There are different ways to secure your crypto and we are going to talk about the best of them. We all know that by leaving your coins on centralized platforms such as exchanges, you’re putting yourself at risk as you are hoping that the platform will honour their financial obligation to you. Just because you have some numbers to your crypto holdings in your account on whatever platform you’re using, it doesn’t mean that you actually have them.
Those numbers only represent how much the centralized platform owes you. Just take a look at one of Canada’s former “top” exchange QuadrigaCX and how they lost essentially all of their clients’ funds due to mismanagement.
With shady and non-trustworthy exchanges, they have an obligation but they try to not pay you or they make you jump through hoops to withdraw your crypto as it’s in their best interest to keep the coins for themselves.
You could probably sue the exchange for your coins, but realistically, how many people are going to pursue that? There are a bunch of shady exchanges out there, so make sure you do your due diligence on which ones are legitimate as crypto is the Wild West.
If what I’ve written worries you, it should because the saying always holds true in crypto, “Not you keys? Not your coins.” This can’t be stressed enough so make sure you fully understand the risks involved with leaving coins on centralized platforms. Now, I’m not saying that you shouldn’t leave any coins on exchanges at all But if you want to secure your crypto. However, what I am saying is that you should never leave more than you’re willing to lose on any centralized platform.
For myself, I personally enjoy trading on Binance and have some coins in my account there. In addition, I have some coins with Celsius earning interest. But, I always make sure that I never leave more than I’m willing to lose so I always just withdraw when I need to.
So how should you secure your crypto then? There’s no cookie-cuter answer to that question as that’s dependent on your situation and the coins that you have as there are a multitude of wallets out there for different coins and for different purposes.
There are paper wallets, web wallets, mobile wallets, desktop wallets, and hardware wallets. Of those wallets types, they all have their pros and cons. In a nutshell though, you’re trading off security for convenience, and vice versa. For example, mobile wallets are really convenient to use but aren’t very good to secure your crypto.
Of those five types of wallets though, I believe that hardware wallets are the best compromise between security and convenience for the majority of people. In terms of security, your private keys to your coins NEVER leave the hardware wallet. This means that hackers can’t get your private keys because you don’t even have them yourself (you do have the seed phrase to the keys though).
With other wallets types though, there is the potential that a skilled hacker could extract the keys to your coins as those wallets are always connected to the internet, unlike with a hardware wallet.
In terms of the compromise on convenience, an extra step you would need to take is to connect the device to your computer (or phone if applicable) when signing a transaction or if you want to generate a new wallet address when receiving some crypto.
Now am I suggesting for you to go get a hardware wallet? No, not exactly. This would depend on the amount of coins you hold because it may not make financial sense to do so. There’s no point in buying a hardware if the amount of the coins is worth less than the device itself.
That is unless you know you will accumulate a lot more in the future. So then when is the best time to get one? As everyone’s different, I would say that you should get one when the anxiety over the security of those crypto trumps the feeling of paying $x for a hardware wallet.
For you that may be a $1,000 worth of crypto. For others, that may be $10,000 worth of crypto. Everyone’s different but that should give you a gauge of when you should buy a hardware wallet.
For those who are interested in getting a hardware wallet though, I would suggest getting either a Ledger or Trezor if you want to store a multitude of coins. When you look online for a hardware wallet, you’ll see numerous wallets out there.
However, I would say that the most trustworthy and secure hardware wallet companies in the crypto space are the two mentioned. Both companies have been in the crypto space for some time and the products they offer are quite reputable. In terms of which one is better, it all boils down to personal preference. I have friends and know people who like Ledger better than Trezor and vice versa.
A final note on these devices is that I suggest that you do your research first on the hardware wallet that you’re thinking of buying as the device you’re thinking of getting may not be capable of storing coins you’re planning on accumulating. For example, the Trezor One can’t store XRP. Now I’m not sure about whether or not you hold XRP, but that may be a deal breaker for some people. I’ve made some videos about the different devices if you don’t already know much about them and would like to learn more.
LEDGER NANO S AND NANO X COMPARISON
TREZOR ONE AND MODEL T COMPARISON
LEDGER AND TREZOR COMPARISON
Just as I had written above, both Ledger and Trezor make hardware wallets that can store different cryptocurrencies. However there is a company, Coinkite, that makes a Bitcoin only hardware wallet that’s worth mentioning as well. From my experience with them, the Coldcard wallet is the most secure Bitcoin wallet that you can get.
They’ve essentially thought about every single point of attack where the device may get compromised and have created solutions to ensure that the device is as secure as possible. You may consider this overkill but at least there’s more peace of mind with security.
This is not to say that the Ledger or Trezor isn’t secure, which I’m not insinuating, I’m just saying that Coinkite has gone the extra steps to really ensure that your Bitcoin is secure with the Coldcard wallet.
I hope that I was able to help stress to you the importance of keeping your coins safe and have shown you some potential solutions. If you’ve found what I’ve written or my videos helpful and want to thank me, please consider using my links below when ordering a hardware wallet. It doesn’t cost you a thing and it helps me out.
Shop For A COLDCARD
For those of you who already have a hardware wallet, let me know in the comments what you have or which one you like the best.