Always keep your Ether savings in an offline wallet

There’s much to be said on regarding how to store Ether currency.  There are many apps that will be developed towards this. The future is still to be written, but meanwhile there’s something very clear:  You’re the only responsible for how you store your ether savings, so do it correctly or loose your money

Meanwhile learning about the ether currency world you’ll find all sort of ethereum wallets out there.  There are some wallets that are accesible online and are managed by third parties, there are physical ethereum wallets, paper ethereum wallets, etc.

All these wallets have benefits, and none of these options is to be discarded, but on regarding your lifetime savings or investments in ether, the considerations are specific: be extremely careful on how you store your ether.

Consider this: In the digital currency world there are no banks and there is no government regulating your money. This is, by principle, a desired thing. Your money belongs to you and there are no financial institutions charging you excessive amounts in fees and commissions to store your own money. But as there is no institution out there, so there’s the risk of you loosing all your money by not storing it in a safe place.  At least with our current bank/government systems we would have somewhere to go and cry if somebody steals our money. They would probably give you a refund if something went wrong on their side.  But on the digital currency world nobody is there to protect you, the system is strong enough to be able to do transactions securely but you’re the only responsible for storing and protecting your ether.

Ways to Protect your ether savings

Let’s say you have a ethereum wallet that you use to handle a little bit of cash.  This wallet will never have more than a few ether in it and you will spend it fairly quickly.  It functions as your pocket wallet with some loose change to use here and there.

That wallet wouldn’t need much protection, if someone steals your wallet with loose money you would simply get another wallet and put some more money in it.  So is the case with the ethereum wallet you would use for everyday transactions. Open it online, use it as you wish and just be sure to not carry much money so you wouldn’t suffer if it get lost.

Now, for your savings, as you would do with real money, find a safe place where to put that money, lock it and forget about it! In the ethereum world there are a few solutions that mimic this behaviour:

Hardware wallets: These are physical apparatus with USB ports that securely store your ether money and you will be able to use them to transfer money somewhere else whenever you want. These also normally come with a recovery method in case the device get lost or damaged.  See Trezor as an example of a hardware wallet for Bitcoin and Ether.

Copyright: https://www.buytrezor.com
Copyright: https://www.buytrezor.com

Offline wallets: These are wallets created offline and printed securely in a paper so nobody can access it but whoever posees the paper. The process to create an offline wallet is somewhat long and painful (disconnecting your computer from internet, having a second computer that has never been connected to the net, using printers with no wifi on them, etc) but are worth if you’re storing a considerable amount of money in these wallets.

In both cases, the security of your savings depends of you and only you.  If you share your hardware, offline or printed wallet with somebody else, there it goes your security.  For example, there was a case of somebody handling a piece of paper to another person with printed information for a wallet in live TV. The camera was able to capture the account and private key information for a few seconds. Minutes later, there was no money on the account. Someone was able to access it and transfer everything out of the account.