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Cold Storage: Brain Wallets – Security Methods Part III

Brain wallets are one of the most futuristic methods for securing bitcoin. They seem like the kind of thing that will be plot devices of heist movies in the future. They are very real but very risky especially if you have a lot of bitcoins in them. That being said, it can be super fun to have a brain wallet with just a little money.

A brain wallet is a Bitcoin address whose private key doesn’t exist anywhere digitally or physicallyonly in your mind. It’s a wild concept to us, but this means that you can go anywhere in the world, across any national borders, with your bank account safely in your memory.

So how does it work?

While it might be possible to memorize the alphanumeric characters of your private key, it would take forever and suck the fun right out of having a brain wallet. Instead, you can use an algorithm that converts a passphrase of your choice into a key pair. There are lots of websites that will generate these, but works just fine for brain wallets as well. It’s recommended that your passphrase:

  • includes letters, numbers, and punctuation marks
  • is longer than an average password (the longer the better)
  • doesn’t appear in anything published, ever…ever.
  • includes random mistakes or alterations (“…50 yOu’r3 t3LL!ng mE Th3re’s A chanC3…” instead of “…so you’re telling me there’s a chance…”)

It’s important to take these recommendations seriously. There are some disconcerting posts on Reddit written by people who had their bitcoins stolen because they used passphrases that weren’t strong enough.  The more random the better!

There are probably some exceptional situations in which it would be advantageous to keep a lot of money in a brain wallet. Maybe if someone was persecuted where they lived and needed a place to store their money that would be immune to web-wallet seizure, device confiscation, or having your house burned down and your paper wallets with it. Aside from that, it is not recommended to keep any significant amount of bitcoins in a brain wallet. The risks of forgetting your passphrase or dying before you can tell your family what it is are too great.

That being said, it is pretty fun to come up with a cleverly disguised passphrase and know that a small amount of your money is safely tucked away in your mind.

This article was originally published in a 3 part series on Linked here are parts one and two. Follow EveryDayBitcoin on twitter for more.