Be your own bank
Bitcoin gives you real digital ownership, but with freedom comes responsibility.
On an exchange, you don’t hold bitcoin yourself. You trust a third party. The risks: platform failures, hacks, honeypots, and fraud. Regulation provides some protection, but never zero risk.
This guide explains how to take full control of your bitcoin.
1. Why self-custody?
”Not your keys, not your coins.”
In the traditional system, you depend on banks, brokers, and platforms. Bitcoin eliminates that dependency.
| Custodial (Exchange) | Non-Custodial (Own Wallet) | |
|---|---|---|
| Who holds the keys? | The platform | You |
| Risk if platform fails | Total loss possible | No risk |
| Access | Can be blocked | Nobody can block |
| Responsibility | Platform | You |
Rule of thumb: Think of your wallet like a physical wallet. You carry what you need for daily life. Anything beyond that belongs in the vault: a hardware wallet in self-custody.
2. Your first wallet
Hot wallet (app) — for getting started
For smaller amounts (a few hundred euros), a good software wallet on your smartphone is enough. Free, quick to set up, practical for everyday use.
Important: Only use established open-source wallets. Open source doesn’t guarantee security, but it means anyone can audit the code. Vulnerabilities surface faster than in closed-source apps where only the vendor sees the code.
Our current wallet recommendations (coming soon)
Hardware wallet — for larger amounts
Once the amount would hurt to lose, use a hardware wallet. These are physical devices that never connect your private keys to the internet.
Buying rule: Only order directly from the manufacturer or authorized resellers. Never through Amazon or eBay.
Our current hardware wallet recommendations (coming soon)
3. Setup & backup
Hardware wallet step by step
- Buy: Only from the manufacturer or authorized resellers
- Inspect: Check packaging for tampering
- Software: Download only from the official website
- Set up: Follow the manufacturer’s instructions
- Backup: Write down 12 or 24 words
The golden backup rule
Your backup (the “seed phrase”) is your wealth. Whoever has these words has your bitcoin.
DO: Write on paper, store in a safe place, use a steel plate for larger sums.
DON’T: Take a photo, save in the cloud, send via email or chat, show anyone.
The test restore
Before you transfer larger amounts, test your backup:
- After setup and backup, send a small amount (e.g., €10) to the new wallet
- Completely wipe the wallet
- Restore using only your backup
- Is the money there? Your backup works
Only then do you transfer larger sums.
When sending: Check the receiving address. Compare at least the first and last characters, since malware exists that swaps addresses in the clipboard. For large amounts, send a small test amount first.
The Privacy article explains how to use Bitcoin not only securely but also privately.
4. Scam prevention
The one rule that protects you
Never enter your 12/24 words except to restore your own wallet on a trusted device.
The most common scams
“Double your Bitcoin” Nobody doubles your money. Nobody. Ever.
Fake support Real wallet manufacturers never ask for your seed. Anyone who does is a scammer.
Phishing websites Check URLs with care. One wrong letter is all it takes. Bookmark the real sites.
“Help, I’m locked out” Exchanges and wallets don’t contact you via DMs on social media.
Unsure? Ask first.
Our scam helpline is there before you send money. Send us the link, the offer, or the screenshot. We’ll give you an honest assessment, free and confidential.
Already lost money? Go to the police as soon as possible. We can’t recover lost bitcoin, but authorities can investigate.
5. For advanced users
The passphrase
The passphrase adds an extra password to your backup. If someone finds your seed, they can’t access your funds. But if you forget the passphrase, your bitcoin are gone forever.
Watch out for typos: Every passphrase, even a wrong one, generates a valid wallet. If you mistype it, you’ll end up in an empty wallet and may not notice until you try to restore your backup. After setup, check the master fingerprint of your hardware wallet and note it alongside your backup. This lets you verify you’re in the right wallet.
Multisig
With multisig, you need multiple keys (e.g., 2 of 3) to sign a transaction. An advanced option for larger amounts, businesses, and inheritance planning.
Miniscript and time-locked safety nets
Miniscript extends what multisig can do: you can set conditions like a recovery key that activates after a set period, so someone else can recover the funds if you lose your main key. Useful for inheritance planning and long-term storage. The software Liana makes such setups accessible to end users.
Multisig, Miniscript, and advanced custody in detail (coming soon)
FAQ
Can I lose my bitcoin if my phone breaks?
No, as long as you have your backup (seed phrase). The bitcoin live on the blockchain, not on the device. Your phone is a window into the network.
My backup was stolen. What now?
Create a new wallet and transfer all bitcoin there. The thief has access the moment they enter the words. Every minute counts.
Where should I store my backup?
Not at home in a desk drawer. Fire, break-ins, water damage: all common causes of loss.
Better: bank safe deposit box, fireproof safe, or distributed across multiple locations.
For larger sums or organizations: multisig, so no single location and no single person holds all the keys.
What’s the difference between seed phrase and passphrase?
The seed phrase (12 or 24 words) is your base backup. The passphrase is an optional additional password that generates a different wallet. Both together provide the strongest security but also the most responsibility, because you need both to access your bitcoin.
Are there alternatives to the classic seed phrase?
Yes. Trezor devices support SLIP39 (Shamir Backup), which splits your seed into multiple parts, for example 3 of 5. You only need a certain number of parts to restore. This is a backup method, not multisig (which concerns transactions). The downside: SLIP39 is not compatible with the BIP39 standard most wallets use. You can’t restore the backup in an arbitrary wallet.
Backup strategies in detail: BIP39, SLIP39, and Multisig (coming soon)
Got the theory?
At our meetups, we'll walk you through it in person.