Bitcoin and blockchain expert Andreas M. Antonopoulos is laying out the three worst ways anyone could store their Bitcoin.
Antonopoulos says there are a number of easily avoidable mistakes that are guaranteed to make investors lose their BTC.
“I would say the absolute worst practice to store Bitcoin is, to store it on a custodial service, meaning they have the keys and you do not, that is accessed primarily through a web interface, and does not have two-factor authentication. I would put that at the absolute top of my list as the worst ever way to store Bitcoin.
If you store Bitcoin on a custodial service, you don’t have the keys. And it’s accessed through a web interface, which means that you have to type a username and password into a browser, which may or may not be at the correct site, which may or may not be on a computer with a key logger, or a Trojan.
And there’s no opportunity for two-factor authentication, or, the two-factor authentication is laughingly simple, like SMS-based text message two-factor authentication, which at this point in the internet security history it is criminally negligent, to have SMS as your two-factor authentication, which is why it’s preferred by all of the banks.”
Antonopoulos says the mistake people make in storing their Bitcoin is storing them in non-custodial wallets. These services typically allow users to access their keys, but remain vulnerable to phishing attacks.
“The second worst would be non-custodial, no two-factor authentication, web-based [wallets]… where, again, phishing attacks are the primary way that that wallet is stolen. And it happens so, so often. So again, that’s a very bad idea. You need to add two-factor authentication, or preferably move your coins somewhere else.”
The last terrible place to store BTC, says Antonopolous, is on a desktop application.
“[The] third-worst practice to store Bitcoin is on a very poorly-secured desktop computer using some kind of desktop application, in a hot wallet with very little in terms of password. But even if you have a password, if it’s on a desktop operating system, like I dunno, Windows 7 that hasn’t been patched in years. And, even if you have a password, it can easily be sniffed by a Trojan or a key logger that’s installed on that computer.
And so, when you have an operating system like that, the question is not, ‘Do I have a virus?’, but ‘How many and what varieties of viruses do I have, and how much of my information are they currently leaking?’ So, that would be my third worst option.”
But it’s not all doom and gloom, says Antonopoulos – there are still secure ways to store Bitcoin.
“So for example, mobile device applications, hot wallets on mobile devices, where you control the keys with a mnemonic, generally pretty robust, because the mobile operating system is robust.
And then we start getting into hardware wallets, and various forms of cold storage, multi-sig wallets.”
I
Check Price ActionDon't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Tithi Luadthong
