My plans for Spain have no set destination or route except flying to Madrid work my way south then back to Madrid for my flight back.

My only fear is about my passport's safety ( Iraqi passport: big problem if lost! )
Now which of the following would be best:

1- carry my passport with me at all times, in some hidden pocket. (Drawback related to nightlife and drinking!)


2- leaving my passport with the hostel's owner for safe keeping.. ( I will be staying at different hostels in different cities so I don’t know how safe this is)

3- placing my passport in some kind of safe deposit box in a bank or a station in Madrid..(I'm not sure if this is even possible) and picking it at up on my way back..
using a photocopy of my passport for the hostel owners.
Is this last option valid? As far as I can think I don't need my passport for anything there, will be using ATM card for money and not traveler's checks..


Any help would be strongly appreciated..