Self-Custody for Large Bitcoin Holdings: A Plain Guide | The Coin Shack
Self-custody for larger Bitcoin holdings
When you hold your own keys, nobody can freeze or lose your Bitcoin for you, but the responsibility is yours. For larger amounts, a little planning removes most of the risk.
TL;DR
- Use a hardware wallet bought new, straight from the maker.
- Write the recovery words on paper or metal and keep two copies in separate safe places. Never type them into a website.
- For larger amounts, use multi-signature (for example 2 of 3 keys).
- Test first: send a small amount and practise restoring the wallet before moving everything.
Use a hardware wallet
A hardware wallet keeps your keys on a small device that never exposes them to your computer or phone. Buy it directly from the maker, never second-hand, and set it up yourself.
Back up the recovery words properly
- Write the recovery words on paper or metal, never in a photo, email or cloud note.
- Store copies in two separate secure places, such as a home safe and a bank safety deposit box.
- Never type them into a website. No legitimate company, including us, will ever ask for them.
Consider multi-signature
With multi-signature, moving the Bitcoin needs, for example, two of three keys. Losing one key is not a disaster, and a thief needs more than one. It is the setup most families and businesses choose for larger amounts.
Test before you trust
Send a small amount first and practise restoring the wallet from the backup. It is much better to find a mistake with $50 than with your full holding.
Help setting it up
Our OTC Desk clients get hands-on help choosing and setting up hardware and multi-signature wallets, so the Bitcoin goes straight from the trade into a setup you control.
Questions
Is a hardware wallet enough on its own?
It is a big step up from a phone wallet. For larger amounts, multi-signature adds protection against losing a single device or backup.
What if I lose my hardware wallet?
You can restore your Bitcoin on a new device with your recovery words. That is why the backup matters most.
Will you ever ask for my recovery words?
Never. Anyone who asks for them is trying to steal your Bitcoin.
