Security Guide
How to Store Bitcoin Safely
Bitcoin gives you complete control over your money — but that also means you are responsible for its security. This guide covers everything from hardware wallets to avoiding scams.
The Golden Rule: Not Your Keys, Not Your Coins
When you buy Bitcoin on an exchange like Safello or Binance, the exchange holds the private keys to your Bitcoin on your behalf. This is called custodial storage. If the exchange is hacked, goes bankrupt, or freezes withdrawals, you could lose access to your funds.
The solution is self-custody: moving your Bitcoin to a personal wallet where you control the private keys. For smaller amounts, exchange custody is acceptable. For holdings worth more than 10,000-20,000 SEK, self-custody is strongly recommended.
Levels of Bitcoin Security
Exchange Wallet + 2FA
Keep Bitcoin on a regulated exchange with two-factor authentication enabled. Suitable for small amounts and active traders. Swedish exchanges regulated by Finansinspektionen offer reasonable security.
Software Wallet (Phone/Desktop)
Use a non-custodial wallet like BlueWallet or Electrum. You control the private keys. Seed phrase stored offline. Good for medium amounts and regular users.
Hardware Wallet (Cold Storage)
Use a Ledger or Trezor device. Private keys never touch the internet. Seed phrase on metal backup in a safe. The gold standard for securing significant holdings.
Multi-Signature Wallet
Requires multiple private keys (e.g., 2-of-3) to authorize a transaction. Eliminates single point of failure. Used by institutions and high-net-worth individuals.
Protecting Your Seed Phrase
Your seed phrase (also called recovery phrase or mnemonic) is a list of 12 or 24 words generated when you create a wallet. It is the master key to all your Bitcoin. If you lose it, you lose your Bitcoin forever. If someone else gets it, they can steal your Bitcoin instantly.
Do:
- + Write it on paper or stamp it on metal (steel seed plates)
- + Store in a fireproof, waterproof safe
- + Consider splitting across two secure locations
- + Test recovery with a small amount before storing large sums
Never:
- − Store digitally (no photos, no cloud, no notes app)
- − Email or message the seed phrase to anyone
- − Enter it on any website (it is never needed online)
- − Share with anyone, including exchange support staff
Exchange Account Security
Even if you use self-custody, you will likely keep some Bitcoin on exchanges for trading. Secure your exchange accounts with these measures:
- • App-based 2FA: Use Google Authenticator or Authy, not SMS-based 2FA. SIM-swapping attacks can intercept SMS codes.
- • Unique, strong password: Use a password manager (1Password, Bitwarden) and generate a random password for each exchange.
- • Withdrawal whitelist: Some exchanges allow you to whitelist Bitcoin addresses. Only whitelisted addresses can receive withdrawals, preventing theft even if your account is compromised.
- • Anti-phishing code: Set up anti-phishing codes on exchanges that offer them (Binance, for example). Every legitimate email from the exchange will contain your code.
- • BankID advantage: Swedish exchanges using BankID add an extra security layer that global exchanges lack.
Common Scams to Avoid
Fake Exchange Websites
Scammers create websites that look identical to real exchanges. Always type the URL directly or use bookmarks. Check for the padlock icon and correct domain name.
"Send BTC to Receive More" Scams
No one will ever double your Bitcoin. These scams appear on social media, YouTube, and fake celebrity endorsements. They are always fraud.
Fake Support Agents
Scammers pose as exchange support on social media and messaging apps. They ask for your seed phrase or login credentials. Real support never asks for these.
Investment "Opportunities"
Unsolicited messages promising guaranteed returns on Bitcoin. Legitimate investments never guarantee profits. If it sounds too good to be true, it is.
Inheritance Planning
If something happens to you, can your family access your Bitcoin? Unlike a Swedish bank account (which can be accessed through a dodsbo process), Bitcoin in a personal wallet requires the private key or seed phrase.
Consider storing instructions and your seed phrase in a sealed envelope in a safe deposit box, or using a trusted family member approach where you split the seed phrase between multiple people. Some hardware wallet manufacturers also offer inheritance solutions.
Choose the Right Wallet
Compare hardware and software wallets to find the best security for your Bitcoin.