Survey Shows Many BTC Holders Use Hardware Wallet, Have Backup Keys

Published at: May 4, 2020

A survey posted to Reddit shows that most crypto holders store the majority of their Bitcoin in hardware wallets and keep a backup of the private keys on a sheet of paper. 

Reddit user gunnaj — real name Gunnar Lindqvist — posted the results of the survey as part of his thesis to Reddit on April 30. The undergraduate student at the The University of Skövde in Sweden asked 339 people five questions related to Bitcoin (BTC) security, focusing on how crypto holders handle their private keys.

When participants were asked where they stored the majority of their BTC, nearly half — 158 people — said they used a hardware wallet such as those offered by Ledger, TREZOR and BitLox. Hardware wallets can store both a user’s crypto wallet and private keys.

Source: Reddit

Cybersecurity was also a topic under discussion in  Lindqvist’s thesis. Roughly 88% of those surveyed said they kept backups of their keys, with the majority —  238 people — admitting their backup was on a scrap of paper.

Source: Reddit

Source: Reddit

Speaking to Cointelegraph, Lindqvist thinks hardware wallets are the most popular options among BTC holders because they offer “availability, security and user-friendly interface.” But what method does the student use himself?

“I'm using a hardware wallet and I use a piece of paper where I have written down my backup. But I'm considering [a] metal plate now after the survey.”

Safest way to store private keys

The crypto community is long past the days when users had few choices but to write down their keys in capital letters on a notepad. Prominent figures like Binance CEO Changpeng Zhao have suggested that exchanges are better for holding crypto than users retaining the keys themselves. 

According to this survey, it seems that an old school method of security may be the preferred one. This could be in response to exchanges being hacked, but users physically storing keys comes with its own risks. Thousands of BTC have been lost from holders misplacing or destroying equipment containing private keys over the years, amounting to billions of dollars vanished into the ether. 

However, even when keys are held securely, backed up, and still “lost”, there can be hope. A software engineer was able to recover nearly $300,000 in Bitcoin for a Russian who lost the password to a zip file containing his private keys.

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