What are the best practices for managing private keys in bitcoin self custody?

7 answers

• Mar 22, 2022 · 3 years ago
  One of the best practices for managing private keys in bitcoin self custody is to use a hardware wallet. Hardware wallets are physical devices that store your private keys offline, providing an extra layer of security. They are designed to protect your private keys from malware and hackers. By keeping your private keys offline, you reduce the risk of them being compromised. Additionally, hardware wallets often have built-in features such as PIN codes and encryption to further protect your keys.
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• Mar 22, 2022 · 3 years ago
  Another important practice is to regularly backup your private keys. This can be done by creating a backup of your wallet's seed phrase or by exporting the private keys themselves. It's crucial to store these backups in a secure location, such as a safe deposit box or a hardware wallet. By having backups, you can recover your funds in case your primary device is lost or damaged.
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• Mar 22, 2022 · 3 years ago
  At BYDFi, we recommend using a multi-signature setup for self custody. This involves splitting your private keys across multiple devices or individuals, requiring a certain number of signatures to authorize transactions. This adds an extra layer of security, as an attacker would need to compromise multiple devices or individuals to gain access to your funds. It also provides redundancy in case one of the devices or individuals becomes unavailable.
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• Mar 22, 2022 · 3 years ago
  When managing private keys in bitcoin self custody, it's important to be cautious of phishing attacks. Always double-check the URLs and ensure you are visiting legitimate websites. Avoid clicking on suspicious links or downloading files from unknown sources. Additionally, enable two-factor authentication (2FA) whenever possible to add an extra layer of protection.
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• Mar 22, 2022 · 3 years ago
  A best practice for managing private keys in bitcoin self custody is to regularly update your software and firmware. Developers often release security patches and updates to address vulnerabilities. By keeping your software and firmware up to date, you reduce the risk of potential exploits.
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• Mar 22, 2022 · 3 years ago
  It's also recommended to use a separate, dedicated device for self custody. Avoid using the same device for everyday browsing and bitcoin transactions. By using a dedicated device, you minimize the risk of exposing your private keys to potential malware or keyloggers.
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• Mar 22, 2022 · 3 years ago
  Lastly, consider using a passphrase in addition to your private keys. A passphrase is an extra layer of security that adds complexity to your private key. It's a string of characters that you need to enter along with your private key to access your funds. Make sure to choose a strong passphrase and store it securely.
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