One can never be paranoid enough when it comes to bitcoin wallet security. Keeping funds safe from harm needs to be the number one priority at any given time. There are several ways to achieve this goal, depending on how paranoid one is about doing so. Some of these measures will involve a lot more efforts than others, but in the end, security is priceless.
4. MULTISIGNATURE WALLET
One of the more common ways to ensure no one can hack your bitcoin wallet and transfer funds out is by using a multisignature solution. As the name suggests, these wallets require multiple signatures from different users before a transaction is approved. It is quite easy to set up among friends or family members, assuming you trust them. Popular wallet solutions, such as Electrum support a multisig option as well. It is by far one of the more convenient ways to keep bitcoin funds secure.
3. THE BRAINWALLET
Although brainwallets are not necessarily considered to be the most secure solution to store bitcoin, the concept offers some merits. A brainwallet allows users to generate a wallet residing in one’s mind. Users need to come up with a mnemonic recovery seed, which has to be both secure and original at the same time. A brainwallet is worth considering for people who do not want to rely on either software or hardware to keep their bitcoins safe.
2. PAPER WALLET STEGANOGRAPHY
A common way to generate an offline bitcoin wallet occurs by creating the so-called paper wallet. Users generate a bitcoin wallet address and its private key on a piece of paper. Rather than storing this private key and wallet in software, connect to the internet, it is kept offline at all times. This adds more security, as the wallet becomes virtually unhackable.
For those users who seek even more protection, steganography can be a great ally. By taking the paper wallet and hiding it within an image, there is no direct trace of a person owning said wallet, to begin with. The concept of steganography has been around for many years now, albeit remains somewhat of a niche trend among bitcoin users. Storing that image is important, albeit it can be hidden in plain sight with relative ease.
1. EXTREME HARDWARE WALLET PRECAUTIONS
For those people who take the security of their bitcoins very seriously, using a hardware wallet is the only viable option. Companies such as CryptoSteel, Ledger, BitLox, TREZOR, and KeepKey have all produced hardware bitcoin wallets aimed at making the process of securely storing funds a lot more convenient. Most users will be up and running within minutes while keeping funds offline at all times.
To take this idea one step further, one could move funds to a hardware wallet and then bury the device or store it in a safe deposit box. Keeping the device away from harm usually means storing it in a location only known to the end user. This may sound rather extreme, but given the current value per BTC, one cannot skimp on security precautions. Furthermore, you can use a combination of these methods to store your funds, making your bitcoins impossible to take.