Bitcoin Security Levels: How safe are your sats?

Not all Bitcoin holders have the same level of security. Here are 6 Bitcoin Custody security levels in one post.

Level 0: Bitcoin on an Exchange

💀 If your coins are on an exchange, they are not yours.

🚨 Risk: Hacks, insolvency, frozen accounts.

🔑 Not your keys, not your coins!

Level 1: Hot Wallet on Mobile or Desktop

🔥 You own your private keys, but they are online = vulnerable.

✅ Better than an exchange, but not secure for long-term storage.

💡 Recommended wallets: BlueWallet, Sparrow.

Level 2: Hardware Wallet with Shitcoin Support (or closed source Hardware Wallet)

🔐 More secure than hot wallets, but:

🚨 Many hardware wallets (e.g. Ledger) support altcoins and are not fully Open Source.

❌ Unnecessary attack surface!

Level 3: Bitcoin-Only Hardware Wallet

✅ No altcoin support = reduced attack vectors.

💡 Recommended wallets: BitBox02

➡️ Want even more security? Airgapped wallets! 👇

Level 4: Bitcoin-Only + Airgapped Hardware Wallet

✅ Even fewer attack vectors since transactions are signed via QR code or SD card.

💡 Recommended wallets: Foundation Passport, Coldcard, SpecterDIY

Level 5: Single Seed + Passphrase (Cold Storage)

💪 Extra security: Even if someone finds your seed, they can’t access your funds without the passphrase.

Important: Never store your passphrase digitally

🔐 Recommended wallets: Foundation Passport, SpecterDIY

🚨 Warning: Higher risk as you now have two single points of failure. Your setup must be well thought out.

Level 6: Multi-Sig Cold Storage

🛡️ Multiple keys required to spend = maximum protection.

✅ No single point of failure.

👨‍👩‍👦‍👦 Ideal for families or businesses.

🔐 Can be customized:

➡️ 2-of-3, 3-of-5, mixed hot & cold wallets.

💡 Recommended solutions: Unchained Capital, Sparrow, Blockstream Jade

That's a wrap! Let me know what you think! Do you agree? Did I miss something?