Bitcoin Storage

In 2017, CNBC published a story about a man who had mined Bitcoins for 4 years and amassed 7,500 in the early days of the currency. Unfortunately, the hard drive on which the complex strings of digits resided ended up in a landfill. The man was an IT worker in England, and when the laptop died on which he depended for the mining, he kept the hard drive but threw the rest away, or sold some of the parts. At the time, a Bitcoin was worth less than an English Pound.

Much of the story transpired between 2009 and 2014, which makes the entire story surprising since cloud based backups have been around since the early 2000’s. We have been burning our own compact discs (CD’s) since the late 1980’s, and we have been using USB storage devices since around 2000.

The problem with hard drives

Of course, anything physical could have been thrown in the dust bin by accident. And CD and DVD media have too high a likelihood of being unreadable from one drive to the next, or after a few short years. USB solid state media on the other hand is very reliable, but whether USB or cloud, the next consideration is how to encrypt a bitcoin wallet.

Software Wallets

Hard drive based wallets generally require a password to open. Another consideration is that you will need the software that manages a wallet to run on a computer. If the computer that first stored the bitcoin ran on Windows 95 and the company went out of business, you need to hope that you can find the software, emulate Windows 95 and simulate the original operations required to operate the wallet.

Pencil and Paper

Some think that we could calculate Bitcoin hashes with pencil and paper, perhaps at a rate of more than one solution a week, but that argument might have some holes in it. But there is no doubt that the private keys required to possess a bitcoin could be expressed with a pencil and paper. But transpose a single pair of digits and the key is rendered invalid. Cutting and pasting digital keys seems to be so much safer for managing the cryptic data in play.

Hardware Wallets

Hardware wallets allow bitcoin owners to carry their bitcoin or store it in a safe deposit box. Of course, you would need to understand how to recover your bitcoin in the event of hardware failure, or if a comet strikes your safe deposit box.

A bitcoin can be represented in something as simple as two QR codes. Since there are a lot of digits to the public address and the private key, it is a fairly dense code.