Safest ways to Store your Cryptocurrencies

Many would agree that 2022 has been a disaster for the cryptocurrency industry. In addition to declining prices, the crypto space has been repeatedly rattled by bankruptcies, severe bridge hacks, and the collapse of large-scale crypto ecosystems.

As users frantically scramble to remove their funds from compromised or insolvent platforms, the time has never been better to discuss the safest ways to store your cryptocurrencies. Getting cryptocurrency is one thing, but keeping it safe requires different skills and knowledge. Read on to find the most secure way to protect your crypto assets.

How do you store your Cryptocurrencies?

The mechanisms for storing your cryptocurrency referred to as “wallets,” are numerous. You need a cryptocurrency wallet to manage and keep your crypto assets secure. A cryptocurrency wallet is made to store your private and public keys, send and receive digital currencies, check their balances, and communicate with other blockchains.

Storing cryptocurrency in a hot wallet

Hot wallets are freely accessible and linked to the internet. They are typically available as desktop and mobile apps, all online cloud wallets, software wallets, and crypto exchanges.

Hot cryptocurrency wallets give you control over your cryptocurrency and are simple to use. With this kind of wallet, you may quickly transfer and receive crypto. Hot wallets feature a recovery phrase you can use to get your crypto back should you lose access to the hot wallet. However, they are prone to hacking as the crypto is stored online. The chances of this happening are low as many people use hot wallets with no issues. However, you would want to avoid taking the chance with significant cryptocurrency funds.

Storing cryptocurrency in Cold wallets

Cold wallets include hardware wallets, offline kept paper wallets, USB and similar offline data storage devices – and even physical bearer items such as physical bitcoins. They allow users to store their crypto funds offline. Funds can still be deposited into cold wallets at any moment, but they cannot be transferred.  

A cold wallet is a wise investment for significant cryptocurrency holdings. Hardware wallets are the most popular kind of cold wallet. They are generally considered the most secure way to store cryptocurrency from a security standpoint. Most platforms use it to protect their cryptocurrency. Hackers can’t steal your crypto while it’s offline. Several highly reviewed hardware wallets are available from $50 to $150.

Convenience is cold wallets’ major drawback. The process takes longer than if you kept everything online. You will have to hook up your cold wallet to move crypto.

Storing cryptocurrency in a custodial wallet

A custodial wallet is the default option for crypto storage. A third party holds your crypto (for you) through hot (online) storage, cold (offline) storage, or a combination of the two.

Coins bought from crypto exchanges are typically put in a custodial wallet they control. You can transfer it to your hot or cold wallet if you want to store it yourself.

However, only some crypto platforms allow this. Some stock brokers and apps only let you buy and sell crypto but not transfer it anywhere. In that case, the only option is to use their custodial wallet.

Many investors use custodial wallets without problems for the following and many other reasons:

• You have less work to do
• Your cryptocurrency is conveniently accessible if you want to exchange it since it’s kept in your account.
• You have nothing to worry about losing your crypto wallet. You can access your crypto as long as you can access your account.

But your cryptocurrency is managed by a third party. You trust its security procedures and hope you won’t be locked out of your account.

Custodial wallets are a far more practical choice for bitcoin investment; but less secure than using your wallet. If you choose to continue using a custodial wallet, be sure the platform you choose has strict security requirements.

Storing cryptocurrency in a physical wallet

A physical crypto wallet or paper wallet is another type of cold storage. It is a printout of public and private keys, usually as a string of characters and as scannable QR codes.

You carry out cryptocurrency transactions using these keys. For instance, the public keys allow you to receive crypto, while you would need to scan the public and private keys to send crypto from the wallet.

Paper wallets offer the same benefit as hardware wallets since they provide greater security by keeping your crypto offline. They are ideal if you want maximum security at the lowest possible cost and are free to make your own.

The drawback is that paper wallets are the least convenient way to store cryptocurrencies. While anyone can make their paper wallet following steps online, hardware wallets have much less of a learning curve.

Note:

The majority of the wallets mentioned above do not stop you from enjoying your crypto casinos. After you have bought some crypto and safely stored it in your preferred wallet, you’ll want to head to captaingambling.com to see all the fuss. While some mainstream gambling platforms have begun to accept digital currencies, several dedicated crypto casinos are also increasing numbers daily.

Final thought

The safest way to store your crypto is to use a hardware wallet to maximize the security of your crypto. They give you an extra layer of security from phishing sites, malware, and cyber-attacks. While hardware wallets can be relatively expensive, they are worth the investment as they give you peace of mind, which is impossible when relying on other types of wallets.