Fantastic, you’re looking to buy or have just bought your first lot of bitcoin (or satoshi) or cryptocurrency. What’s next? You’re looking to safely store it away from hackers and harm but you’re not sure where to start.
Never fear, where here to help!
A simple Google search reveals there are many different types of wallets out there. There ‘hardware wallets’ and forms of ‘cold storage’, there are also ‘desktop wallets’, ‘mobile wallets’, and ‘web wallets’. So where to start?
First ask yourself, why do you own crypto and what are you going to do with it?
If the answer is that you’re storing it as a forms of investment or savings, with no intention to quickly spend it or trade, then a cold storage wallet is best for you. How does this work?
First lest start by giving an example with bitcoin. You would know that there are no physical coins. They are digital. But the coins themselves aren’t stored in your wallet, they are simple part of one large blockchain. So you acquire the public and private keys to a wallet on the blockchain which contains the bitcoin you purchased and assigned to that wallet.
So back to cold storage wallets. This means that you can store the information to your private key offline. This can be done by printing it on a piece of paper (be careful about where you print it and the record that was left) or better yet punched into steel (e.g. ColdBit). The latter of these is better as it proves a far greater amount of protection against fire. Now if you have large quantities of bitcoin, you hear people may wish to split their keys. A good way is to use a 24 word seed phrase with a unique 25th word. The 24 word seed can then be split into three seperate punch plates. For examples words 1-16 on the first, 9-24 on the second, and 1-8 & 17-24 on the third. Then the three can be spaced out between two independent safety deposit boxes and a personal safe. This way only two are required to recover you large amounts of bitcoin and cryptocurrencies. As for the unique 25th word, this can be saved in multiple places such as a password manager and cold.
Another form of cold storage is hardware wallets. These include the likes of Trezor and Ledger. These are great as you can store your keys offline but when you want to transfer your funds you just plug them in via USB and do it instantaneously. With that said, technology can fail and they do come with paper card to record your seed phrase for your private keys, however, it’s best to store on a piece or pieces of stainless steel or titanium as described above.
So you answered that you want to spend or trade your bitcoin and crypto. Even if you are storing it longterm it is still good to have a hot software wallet on hand. There are many available, ones directly for your desktop or web browser. These are fantastic as you can just request and transfer funds rapidly.
So what wallet brand or brands do you choose? We suggest going with what is recommended by the developers of your favorite crypto. For maximum security we highly recommend both a hardware wallet (Ledger or Trezor) along with engraved or punched metal. As for software-based wallets, just be sure read that your keys are kept off their services and completely remain with you. Open source wallets can also be checked by the community that this is indeed the case.
So we hope that helps you with selecting your wallet/s. All the best with your investments and remember stay safe and stay secure. Never disclose your seed phrase or private keys with anyone or anything (e.g. photos on a phone).
Good luck and happy investing 🙂