How to Store Your Crypto

How to Store Your Crypto Safely: Best Ways

To learn how to store your crypto safely is very important. You ask why?

Well, do you know that over $1 billion worth of cryptocurrency was stolen in 2023 alone due to improper storage? If you’re new to crypto, this might sound alarming, but don’t worry—this blog is here to help you keep your cryptocurrencies safe.

Proper storage of your cryptocurrency is crucial because, unlike fiat money, once your crypto is gone, it’s almost impossible to get it back.

That’s why knowing how to store your crypto securely is one of the most important steps you can take as a new investor.

In this guide, I’ll help you with everything you need to know about storing your crypto safely.

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Best Ways to Store Your Crypto

In this blog post, I’ll take you through the 3 best ways to store your cryptocurrency. I’ll explain each in detail and share their pros and cons to help you make a better decision.

1. Store Crypto on Exchanges

Crypto exchanges are online platforms that allow users to buy, sell, and store cryptocurrencies. They act as intermediaries between buyers and sellers, facilitating the trading of cryptocurrencies.

There are lots of exchanges available for users to choose from but some of the best and biggest crypto exchanges include Binance, Bybit, and Gate.io

These exchanges allow all users to store their crypto with them.

How to Get Started

  1. Account Creation: Go to the official website of your chosen exchange. Click on the sign-up button and fill out the registration form with your email address and a strong password. Then verify your email address by clicking on the link sent to your inbox.
  2. Verification: Complete the Know Your Customer (KYC) process, which usually involves uploading a government-issued ID and sometimes a selfie.
  3. Buying and Storing Crypto: Once your account is verified, you can start purchasing and storing cryptocurrencies. Usually through bank transfers, credit/debit cards, or by receiving crypto from another wallet or exchange.

Pros and Cons

Pros:

  • User-Friendly: Most exchanges are designed to be easy to use, making them perfect for beginners.
  • High Liquidity: They make it easier to buy and sell large amounts of crypto due to high trading volumes.

Cons:

  • Hacking Risks: Since exchanges hold large amounts of crypto, they are prime targets for hackers. If they get into any trouble, your crypto could be gone forever.
  • Custodial Nature: You do not have direct control over your private keys. The exchange holds them on your behalf, which means you have to trust their security.
  • Withdrawal Limits: Exchanges often impose limits on how much you can withdraw daily or monthly.

Read Also: Common Mistakes to Avoid When Using Crypto Exchanges

2. Store Crypto on Mobile Wallets

Mobile wallets are smartphone apps that allow users to store, send, and receive cryptocurrencies directly from their mobile phones. These wallets provide a convenient way to access and control your coins on the go.

Some of the best and most popular mobile wallets include Trust Wallet, Coinbase Wallet, and Exodus.

How to Get Started

  1. Download and Install: Go to your device’s app store (Google Play Store or Apple App Store). Search for the mobile wallet you wish to use, then download and install the app.
  2. Set Up: Open the app and follow the instructions to create a new wallet. The wallet will generate a seed phrase (a series of 12-24 words used to recover your wallet). Write this down and store it in a safe place, as it is important for recovering your wallet if you ever lose access to your device. Then confirm the seed phrase by entering it in the correct order when prompted by the app.
  3. Adding Funds: To add crypto to your wallet, use the “Receive” feature to generate your wallet address. You can share this address with a sender or transfer crypto from your exchange or another wallet.

Pros and Cons

Pros:

  • Accessibility: Mobile wallets allow you to manage your cryptocurrencies anywhere, anytime, as long as you have your smartphone.
  • User-Friendly: They are designed with easy-to-understand interfaces, making them suitable for beginners.
  • User Control: Unlike exchanges, mobile wallets give you control over your private keys, reducing reliance on third parties.

Cons:

  • Security Risks: Mobile devices are vulnerable to malware, phishing attacks, and physical theft.
  • Device Dependence: If your device got lost, stolen, or damaged, accessing your funds can be impossible unless you have a backup of your seed phrase for restoration.

Read Also: How to Recover a Crypto Wallet: A Beginner’s Guide

3. Store Crypto on Hardware Wallets

Hardware wallets are physical devices designed specifically to securely store your cryptocurrencies offline. These wallets are considered the safest way to store crypto because they are not connected to the internet and so, are not vulnerable to hacking.

The most popular hardware wallets include Ledger and Trezor.

How to Get Started

  1. Purchase: Buy a hardware wallet from a reputable source, such as the official website of Ledger or Trezor. Avoid buying from third-party sellers to ensure the device has not been tampered with.
  2. Setup: Unbox the device and connect it to your computer via USB or Bluetooth (if supported). Follow the manufacturer’s instructions to initialize the device, which typically involves setting up a PIN code. The device will generate a recovery seed (usually 24 words). Write this down and store it securely, as it is important for recovering your wallet if the device is lost or damaged.
  3. Transferring Funds: Install the necessary software or browser extension (e.g., Ledger Live for Ledger devices or Trezor Suite for Trezor devices) to manage your wallet. Use the software to generate receiving addresses and transfer your crypto from an exchange or another wallet to your hardware wallet.

Pros and Cons

Pros:

  • Superior Security: Hardware wallets offer the highest level of security by keeping private keys offline and out of reach from hackers.
  • User Control: Complete control over your private keys, ensuring that only you can access your funds.

Cons:

  • Cost: Hardware wallets can be expensive, with prices ranging from $50 to $200 or more.
  • Complex Setup: The initial setup process can be difficult and time-consuming for beginners.
  • Less Convenience: Not ideal for frequent transactions due to the need to connect the device to a computer or mobile device.

Additional Resources:

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How to Store Your Crypto Safely: Best Ways

DISCLAIMER:

The information provided here is intended for informational purposes only and should not be solely relied upon for making investment decisions. It does not constitute financial, tax, legal, or accounting advice. Additionally, I strongly recommend that you only invest in cryptocurrency an amount you are comfortable with potentially losing temporarily.

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