True Bitcoin Cold Storage!
Today we will discuss best practices for Bitcoin cold storage using the Electrum wallet.
Large or small amounts, we prefer using the electrum wallet. We will show you how to create TRUE cold storage, meaning it is impossible for any hacker to steal your Bitcoins. In fact, your Bitcoins will technically be ‘hanging in the blockchain’, never touching your actual electrum wallet. This is the most secure Bitcoin cold storage possible.
First you will need to download:
- Truecrypt 7.1a
- File Eraser
You also need:
- Three or more USB flash drives
- A Windows 7 PC
Ideally, you will need a computer running windows 7 which has never been online. In fact, for this type of thing, we recommend you buy a cheap, used Lenovo laptop for about $200 on Amazon and remove the wireless card. It is therefore impossible for this computer to ever get online.
BITCOIN COLD STORAGE WITH ELECTRUM
STEP ONE: The first thing you need to do is download Truecrypt 7.1a and encrypt at least 4 flash drives using a secure password (at least 100 bits of entropy). Learn how to choose a secure password
STEP TWO: Create an electrum wallet on an air-gapped Windows 7 laptop, preferably a computer which has NEVER been online (therefore it cannot possibly be hosting a wallet stealer). Save this electrum wallet and the seed and the private keys to your encrypted flash drives.
STEP THREE: Save the ‘RECEIVE’ address anywhere you want on your home computer.
STEP FOUR: Hide the flash drive in different locations; give one to your dad, bury one in your garden in a waterproof storage case, etc.
STEP FIVE: Send bitcoin to the RECEIVE address for your cold storage wallet.
STEP SIX: Use a secure file shredder to erase the wallet files on the air-gapped computer OR (better yet!) remove the hard drive, smash it, and dispose of it.
Note that it is IMPOSSIBLE for anyone to steal your Bitcoins because your private keys have never touched the internet!
The Bitcoins you send to this wallet are ‘hanging’ in the blockchain. There is absolutely no way for an attacker to steal your coins. Enjoy the peace of mind!