TL;DR: Owning bitcoin requires proper storage to avoid loss from scams, theft, or mishandling. Good storage methods involve using metal imprints for protection against damage. Your responsibility is to ensure the private key is not lost and remains unseen by others. Understanding these concepts and taking them seriously is essential for keeping your bitcoin investment secure.
If you own any bitcoin, you probably already understand that it will one day become the most coveted asset in the world. To protect your investment, it's essential to learn how to store your bitcoin properly. This guide is divided into an introduction to key concepts, descriptions of dos and dont's, and an appendix with product examples.
First, it is crucial to understand that your bitcoin is NOT stored inside your wallet, or even on your hardware wallet (signing device). Instead, everybody's bitcoin is stored on the mass storage devices (disks or SSDs) of thousands of Bitcoin nodes worldwide. The ability to spend a specific coin is limited by the capacity to create a valid signature, which requires the private key. Whoever controls the private key controls the coin. This is the technical basis for the expression: "not your keys, not your coins."
We will discuss private keys and their storage formats in the next article. For now, just follow along.
All you need is the private key, which you must keep extremely secure to prevent loss or theft. If you lose your key, there's no way to spend or claim ownership of your bitcoin. If your key is leaked, your bitcoin is now vulnerable to theft.
There are many ways to store your key, with most good options involving some kind of metal thing in which you imprint your key onto. This offers protection against most disaster events that involve water (like during a boating accident), fire, chemicals, and physical force.
Remember, anyone who knows your private key can spend your bitcoin. Your responsibility is twofold: prevent losing your private key and ensure no one ever sees or records it. Achieving this is not trivial, so take the information in this guide seriously and follow each step carefully.