Control and manage your crypto by self custody
It is best for crypto owners to learn how to store their own crypto. Hardware wallets offer the best security for crypto. Browser wallets are a close alternative.
It's true 'not your keys not your coins'. If someone else or an entity holds the private keys to your crypto assets they own your crypto. Two, they are responsible for the security of your crypto. Not holding your keys exposes you to two types of risks:
Complete or partial loss of your crypto assets.
Your crypto custody service might freeze certain assets from easy/immediate withdrawals or sell transactions. These actions may be undertaken in times of high volatility.
Most crypto holders keep their crypto on centralized crypto exchanges. Under such an arrangement, there is always a risk that you could lose access to your assets under certain conditions. Your crypto custodian might,
Be hacked resulting in loss of all or some of their crypto assets in their management.
Compelled by authorities to confiscate your crypto.
Just this year, the Canadian government wanted to compel all crypto exchanges to freeze accounts of the trucker riots.
Goes insolvent as a result of exposure to risky investments, crypto heists, or poor management.
Freezes your account due to reasons that have nothing to do with legal/political compulsion
What is a crypto address
A crypto address is a location on the blockchain that is identifiable by a pair of keys; private and public keys.
A crypto wallet enables an investor to store their private and public keys. Users can also send and receive digital assets from their crypto wallet, monitor their balance, and interact with diverse blockchains. Crypto users need to have a crypto wallet to monitor their cryptocurrency funds and keep them safe.
What are public keys?
Public keys are a hash id that identifies a digital address on a blockchain.
What are private keys?
Private keys are unique tokens that prove ownership of a crypto address. They are used to authorize the transfer of funds from a crypto wallet. Anyone with access to their private keys can drain funds from their wallet. Unless the address has a multi-sig setup and doesn't meet the minimum criteria for signing.
Types of Crypto wallets
There are numerous crypto wallets that users can choose from. These wallets have their differences depending on their setup, security levels, and type.
There are two main types of crypto wallets 1. hot wallets and 2. cold wallets.
What are hot wallets?
Hot wallets are crypto wallets that are always contented to the internet. Their always online state helps their owners access it at their convenience. Good examples of hot wallets include browser wallets, mobile wallets, desktop wallets, and exchanges.
A hot spending wallet is usually used to store a small or sizeable amount of cryptocurrency for spending and street money. The hot spending wallet can be stored digitally, usually on a mobile device.
On the contrary, the cold savings wallet is ideal for holding most of a user's crypto assets, and they use it to reload the hot wallet. The cold wallet is usually stored offline since it is not linked to the internet, enabling users to keep their assets offline. Users can still access funds whenever they need to, but they cannot transfer them out.
What are cold wallets?
Cold wallets are hardware wallets usually stored offline and include offline data storage devices and physical bearer commodities like physical cryptocurrencies.
Cloud wallets are online wallets and are usually hot. They enable users to access funds from any electronic device or location. Cloud wallets are convenient and would allow users to store their private keys online. They can also be monitored by third parties, making them at risk of attacks and theft.
Software wallets can be downloaded and installed on a personal electronic device such as a computer or smartphone. Software wallets are hot wallets, and they provide a high level of safety; yet, they cannot protect users against viruses and hacks. As such, users should try their best to avoid malware.
Some software wallets enable users to access assets through various devices simultaneously, including hardware wallets, computers, and smartphones.
|Daedulus wallet||hot wallet||desktop (macos, Win)|
|Yoroi wallet||hot wallet||browser & mobile|
|Nami Wallet||hot wallet||browser|
|Eternl (previously CCvault) wallet||hot wallet||browser|
|Gero Wallet||hot wallet||browser|
|Typhon wallet||hot wallet||browser|
|Phantom Wallet||hot wallet||browser, mobile|
|StrikeX||hot wallet||browser, mobile|
|Trust Wallet||hot wallet||mobile|
Hardware wallets help users to store their private keys on an external storage device such as a USB-like device or a totally air-gapped device. These wallets are completely cold, safe, and essential when making online transactions. Some hardware wallets are well suited to diverse web interfaces and are compatible with different crypto assets.
These wallets are designed to facilitate effective transactions. All a user needs to do is link the wallet to an online device, unlock it, send assets, and approve a transaction. Hardware wallets are one of the safest means of securing cryptocurrency assets.
To use hardware wallets users need to purchase the devices first
Hardware wallets comparison
|Hardaware Wallet||Supported Platforms||Supporteds assets||Connectivity||Price|
|Ledger Nano X||Windows, Linux, Mac, Android & iOS||5500+ (depends on app size)||Bluetooth, USB-C||$149|
|Trezor Model T||Windows, Linux, Mac & Android||1000+||USB-C||249 EUR|
|Trezor Model One||Windows, Linux, Mac & Android||1000+ coins||micro USB||$73 (69 Euros)|
|Ledger Nano S Plus||Windows, Linux & Mac||5500+ (depends on app size)||USB-C||$79|
|Ledger Nano S||Windows, Linux & Mac||Major coins (has limited space)||USB||discontinued|
|Ellipal Titan||N/A||40 chains & 10,000+ tokens||Air-gapped (no bluetooth, cellular, NFC, wifi or USB)||$149 (bought as bundle)|
|D'cent||iOS & Android||BTC, ETH (25+ crypto)||Bluetooth, USB||$119|
|BitBox||Windows, Linux, Mac & Android||BTC only||USB-C||129 Euros|
|Safepal S1||Android & iOS||34 blockchains & 30,000+ tokens||air-gapped||$50|
When to keep crypto on an exchange
There are instances when keeping your crypto on an exchange might be a good idea.
- If you're actively trading your crypto
- Want to sell
- When certain coins are not supported by a hardware wallet and have poor wallet support.
First published on Mar 19, 2022