How to safely store cryptocurrency?

The principle of storing cryptocurrency is in two codes: the public address of the wallet (for receiving cryptocurrency) and the private key from it (for signing transfers).

What are the ways to store crypto assets, and which one is the most secure?

Cold storage of cryptocurrency

In this case, assets are stored in the form of codes in a special crypto-registry - blockchain. These records can only be taken over by the person who has the private key. The cherished character set is the key to all digital media.

Differences between cold storage and hot storage

Hot storage is online wallets and exchanges. They are convenient and intuitive: login, password, everything is as usual. But this type of storage is more vulnerable and fraught with hacks, because all your funds will be stored on the servers of the company that created the wallet.

Cold storage puts all the responsibility on the shoulders of that owner of the funds. Whoever has the key is the owner.

Varieties of cold crypto wallets

Since the advent of the first Bitcoin cryptocurrency, many wallets have appeared on the market. Only you can choose which features and ways to access digital tools suit you.

Hardware Wallet

This is a special crypto carrier in the form of a USB flash drive. All private files are created inside a secure "hardware" environment. This form of storage is considered one of the most secure due to encryption and physical features: the wallet cannot be stolen via the Internet, it is actually in your hands.

These wallets are usually used to store large amounts. In this case, making frequent transfers is not very convenient: the wallet must be constantly connected to the computer.

In addition, there is a risk of flash drive failure, software failure or physical loss of the wallet.

Paper note

This is the most common paper sheet with a public address and a private key written on it, which are available only to you.

The advantage of this method is complete independence from the Internet and the impossibility of remote hacking. It is recommended to store several copies of the keys in different places to prevent loss of paper media. In this case, you just need not to "shine" your numbers anywhere.

USB drives

USB flash drives can be combined with standard crypto storage applications. First, the user installs the application on his computer, and stores all identification data on a USB flash drive: address and key.

Thus, hacking and theft of a private key is excluded, but there are all the risks that typical USB flash drives have: breakage, loss, virus, etc.

PC wallets

These are typical repositories in the form of an application on a computer. They are of two types:

"Fat" — in this case, the entire blockchain is downloaded to the computer and synchronized, which requires more than 500 gigabytes of free space.

"Thin" — the blockchain remains on the Internet and is not downloaded to a PC. This method is faster but less reliable.

How to choose the right crypto wallet

So which cryptocurrency storage method should you choose?

Hardware

Advantages: Data protection and burglary resistance. Even if the device gets to intruders, without a pin code and password, they will not be able to use it.

Disadvantages: High price and risk of breakage with the loss of all data.

Paper

Advantages: Full autonomy of private key storage.

Disadvantages: If the paper is physically destroyed or lost, access to the cryptocurrency will also be lost. This option is not well suited for frequent operations with coin transactions.

Removable drives

Advantages: Small cost of a USB flash drive, convenient for everyday payments. Storage without Internet access.

Disadvantages: No data encryption.