Bitcoin Storage – The ZeroTrust System

This article explains how to improve your bitcoin storage, step by step. I do think the early steps/levels should not be skipped (except level 1), because there is something to learn from each step. For example, people who go straight to a hardware wallet, often don’t understand the function of private keys and are confused about restoring wallets, and how transactions work. They are at risk of getting scammed, and not taking care of their seed phrases properly. They may also succumb to the illusion that having a hardware wallet means you can’t lose your bitcoin. They also tend to not understand the purpose of the hardware wallet (to keep your private keys off the computer).

People always start with level 1, and many will hopefully progress to level 2. Below, I explain the multiple steps to eventually get you level 8.

Take a look, and if you need individual help, it’s available.

Level 1

Coins on the exchange. For complete beginners who don’t know what they are doing, too lazy to learn or care, and no-one to help them, they can buy bitcoin from an exchange and let the exchange hold their coins. Hopefully they will move to level 2 quickly as they accumulate more.

Level 2

Mobile phone or desktop “hot wallet” (i.e. wallet connected to the internet).

Good exposure for those new to Bitcoin – it helps them appreciate what holding your own bitcoin actually is. Easy to demonstrate a transaction back and forth (exchange to wallet, then wallet to exchange). It is often eye opening for someone new to Bitcoin. Creating, deleting, and restoring a hot wallet is also educational. Keeping small amounts on this wallet is ok.

For an experienced user, a mobile hot wallet is ok for small amounts. It can be used for small purchases, donations, or demonstration to new Bitcoiners. The bulk of coins should be in cold storage though.

Instructions: (Single Signature Storage)

I do recommend understanding how Electrum Desktop Wallet works. It has several idiosyncrasies which turn people off, but once they are understood, it works beautifully and is a very powerful solution. You can learn a lot about bitcoin using this wallet. I recommend learning it with a small amount of bitcoin before or at the same time as progressing to level 3. Here is a page where I store links to videos I and others have made about Electrum Desktop Wallet. Don’t be scared, take your time and learn this software.

Level 3

Single signature hardware wallet.

I recommend the ColdCard. Trezor may be OK (I haven’t tried it), but those in the know recommend ColdCard over Trezor or Ledger. See question 4 in the Q&A for my overview of hardware wallets.

ColdCard documentation is detailed and very good, so I won’t need to repeat it.

Level 4

At some point, you should run your own node, and connect your wallet to your node. However, because your old wallets have already sent queries to public Bitcoin nodes (and lost privacy), you should start a new wallet and send funds to it, and only ever connect the new wallet to your own node from then on. You may wish to get to Level 6 before you move your funds to your ultimate safe and private wallet.

Level 5

Make your own air-gapped computer, and use it to make your own private key with dice. If that’s too fiddly, at least do it the simplified way which is almost as good. Import the new key into your hardware wallet, instead of letting the hardware wallet make the key for you. Do not trust.

Level 6

Multisignature wallet, with air-gapped computer made in level 5, with or without hardware wallet(s). At this stage, you should make your keyes with dice, explained in level 5. Multisignature is vastly safer than single signature. It also is harder. Do not be put off or scared. At least start making one, and only put significant funds in it once you are comfortable you know enough. It also helps with inheritance planning.

Level 7

Mix your coins to maintain privacy. This is very advanced stuff. I may write more articles on this one day.

Level 8

Perhaps it’s wrong to call this level 8, because you should be thinking about this from the beginning: Inheritance planning. But it can be most effectively done if you’ve gone through the previous steps.

Make sure people in your will are able to access your bitcoin if you die. There is no single solution for everyone, it depends on many things.


Getting to level 8 is a difficult and long process, but it is extremely fun and satisfying! I hope many people can do this. It will be too great a barrier for some; if that’s you, I can offer help.

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