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Is it a bad idea to keep a usb with a bitcoin wallet on a safe deposit box at a bank? Of course it will have a password

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And the seedphrases not in the bank

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View Reddit by zelitu5View Source

Written by BTC India

26 Comments

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  1. **Safe deposit boxes are not safe.** They are from an era that was too trusting and nobody in the modern era should be using them. They disappear, are accidentally drilled and contents removed without proper documentation, are subject to seizure and are completely uninsured. A quick google search will produce pages and pages of instances where a person lost everything due to all kinds of shit outside of their control. And most people don’t figure out they were rugged until years later.

  2. This always blow my mind. Am i the only one that feels that keeping your bitcoin literally on a bank is the worst idea ever? defeats all the self-custody that Bitcoin is about

  3. This setup is ok for small amounts of savings. I would be most worried about the USB stick breaking. If you check on it regularly and have the seed phrase stored somewhere safe you’ll be OK. Aside from theft, the most common way to get rekt is by not checking your backups.

    Many people recommend you use a BIP32 seedphrase with a password. I don’t like this option (and I’ll explain why in the next paragraph). You will need to store the two pieces of information in separate places. Keep in mind that the password essentially turns one point of failure into two. So if you lose the 12 words OR if you lose the password you lose everything, so you should probably back up each backup. Put the seed phrase in two different safe locations, then put the password in two other safe locations. Now you have four things to protect, and if someone compromises the right 2 things you are rekt.

    If this sounds like a lot of work for not a lot of security, you are correct. A much better solution is to use a 2 of 3 multisig wallet. Now you have to secure three pieces of information and any two of them are sufficient to spend your coins. Put each 12 word seed phrase (with no password) in a different safe place. Check on them regularly. You can use a hardware wallet for convenience, but the safest method is to stamp your 12 words into a steel plate. That way you can dig it out of the ashes after a structure fire or a bomb or earthquake or whatever.

    You need to tailor your security setup to the value of your holdings and the amount of work you are willing to put into it. Another good option is to just use a multisig service like casa or unchained. The company holds one key and you hold two. This is a good choice to trade convenience for money without compromising your security.

  4. 10 years is the shelf life on flash and your milage will vary greatly based on a number of factors. One thing you can do to improve your odds is make multiple copies if your file on the usb drive

    Of course you can store multiple drives in the same and different locations.

    And you can consider a non electronic backup impervious to most heat and water like small inexpensive titanium plates you can buy on amazon. Titanium wont rust and has a high melting point.

  5. The whole point of bitcoin is to remove trust and your idea was to trust the bank? If youre going to do that you might as well leave it on an exchange because that’s the same logic they use.

    The USB itself is not where the bitcoin is stored, it’s all on the block chain. The USB just has a private key that let’s you access the coins. You’re better off buying a trezor and storing the seed phrases in multiple safe, secure locations.

  6. I don’t think it’s a bad idea as long as usb stick is properly encrypted and you have backup of your seed at your home. Even if someone breaks in your safe deposit box, they can’t get into your wallet.

  7. Safe deposit boxes can be a great option for a partial backup. Never a full backup. For instance, if you have a multi-sig setup, you could store one of the signers in a deposit box, one in your home, and one with a trusted friend or family member. Could even do two deposit boxes at different banks (different locations and companies).

    So long as what you store in the deposit box will not allow full recovery on its own, it is a fine option. This also allows easier recovery for your family when it comes to inheritance.

    If you do go this route, I’d recommend sealing the backup in a tamper evident container so you can confirm if it has been compromised. Do regular checkups on your backups, and if any of them appear to have been tampered with, move them to a new seed and redo your backups.

  8. Your keys should be stored on something physical like a steel plate. Not a USB stick.

    If you’re concerned about security, use the bip39 passphrase, with good entropy, and store it in a separate location than your mnemonic seed words.

    Consider storing your bip39 passphrase in the form of a riddle that only you would know the answer to. Granted this method does not account for a future brain injury or memory loss you may have.

    Using a bank by definition requires the trust of other humans, which defeats the purpose of self custody.

  9. Everyone is saying no to keeping your wallet in a safe deposit box which I fully agree but I don’t think it is a problem keeping your seed phrase there as one of your storage places. Just not the only place.

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