One of the primary concerns for cryptocurrency users is wallet hacking and data theft. Cryptocurrency will always appeal to hackers, regardless of the size of your portfolio or the sort of wallet you use, whether custodial or non-custodial. On the other hand, adhering to strong storage and security standards will reduce the risk of an attack.
As a crypto user, especially a beginner, one of the first considerations when starting your cryptocurrency journey is how to safely buy and store your cryptocurrency. Unlike traditional banks, cryptocurrency is ideally not protected from fraud by any authority. As a result, it is your responsibility to protect your crypto assets. Your crypto wallet, whether custodial or non-custodial, is the gateway to your digital assets; thus, keeping it safe is vital if you don't want to become a target for malicious conduct.
Storing your cryptocurrency safely is crucial since there have been several reports of attacks and losses of assets of people and top exchanges due to wallet hacks and digital theft by scammers and hackers. As a result, it's necessary to understand the best ways to keep your cryptocurrency, especially as a newbie.
How do you store your cryptocurrency? What factors should you consider before choosing a storage option? This post will explore how to store your cryptocurrency and the factors to consider before choosing the best storage option based on your crypto activities. Continue reading to learn how to store your cryptocurrency in 2023 and avoid becoming a victim of wallet hacks.
How to Store Cryptocurrency
Purchasing cryptocurrency is one thing; knowing how to keep it is quite another securely. Storing cryptocurrency necessitates specialized skills, particularly when acting as your own bank. Although no cryptocurrency storage solution is without difficulty or disadvantage, knowing which cryptocurrency storage option is ideal for you based on your activities will help you increase the security of your crypto assets.
On the other hand, regardless of the storage option you choose, having a crypto wallet is fundamental to storing your cryptocurrency. A cryptocurrency wallet is a software or hardware that uses blockchain technology to securely administer, send, and store your crypto assets, private keys, and wallet addresses or public keys in one location. Your crypto assets are not actually stored in a crypto wallet. Instead, the crypto wallet stores the private keys to the crypto assets on a blockchain network. As a result, consider a crypto wallet the key holder for your crypto assets held on blockchain networks.
While a crypto wallet is essential for storing your cryptocurrency, there are three primary methods for safely storing your digital assets.
- Storing cryptocurrency in exchanges
- Storing cryptocurrency in hot wallets
- Storing cryptocurrency in cold wallets
Storing Cryptocurrency in Exchanges
A cryptocurrency exchange is a digital marketplace where you may buy, sell, swap, and trade multiple cryptocurrencies. Crypto exchanges serve as middlemen, allowing you to convert your home fiat cash into digital currency and vice versa. Because they are simple to use, crypto exchanges, particularly centralized exchanges, are frequently the go-to spot for purchasing your first cryptocurrency.
While the major function of crypto exchanges is to facilitate trading, they also serve as a wallet for keeping digital assets. As a result, when you buy Bitcoin from an exchange, you can also store it with them. However, holding your cryptocurrency on crypto exchanges usually implies that you are entrusting the platform with the responsibility and safety of your asset, allowing them access to your private keys.
Crypto exchanges usually appeal to newbies because they are simple to set up, free to use, and require less responsibility. However, certain risks are associated with storing your asset on a crypto exchange because you do not have complete control over your asset and private key and must rely on them.
Storing Cryptocurrency in Hot Wallets
Hot wallets are software wallets connected to the internet and can be downloaded to store your private keys. Authentication as a password is required to access the assets saved in the software. Desktop, mobile, and web wallets are the three types of hot wallets. Crypto exchanges are examples of web wallets, usually the most accessible wallet.
Desktop wallets are software that is installed and run directly on your computer. With the desktop wallet, you may control your asset while using any third-party program and staying up to date on news and information about your assets. On the other hand, desktop wallets are vulnerable to cyber-attacks because they are housed on the internet, which exposes your activities.
Mobile wallets are easy to set up on your smartphone. The app runs on your mobile and can be taken with you wherever you go. Mobile wallets allow you to do various tasks, rather than just storing your cryptocurrency, such as engaging in crypto trading activities.
Hot wallets make storing, transferring, and trading your currencies easy because you only need the wallet's password. However, storing your cryptocurrency in hot wallets has its drawbacks. One of them is that they are usually connected to the internet, making them vulnerable to hacking and other malicious cyber crimes.
Storing Cryptocurrency in Cold Wallets
Cold wallets or cold storage is a security feature in which your private keys are stored offline. This implies that your private keys are not accessible via the internet, making it difficult for hackers to steal them.
Cold storage is classified into two types: hardware wallets and paper wallets. Hardware wallets are the most commonly used cold wallets; they are physical devices that store your private keys and are often USB-connected to your PC. Cold storage wallets let you keep your valuables off the internet and on physical devices. Because they are internet-free and regarded as safer than hot wallets, users of hardware wallets may keep their assets secure offline thanks to the software of these devices, which only allows access via a private key when the device is connected to the main computer system or device.
A hardware wallet is immune to internet hackers since it is held on a physical device not connected to the internet, making it the safest, most secure, and best way to store cryptocurrency. However, they have a disadvantage in that they are not immediately accessible because they must be used while connected to a computer. Second, they are often sophisticated and require some technical understanding to use. Finally, they are typically highly expensive and might be difficult to manage for newcomers.
Where Should You Store Your Cryptocurrency?
Although cold wallets are the best way to store your cryptocurrency, especially if you're investing a large sum of money or intent on storing your crypto assets for the long term, however, as a beginner, or if you're a trader who requires quick access to monitor deals and transfer assets, a hot wallet or crypto exchange may be the best alternative. While each method of keeping your cryptocurrency has advantages and disadvantages, they aim to secure it.
To summarize how to store cryptocurrency, begin by selecting a reliable crypto wallet. Cwallet is one of the most trusted crypto wallets with the lowest barrier of entry. Cwallet is a one-of-a-kind cryptocurrency wallet that combines custodial and non-custodial functionality. This combination of on-chain and off-chain wallets allows you to manage and trade over 800 cryptocurrencies in a single location, providing security, simplicity, and flexibility.
Cwallet meets individuals' and enterprises' complex crypto needs through features such as the tip code, airdrop game, giveaway tool, mobile refills, bulk payment, request invoice, payment button, etc. It is more than just a cryptocurrency wallet where users may send and receive funds, buy and sell, or hold and swap cryptocurrency.
Cwallet provides:
- Real-time asset value information,
- The most recent and lowest transaction rate,
- A giveaway tool that allows anyone to create a giveaway with their choice of rules and regulations,
- An exclusive bot that allows users to send/receive tips and airdrops and set up referral programs on several social networks, including Telegram and Discord.
Cwallet is an interactive multi-functional crypto wallet. The only wallet you'll ever need for practically all your cryptocurrency needs.
What's more?
Cwallet does not charge any deposits, withdrawals, or token swap fees. As a result, using Cwallet is completely free!
So, what are you waiting for?
