What are the worst ways to store bitcoin?

"Hi, Andreas, "what are the worst practices to store Bitcoin?" I love this question because I often get asked the opposite, which is, what are the best practices to store Bitcoin, and I've talked about that extensively, so, thank you Enrico for giving me the opportunity. What are the worst practices to store Bitcoin?

Worst place to store bitcoin

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. Then, in that case, you are at huge risk of losing that bitcoin. It can be stolen by the exchange, it can be stolen by someone in the exchange, it can be stolen from the exchange. It can be stolen when someone sniffs your password from your browser, using a Trojan, it can be stolen when someone SIM jacks your phone, or if you don't have two-factor authentication. Or, or, or, so many different ways it can be stolen, and you will have absolutely no recourse, so if it is stolen it's like, whoops! Sorry, gone.

2nd worst practice: Non-custodial, web wallet, without 2FA

Alright, so if a custodial, no two-factor authentication web interface is the worst, the second worst would be non-custodial, no two-factor authentication, web-based, which would include various web wallets like blockchain.info or blockchain.com as it's called today. 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.

3rd worst practice: Poorly secured desktop computer

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.

The best ways to store bitcoin

And I think I'll stop there, because from there it starts getting better, 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. Hot colds, multi-sig, and multi-factor multi-sig and things like that, so it gets better from there. The first three that I gave you, those are almost guaranteed to make you lose your money. (pensive acoustic music) If you enjoyed this video, please subscribe, like and share. All my work is shared for free. So if you want to support it, join me on Patreon.