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Common Mistakes in Storing Bitcoin

Common Mistakes in Storing Bitcoin

Feb 29, 2024
Bitcoin Basics

Common Mistakes in Storing Bitcoin

The secure storage of private keys is a critical aspect of Bitcoin ownership. Nonetheless, errors in the storage process can lead to significant security vulnerabilities, potentially resulting in the loss of assets. This article examines three common mistakes Bitcoin holders make regarding storage and how to avoid them.

Mistake 1: Using Bitcoin Paper Wallets

Bitcoin paper wallets have traditionally been a form of cold storage, meaning they are kept offline. They consist of a printed piece of paper containing a Bitcoin address and a private key for transaction signing. However, their use has several drawbacks:

  • Privacy Risks: Reusing the same Bitcoin address compromises privacy by making transaction patterns more visible on the blockchain.
  • Security Flaws: Paper wallet generators, particularly those online, may be compromised or insufficient in producing truly random private keys.
  • Malware Exposure: Computers used to generate paper wallets could harbor malware that reads or uploads unencrypted wallet data.
  • Printer Vulnerabilities: Printers, especially when connected to the internet, can be a vector for malware interception of private keys.
Bitcoin Paper Wallet is the Key Tool for Investors | CRYPTOR TRUST

Instead of paper wallets, hardware wallets are recommended. These devices keep private keys isolated within a secure element, allowing for transactions to be signed internally without exposing keys to the internet.

Mistake 2: Picking Your Own Recovery Seed

A recovery seed is a series of 12 or 24 words generated by a cryptographic algorithm, which represents a wallet's master private key. Selecting your own seed, rather than using a true random number generator, can have serious consequences:

  • Predictability: User-generated seeds are rarely random enough, making them easier targets for theft.
  • BIP39 Word List: The standard list of 2048 words used for seed generation should not be manually selected from, as doing so undermines the seed's randomness.

To maintain security, it is vital to allow a reputable hardware wallet to generate the recovery seed.

Mistake 3: Trusting Insecure Support Channels

Seeking assistance through online platforms like Telegram can expose users to scammers posing as customer support:

  • Impersonation: Scammers might claim to be support staff and ask for sensitive information, including recovery seeds.
  • Information Leakage: Sharing a recovery seed, even with what seems like a legitimate support agent, can result in immediate asset theft.

Genuine customer support for Bitcoin-related products will never request a user's recovery seed. Users must exercise caution and avoid sharing sensitive information on any online platform.


In conclusion, the proper storage of Bitcoin is non-trivial and fraught with potential security issues. Paper wallets are outdated and risky due to multiple vulnerabilities. Choosing your own recovery seed bypasses the essential randomness required for security. Trusting unofficial support channels can lead to scams and theft. Instead, hardware wallets and adherence to best security practices are the recommended means of safeguarding one's Bitcoin. Users are encouraged to educate themselves on secure storage methods and remain vigilant against common pitfalls in the cryptocurrency space.


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