How to Store Bitcoin Offline in Cold Storage

Bitcoin prices have been breaking their own records over the past few months, with the cryptocurrency climbing to over $14,000 (roughly Rs. 9 lakh) this week from less than $800 (roughly Rs. 51,600) in the same period last year. This unprecedented growth—almost 10 times its value since early 2017—has officially thrust Bitcoin into mainstream attention.

While debate over whether Bitcoin is a bubble still comes from all sides, it’s clear that those with large stakes in Bitcoin need to be safer with their digital investments than ever before. After all, there is real money involved. Bitcoin wallets have been hacked many times in the past, so it’s worth taking extra steps to protect your funds.

The most convenient way to store Bitcoin is to use an online wallet, which allows you to quickly transfer funds in and out of the wallet, or convert Bitcoin to alternative cryptocurrencies such as Ethereum, Monero, Litecoin, and more. But the safest option is called “cold storage,” which stores your Bitcoins offline, away from any internet access. This is especially important if you own a large amount of Bitcoin.

Here’s how to set up cold storage for your Bitcoin wallet:

1. Paper wallet
The easiest way to use Bitcoin offline is with paper and a printer. Yes, really. You will also need a website that allows you to create an offline Bitcoin address, such as Bitcoin.com or Bitaddress.org. Please follow the steps below to create a Bitcoin paper wallet:

1. Go to the Bitcoin.com paper wallet or Bitaddress.org page.
2. Save the page locally to your computer as an HTML file.
3. Next, close the page and disconnect your computer from the Internet.
4. Open the saved Bitcoin.com paper wallet or Bitaddress.org local version.
5. Follow the instructions on the page to create a new Bitcoin address.
6. After you get a pair of keys and QR code, print this page. Make sure your printer is not connected to the Internet for added security.
7. You can now transfer Bitcoin from another online wallet using your new public address/QR code.

The printed page is the most valuable document of your Bitcoin investment. Ideally, you should store printed pages in a waterproof and fireproof container, such as a safe. If that’s not an option, create multiple versions of it and give it to a trusted family member for safekeeping in case your version gets corrupted. You can also laminate pages for protection.

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2. Bit key
While taking your computer and printer offline is a good security measure, it’s not as secure as using a clean operating system. BitKey is basically a free bootable Linux distribution that you can write to a USB drive or CD-ROM. Plus, it runs live from computer memory (RAM), so you can eject the drive/disc after running it.

BitKey comes pre-installed with several software options: Electrum Bitcoin client, WarpWallet (more on that later), and Bitcoin paper wallets, among others. It also has built-in network, printer, and wireless managers so you can use it for all necessary Bitcoin purposes. Creating a paper wallet using BitKey is more secure than using your existing operating system.

1. Here’s how to create a bootable USB/CD using BitKey:
2. Go to the BitKey website to download the operating system image.
3. click download button and get the 64-bit version.
4. Choose between USB and CD-ROM. The latter are more secure as they are read-only by default. For USB flash drives that are not write-protected, it is recommended to remove them after booting.
5. Burn the CD using your favorite program, or use a utility like UNetbootin to write the BitKey ISO to a USB drive.
6. Boot into BitKey using your computer’s Advanced Boot feature (F8-F12 varies depending on the motherboard manufacturer).

If the startup is successful, you can use BitKey to create a paper wallet or even use the Electrum client to create an offline wallet. BitKey offers three operating modes—cold offline, cold online, and hot online—that define whether the computer is offline and air-gapped.

It also determines how convenient the process is. In BitKey, choose Cold Offline for maximum security and minimum convenience, or Hot Online for less security and more convenience. However, you can only prepare transactions in a cold online state. Please click on the three links to find out which method works best for you.

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3.Warp Wallet
For the more paranoid, a more secure method of storing Bitcoin involves something called a brain wallet, which generates an address by using a remembered password. WarpWallet goes a step further with “salts,” which are additional data, such as your email address, that forces attackers to target you individually rather than casting a wide net.

This way, your private keys aren’t actually stored anywhere physically or digitally, but in your head (read: brain). This means you don’t have to keep any documents, and as long as you don’t forget your password, most people recommend leaving cryptic notes around the house.

Due to the complexity and security of this method, it has been described as how Jason Bourne stores his Bitcoins. Regardless, if you think this is the way to go, follow these steps to get started with WarpWallet:

1. Go to the WarpWallet website and note the SHA-256 sum in the URL.
2. Save the page locally to your computer as an HTML file, then transfer it to a USB drive.
3. Launch a bootable Linux distribution, such as BitKey above.
4. Copy the HTML file to BitKey.
5. Open sha256sum warp.html to verify that the SHA-256 sum matches the sum from step 1.
6. Open HTML files as local files in Chrome/Firefox.
7. Generate passwords suitable for entropy algorithms, such as One Shall Pass. Anything with 58 bits or more of entropy is very secure.
8. Use the password from the HTML file and your email address as the “salt”.
9. Use your mobile phone to scan the public key QR code and transfer it to a device with Internet access.
10. Turn off BitKey.

You can now transfer Bitcoin from your online wallet/exchange to your WarpWallet address. You don’t have to store your private key anywhere as it can be regenerated through WarpWallet’s website with the help of your password and “salt”. Just don’t forget any details, or your Bitcoins (and the money invested in them) will be gone forever.

These are the most popular ways to store Bitcoin offline. If you want something more convenient than BitKey and WarpWallet, and are willing to spend the money, consider hardware wallet options such as TREZOR. They come at a high price – TREZOR costs over Rs. 8,500, including shipping to India – but they’re easier to use than booting a Linux distro.

For more tutorials, head to our how-to section.

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