Sick of seeing stories of people losing their Bitcoin to scams and hacks.
Before you self-custody make sure you understand these rules to avoid losing your hard-earned Bitcoin (until then just leave it on the exchange):
1. Buy a reputable hardware wallet. Mobile wallets and paper wallet generators are easier to hack. Attackers who find your seed can steal your Bitcoin.
2. Verify your wallet is authentic. Buy directly from the manufacturer and check for tampering. Roll dice to generate the seed yourself.
3. Backup all recovery information in a secure location. If your wallet dies or you forget a passphrase make sure you can recover your Bitcoin. Many people use steel backups.
4. Provide recovery instructions to your inheritors. Write down instructions in a will or dead-man’s switch including the location of your seed and passphrase backups.
5. Practice receiving, sending, and recovery with your wallet. Receive and send a small amount of Bitcoin to the wallet. Wipe your wallet’s seed and see if you can restore it.
6. Always check the address on your hardware wallet when sending or receiving. Hackers can replace addresses on your computer with their own, so double-check on your device.
7. Never enter your seed on a computer or phone. An app or website might transmit your seed to a scammer who steals all your Bitcoin. Only enter your seed into a hardware wallet.
8. Only send Bitcoin to people you know are authentic. Any deal that seems too good to be true is probably a scam. There is no way to undo a transaction.
9. Double-check you own Bitcoin. Don’t trust a website to tell you that you’ve received Bitcoin, double-check on a block explorer using Tor or your own node.
10. Determine the level of privacy you need. Owning Bitcoin makes you a target for extortion or theft. Keep your Bitcoin as private as you can.
. . .
At first it may seem like a lot to remember, especially if you are new to Bitcoin, but it only takes a few hours to set up a wallet. After you move Bitcoin into your wallet there is nothing left for you to worry about until you need to move it again. Your Bitcoin will be safe from bad custodians, hackers, fraudsters, and accidents.
Once you have mastered using your hardware wallet, you can decide whether you want to add multisig to your security. Multisig adds more complexity, but protects you against rare events which I recommend if you store a significant amount of your savings.
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