@ -49,11 +49,11 @@ Over the past three years, as a direct result of bitcoin adoption, we have seen
==== Physical Bitcoin Storage
((("storage", "physical bitcoin storage")))((("paper wallets")))((("wallets", "paper wallets")))Because most users are far more comfortable with physical security than information security, a very effective method for protecting bitcoin is to convert them into physical form. Bitcoin keys are nothing more than long numbers. This means that they can be stored in a physical form, such as printed on paper or etched on a metal coin. Securing the keys then becomes as simple as physically securing the printed copy of the bitcoin keys. A set of bitcoin keys that is printed on paper is called a "paper wallet," and there are many free tools that can be used to create them. I personally keep the vast majority of my bitcoin (99% or more) stored on paper wallets, encrypted with BIP-38, with multiple copies locked in safes. ((("cold storage")))((("storage", "cold storage")))Keeping bitcoin offline is called _cold storage_ and it is one of the most effective security techniques. A cold storage system is one where the keys are generated on an offline system (one never connected to the internet) and stored offline either on paper or on digital media, such as a USB memory stick.
((("storage", "physical bitcoin storage")))((("paper wallets")))((("wallets", "types of", "paper wallets")))((("paper wallets", see="also wallets")))Because most users are far more comfortable with physical security than information security, a very effective method for protecting bitcoin is to convert them into physical form. Bitcoin keys are nothing more than long numbers. This means that they can be stored in a physical form, such as printed on paper or etched on a metal coin. Securing the keys then becomes as simple as physically securing the printed copy of the bitcoin keys. A set of bitcoin keys that is printed on paper is called a "paper wallet," and there are many free tools that can be used to create them. I personally keep the vast majority of my bitcoin (99% or more) stored on paper wallets, encrypted with BIP-38, with multiple copies locked in safes. ((("cold storage")))((("storage", "cold storage")))Keeping bitcoin offline is called _cold storage_ and it is one of the most effective security techniques. A cold storage system is one where the keys are generated on an offline system (one never connected to the internet) and stored offline either on paper or on digital media, such as a USB memory stick.
==== Hardware Wallets
((("Trezor bitcoin hardware wallet")))((("wallets", "hardware wallets")))((("hardware wallets")))In the long term, bitcoin security increasingly will take the form of hardware tamper-proof wallets. Unlike a smartphone or desktop computer, a bitcoin hardware wallet has just one purpose: to hold bitcoin securely. Without general-purpose software to compromise and with limited interfaces, hardware wallets can deliver an almost foolproof level of security to nonexpert users. I expect to see hardware wallets become the predominant method of bitcoin storage. For an example of such a hardware wallet, see the https://trezor.io/[Trezor].
((("Trezor bitcoin hardware wallet")))((("wallets", "types of", "hardware wallets")))((("hardware wallets")))In the long term, bitcoin security increasingly will take the form of hardware tamper-proof wallets. Unlike a smartphone or desktop computer, a bitcoin hardware wallet has just one purpose: to hold bitcoin securely. Without general-purpose software to compromise and with limited interfaces, hardware wallets can deliver an almost foolproof level of security to nonexpert users. I expect to see hardware wallets become the predominant method of bitcoin storage. For an example of such a hardware wallet, see the https://trezor.io/[Trezor].
==== Balancing Risk
@ -65,7 +65,7 @@ Would you carry your entire net worth in cash in your wallet? Most people would
==== Multisig and Governance
((("multisig addresses")))((("adresses", "multisig addresses")))Whenever a company or individual stores large amounts of bitcoin, they should consider using a multisignature bitcoin address. Multisignature addresses secure funds by requiring more than one signature to make a payment. The signing keys should be stored in a number of different locations and under the control of different people. In a corporate environment, for example, the keys should be generated independently and held by several company executives, to ensure no single person can compromise the funds. Multisignature addresses can also offer redundancy, where a single person holds several keys that are stored in different locations.
((("multisig addresses")))((("addresses", "multisig addresses")))Whenever a company or individual stores large amounts of bitcoin, they should consider using a multisignature bitcoin address. Multisignature addresses secure funds by requiring more than one signature to make a payment. The signing keys should be stored in a number of different locations and under the control of different people. In a corporate environment, for example, the keys should be generated independently and held by several company executives, to ensure no single person can compromise the funds. Multisignature addresses can also offer redundancy, where a single person holds several keys that are stored in different locations.
judymcconville@roadrunner.com
7 years ago