Digital money is hard to make and easy to lose. A single wrong step can cost you too much. Do not want this to happen to you? Keep reading. In this post, we tell you where it is best to keep your coins so as not to lose them by mistake or due to intruders.
How to ensure 100% Safety of Your Money?
In the crypto industry, the hold strategy is a widespread thing. Investors buy coins for the long term and then exchange bitcoin to euro depending on market fluctuations. But digital money is easy to lose, even without making risky deals. So one of the main questions users have is how to store digital assets safely. There are several ways, and each of them has its pros and cons.
#1 — Cryptocurrency Exchange
The easiest and most understandable way to store cryptocurrency is to keep it on the exchange. When creating an account, each user has his own wallet. It supports all the coins that are traded on the site and provides quick access to them. One of the advantages of this option is the ability to easily restore access to your account and run any sell-buy operations in a matter of a few clicks.
#2 — Hardware Wallet
The safest way to store crypto units is to use hardware wallets (utilities that often look like a USB flash drive). Although the solutions are just great, not everything is so simple. You need to be extremely careful and use only trusted and secure hardware wallets. Despite the risk of hacker attacks and intruders, this method is still considered reliable. To hack a hardware wallet, the criminals need to get physical access to the wallet. If it is stored in a safe place, then the risk can be minimized.
Besides that, when choosing a hardware wallet for storing your funds, you need to remember that the loss of a PIN code will lead to the loss of cryptocurrency. Another nuance of hardware wallets is the ability to lose or spoil the device physically. For example, children or a dog can break it at home.
#3 — Online Wallets
This method is similar to storing digital money on an exchange. It is an extremely convenient but unsafe way. You need to be extremely careful not to keep a large amount of funds in your online wallet.
Depending on the approach to storing private keys, online wallets can be of hybrid and traditional types. Wallets of the first type use separate storage of keys using multi-signature; the second option presupposes that private keys are kept online, and only a backup copy is available to the user.
#4 — Local Wallet
A universal way to store funds is a local wallet. These are applications for PCs or mobile devices, browser extensions, etc. Finding such a wallet is easy: just go to the official website of the project and download the appropriate version. But there are a couple of things to remember if you are going to use local wallets.
The mobile option is suitable for those who need constant access to their coins for transactions. But the cryptocurrency will not be stored on the smartphone, so it can only be accessed if the Internet is available. Even if the device is lost, digital money can be returned.
A local wallet on a PC makes sense only for coins that use Proof of Stake in their algorithm. To store monetary assets in this way, you need to completely download the blockchain of the selected asset. And it can weigh tens or hundreds of GB. In the case of PoS, as long as there is some amount of digital money in the wallet and the PC is turned on, the user is charged a certain amount of digital money on the balance. Keep it in mind if you decide to go with the solution.