How to keep your cryptocurrencies safe

The safest way to store your crypto for the long term is in a “cold storage” wallet. This is a completely offline storage method that is unable to be hacked.

This is different from a “hot” wallet, which is a bit of software that runs on your phone or computer and lets you send or transfer currencies around. You can read about the different types of wallets here.

If you’ve ordered a Portfolio from us – this is exactly what we send you when we deliver your order.

A cold storage wallet is made of what’s called a “keypair”. The keypair is two pieces of data – the address where you can send crypto, and the private key that lets you access that address.

As you might guess by the name, the address part is public information that anyone can know, and the private key needs to stay private.

There are many good apps for storing your wallet data, but the one I’m going to suggest is called KeePass. This is an open source app that has been around since 2003 and is very well regarded.

As well as storing your cold storage keypairs, you can also use KeePass to store the passwords for the different websites and hot wallets that you use. It’s a very useful bit of software!

PLEASE NOTE: There is always the possibility that a security vulnerability is found in KeePass. If this happens, then you may be exposed to risk. I am personally happy to trust my data with KeePass, but this is your decision to make. And always make sure that you keep your software up-to-date.

Getting Started

Before you do anything else, you should run a full malware scan of your computer. This is to ensure that your computer is in a healthy condition before you do any of the sensitive tasks in the rest of this article.

Download the free version of MalwareByes and let it run a full scan to search for any security issues or viruses on your computer.

Creating your Master Password

Before we can set up your secure crypto storage, let’s talk about the most important thing of all – your master password. This is the master key that opens up your database and gives you access to all your cold storage wallets.

Making a good password is actually a lot easier than you think. If you follow a few simple rules, you’ll end up with a password that’s easy to remember, but impossible for a computer to crack.

Posted with permission from XKCD

You don’t need to have a jumble of random characters, as long as you have a long password that follows a these simple rules:

Rule 1:

Make it long. You want a password that’s at least 20 letters.

Rule 2:

Never use a phrase. By that, I mean don’t use something that has ever appeared in a book or on a website.

“It’s going to be a great day” is nice and long, but it’s also a phrase.

“bread submarine wellington yellow” is most definitely not a phrase!

Rule 3:

Have a number and some punctuation. This increases the “search space” of the password, which makes it much, much harder to crack.

An example of a great password

For my password, I’m going to combine 5 things:

  1. A number that has significance to me – in this case the house number where I grew up.
  2. Something I like to eat.
  3. The name of a road where I’ve lived.
  4. A country I like.
  5. And a bit of punctuation.

The password I came up with is 19ChocolateKoniniNepal;

Because these words are random to each other and will never appear together like this in a phrase or a book, they make an excellent password. You could put all the computers in the world together, and they would never be able to brute force their way through this password.

Because they’re things that have significance to me, they’re easy for me to remember. And because they’re normal words… they’re really easy to type!

You don’t need to put the things in this order. You could put your numbers in the middle, or some numbers at the start and the end – it’s entirely up to you.

Now it’s Your Turn

Create a password similar to how I did it above and write it down.

Write it down you say??? But isn’t that unsafe? ?

Well yes it is, but we’re only going to keep this piece of paper for a week or two. As long as nobody else sees it, you’re totally fine.

I want you to make absolutely sure that you’ve got your password stuck into your memory before you tear that bit of paper up and burn it.

KeePass Setup

You can download KeePass for all major platforms, but I’m going to be using the Windows version in the screenshots below.

Download a version of KeePass using the links on their official site: https://keepass.info/download.html

Once you’ve installed KeePass and opened it up, you’ll be asked to choose a location for your database.

You can save your database wherever you like. I put mine into my Dropbox. Since it’s highly encrypted with a great password, it doesn’t matter if somebody else gets their hands on it. And the benefit of it being in Dropbox is that it’s always backed up in the cloud, so if my laptop dies, I haven’t lost my KeePass file.

You can also send yourself a copy every now and then through your email so that you’ve got some backups that way.

Once you’ve saved your database in a location you like, put your master password in and click OK.

Creating a Cold Storage wallet

If you’ve ordered a Portfolio from us, then you’re already done – we’ve made it for you! You can continue straight on to the next step.

If you want to create a blank wallet for yourself, you’ll need to use what’s called a “paper wallet generator”.

For Bitcoin, I can recommend the instructions from Bitcoin.com.

For Ethereum, I can recommend MyEtherWallet. Once you create your wallet, you just need to keep the address and unencrypted private key.

For other coins, you’ll need to do your research, or just make things easy on yourself and let us create one for you.

Adding your Wallet Data

Once you get into Keepass, you’ll be greeted with some default template data – which you can delete at your leisure.

To set up your first wallet entry, click the Add Entry button:

 

If you are storing a cold storage keypair, then put the coin name in the Title field, your public address into the User name field, and your private key into the Password field, and click OK:

If you are storing the password to a hot wallet (for example Exodus, Daedalus, Coinomi, etc), then you can put the Title as the wallet name, and the Password as the wallet password.

Finally, click the Save button to save your database, and you’re done. You’ve successfully added your first wallet entry into your own fully-encrypted crypto vault!

You might want to add some extra data into the Notes field, like the current balance or what price you originally bought the coins for.

What next?

First of all, test it!

Close your database and open it up again. Did your password work? Is your cold storage entry there?

If so, then you’re good to keep going ,you can create entries for all your different coins.

You might also want to start putting other useful bits of data into KeePass that you want to store but also want to have encrypted. In my KeePass I have all the passwords for every website I visit. I also have my banking information, and my credit card numbers.

The final thing you want to do is make sure that you open your KeePass and type in your password at least a couple of times a day for the first two weeks. Since you’re putting actual money in these cold wallets, you do not want to forget it!

Once you’re absolutely sure that you’re never going to forget it – rip up that note with your password and destroy it.

Now your crypto is as safe as it can possibly be 🙂

Adding more crypto into your cold wallet

You can send more coins into your cold storage wallets by pasting the address into our order form. You don’t have to do anything special – we’ll deliver directly into your cold storage wallet.

Make sure that you only copy your address (the part that’s in the User name field). You don’t want to be copying and pasting your private key!!

Remember that as always, you can only send crypto to that specific type of address. You can’t send Ripple to a Bitcoin address – you can only send Bitcoin to a Bitcoin address.

Getting your crypto out of Cold Storage

When you want to eventually spend one of your cold wallets or move it to somewhere else, you just need to import it back into a hot wallet. You can follow our instructions here to do just that.

And that’s it!

I hope you’ve enjoyed this little guide.

If you have any comments or suggestions, jump on our forum thread and join the conversation.