Storing your Bitcoins and Altcoins Safely

Bitcoin paper and hardware wallets.

There’s an old saying in the crypto community that if you don’t own your keys, you don’t own your cryptocurrencies.
In essence, that single statement summarizes the issues with cryptocurrency exchanges.

Exchanges are centralized platforms that are designed to facilitate transactions; they’re not banks.

While large exchanges like Binance, Coinbase and others have come a long way in terms of their security measures,
you’re effectively outsourcing security to a third party rather than ensuring your funds are secure on your own.

That’s where hardware wallets and paper wallets come in.

A Paper Wallet is considered to be one of the safest methods to save your coins (generally known as cold storage).

With a paper wallet, your public and private keys are printed on paper, making your passwords offline. When you follow the instructions for using a Paper Wallet, it will be next to impossible for your coins and tokens to be stolen.

With paper wallets, you can check your balance at any time using blockchain.info or coin explorer (just type your public key into the search box). And most online wallets allow you to import your paper wallet data.

To spend that bitcoin or any other cryptocurrency, you will be asked to type in the private key information, or scan the private key QR code (sometimes called the “spend” QR code).

A hardware wallet is a physical device that’s used for storing your private keys securely away from anyone who’s not the primary user.

These physical devices store your private key(s) in an encrypted offline environment, meaning your wallet won’t be vulnerable to the types of attacks carried out against exchanges and even regular people using software wallets (a wallet on your computer or phone connected to the internet, also known as a “hot wallet”).

Investors have a variety of options for offline storage, including an air-gapped computer or paper wallet, but those have their own limitations. Fortunately, with the advancement of the cryptocurrency industry came many companies specializing in creating dedicated hardware for storing cryptocurrencies securely.

There’s a good chance you may have already heard some of the bigger names like Trezor, Ledger Nano S, and KeepKey.
All three are great wallet options and are designed to be user-friendly.

Additionally, all three of the big names (along with other manufacturers) support multiple cryptocurrencies so you’ll be able to store your bitcoin, ether, and numerous tokens all in one place.

You can think of keeping your cryptocurrencies on an exchange as effectively having an “IOU,” not the crypto itself.

If something happens to an exchange, micro wallets or hosted wallets your crypto is gone, whether that be due to a hack, scam, or unforeseen problem with the team managing the services.