German Federal Office for Information Security Advises Users to Store Crypto in Hardware Wallets

In an Aug. 16 LinkedIn post, Germany's Federal Office for Information Security, also known as BSI, explained the best practices for crypto storage and ultimately told users that a crypto hardware wallet was the most secure way to store private keys.

Germany’s Federal Office for Information Security has highlighted the importance of using crypto hardware wallets for optimal security.

In an Aug. 16 LinkedIn post, the office outlined best practices for crypto storage, ultimately advising users that a hardware wallet is the most secure way to store their private keys.

The post began by discussing exchange-linked wallets, also known as “hot” wallets, explaining that while keeping crypto in an exchange wallet may be convenient for the end-user, it is also the least secure way of storing keys. This is because these wallets are always connected to the internet, creating an attractive target for hackers.

Next were self-custodial wallets on a user’s computer or smartphone. While this colder storage method is safer than keeping crypto on exchanges and allows users to control their keys, self-custodial wallet applications still suffer from “security gaps,” according to the BSI.

Once again, the main attack vector for these wallets is the internet, where hackers can download malicious programs to the computer or the smartphone where the application is installed and steal the user’s private keys.

The post concluded by noting that hardware wallets were “secure and protected by PIN,” before also advising users to create backups of their seed phrases or private keys and store those copies in a safe place.