The best way to secure your bitcoin is to take control of your private keys in a way that's safe and secure.
Riskiest: Storing on an exchange
While it's easy to leave your bitcoin on the exchange you purchased it on, it's historically been the most risky way to store bitcoin.
Cryptocurrency exchanges hold your bitcoin in their custody. Because not all exchanges have the best security practices, bitcoin that you store on an exchange is always at a high level of risk of theft or compromise.
The consensus among bitcoin and security experts is that users should have custody of their own private keys to access their bitcoin, rather than entrust them to centralized services.
After all, bitcoin itself is a distributed network with no central point of failure. To entrust your bitcoin to a central point of failure (such as an exchange) can be viewed as antithetical to the very nature of bitcoin!
More secure: Hardware devices
A significant step up in bitcoin security is to use one of many dedicated hardware devices available to consumers. A hardware device is a small electronic device that holds the private keys to your bitcoin on a small computer chip inside the device. Since the device itself never connects to the internet, it greatly reduces your chance of theft. It does not, however, protect against physical theft.
Most secure: Multisig
Multisig (short for "multisignature") is a private key security technique that requires a certain number of signatures (e.g., three of five signatures) in order to send funds.
Multisig security, when done well, is nuclear-level security for your bitcoin. It offers all of the protections of hardware devices, with the added security of mitigating:
- In person attacks
- Hacking/phishing
- Natural disaster
- Confiscation/seizure
- Accidental loss
Multisig security can be complicated to set up. At Casa, we take the complication out of multisig and make it a simple and easy experience that will let you sleep soundly knowing your bitcoin are safe.
You can see our options for multisig here:
If you have any questions, you can also email us at [email protected].
