lead to mistakes, and using a custodial exchange might defeat Bitcoin's core principle of self-custody.

Backing Up a Non-Custodial Wallet

One of the most important aspects of storing Bitcoin in a non-custodial wallet (whether hot or cold) is ensuring that your backup is secure. Simple methods, such as writing down a seed phrase on paper and storing it in a safe, are common. However, extra precautions like laminating the paper or placing it in a tamper-evident envelope can protect against environmental damage or theft.

In fact, natural disasters like fire, floods, or pests such as termites are often a bigger threat than theft when it comes to paper backups. It's important to consider these factors when deciding where and how to store your wallet backups.

Most attacks on cold storage devices focus on physical access to the device, but even then, most are unsuccessful. The biggest risk for users is improperly backing up their hardware wallet or making instructions too complex, leading to potential loss of assets.

Can I Use a Cell Phone to Store Bitcoin?

If you don’t have access to a hardware wallet, a smartphone with a secure element is a viable alternative. Modern mobile devices typically come equipped with security chips that isolate sensitive information, making them more secure than a desktop or laptop. Additionally, mobile phones often have built-in security features such as biometric authentication and PIN codes.

By installing a BIP39-compatible mobile wallet—backed by a mnemonic seed phrase—you can ensure both ease of access and security for your Bitcoin. BIP39 is an open-source standard that helps users securely create and back up wallets with a mnemonic phrase.

If a mobile device isn’t an option, a custodial exchange might be more secure than storing Bitcoin on a desktop, given the lower security of most personal computers.

The Future of Bitcoin Security

Looking ahead, we may see the emergence of more sophisticated methods for securing Bitcoin, such as social sharing mechanisms. In this approach, a mnemonic phrase would be split into multiple "shards," distributed among trusted friends or family members. By creating a quorum system (e.g., three of fifteen shards required to recover the wallet), users could ensure that their assets are protected even if they lose access to their original wallet.

This type of system could rely on a trusted network of guardians, making Bitcoin security a more community-based effort. In some cases, these mnemonic phrases could even be engraved on steel for long-term durability.

Conclusion

Ultimately, the best way to secure your Bitcoin depends on your individual risk profile and technical expertise. Whether you opt for a simple mobile wallet, a hardware device, or a more complex cold storage solution, it’s important to strike the right balance between security and accessibility. As the industry continues to evolve, so too will the tools and techniques available to help secure your digital assets.

Kadan Stadelmann, CTO of Komodo Platform and an expert in operations security, has been working in the blockchain space since 2011 and joined Komodo in 2016. His insights and experience offer valuable guidance for those navigating the complexities of digital asset security.