Safely Storing Crypto in a Secure Wallet
⏳ Estimated Reading Time: 4 minutes
Welcome to the third article in our series on safely investing in crypto. We speak about the importance of securely storing your crypto.
⭐Types of Crypto Wallets
👉Hot Wallets
- Desktop Wallets: Installed on your computer (e.g., Exodus, Electrum).
- Mobile Wallets: Installed on your smartphone (e.g., Trust Wallet, Mycelium).
- Web Wallets: Accessed through a web browser (e.g., MetaMask, Coinbase Wallet).
👉Cold Wallets
- Hardware Wallets: Physical devices storing private keys offline (e.g., Ledger Nano S, Trezor).
- Paper Wallets: Physical paper with private keys and public addresses.
⭐Choosing the Right Wallet
- Security Features: Look for two-factor authentication (2FA) and biometric verification.
- User Experience: Easy to use, especially for beginners.
- Compatibility: Supports the cryptocurrencies you plan to store.
- Backup and Recovery: Allows secure backup and recovery of private keys.
⭐Setting Up a Wallet
- Download and Install: From a trusted source.
Create a New Wallet: Set a strong password and securely store the recovery phrase.
- Enable Security Features: Enable 2FA and other security measures.
- Transfer Funds: Move cryptocurrencies from the exchange to your wallet.
💥Real-Life Incident: QuadrigaCX
In 2019, the founder of QuadrigaCX passed away, taking $190 million in private keys with him. This underscores the need for secure storage and proper backup.
👍Best Practices for Wallet Security
- Keep Private Keys Safe: Never share them; store offline.
- Use Hardware Wallets for Large Holdings: Minimize hacking risk.
- Regularly Update Software: Protect against vulnerabilities.
- Be Wary of Phishing: Verify sources before entering wallet info.
Safely storing your cryptocurrencies is crucial.
