There are a lot of ways you can store your cryptocurrency. They give you different functions and different levels of security. We are here to help you find out what is the best way to store cryptocurrency.
Some people use more than one way of storing their cryptocurrency—different ways for different functions. This gives them the flexibility to do what they want with their crypto.
One way to store your crypto is to keep it in the exchange. Some crypto users would say that you don’t want to store your cryptocurrencies on the exchange platform, but you don’t have to listen to them right away. Keeping your cryptocurrency in the exchange is not bad at all.
For beginners who don’t know a lot about transactions using wallets, especially hardware wallets, storing your cryptocurrencies in exchange platforms is advisable. It has some security risks, but they have their security protocols to handle such risks. Reputable exchange platforms have good security records, so that won’t be that much of a problem. So if you’re researching about what is the best way to store cryptocurrency, this is a good place to check.
If you want to feel that you own your crypto assets, you can always opt into storing them in crypto wallets. Crypto wallets are your personal storage for your crypto. You can choose between hot wallets and cold storage. Hot wallets are connected to the internet for easy access and transactions, while cold storage is not connected to the internet and is solely for storage purposes. Let’s discuss some of the best available crypto wallets.
Software wallets are a type of crypto wallet that you can manage from your computer or your mobile device. Some software wallets are cold storage partnered with a hot wallet, and some are hot wallets alone. Software wallets are suitable for beginner users who are confident enough that they won’t commit user errors, especially in transferring their crypto.
Software wallets that are cold storage are also fairly secure compared to exchange storage. It can only be accessed through your device and only using your private key. Most of the cold storage software wallet comes with a hot wallet where you can transact. Your whole storage still does not connect to any network. The hot wallet connects for the transaction, then passes the transaction to the cold storage wallet locally, where you will confirm the transactions. It will toss the transaction back to the hot wallet as a confirmed transaction to complete the process.
Some software wallets have mobile interfaces so you can transact your crypto on the go. It also feels like a physical wallet because you can carry it with you anywhere you go. Security-wise, it is still like a hot software wallet, it connects to the internet, so it is vulnerable to hacks. Nevertheless, software wallet creators have tons of security layers to prevent this from happening. You can also choose to use the wallets recommended by the crypto asset you have. Just check their website for their recommended wallets.
Regarding costs, most, if not all, software wallets are free. Some of them are also open source. You can modify them to fit what is the best way to store cryptocurrency for you. One thing to look out for is the transaction fees when using these wallets. Some have higher transaction fees than others.
If you are pretty confident with your knowledge and skills about cryptocurrency and storing large amounts of crypto, then a hardware wallet is a good investment for you. Hardware wallets are a type of cold storage. It offers the highest level of security among all kinds of wallets.
Hardware wallets are physical devices that hold your crypto assets for you. It comes with seed phrases for authentication and recovery. You can set it up through the software interface included. Newer models even have the capabilities of connecting to your phone through Bluetooth, so you can still transact on mobile. If security is your priority, this answers the question of what is the best way to store cryptocurrency.
Some hardware wallets can handle up to 100 different crypto assets at a single time. Hardware wallets are also compatible with the highest number of cryptocurrencies, around 1000. You can also manage your other software wallets with your hardware wallet. Hardware wallets are compatible with about 50 different software wallets.
Even hardware wallets have downsides too. It opens the possibility of physical theft to your crypto. If you carry your hardware wallets with you and lose them, it can sometimes not be recovered. That is where the seed phrases come in so you can recover your crypto assets back. Another downside is the cost of buying the hardware wallet itself. It ranges from $55-170 depending on which model you choose. Learn more about cryptocurrency storage here!
In the end, choosing the way you store your crypto depends on you. No one can judge how you store your crypto and decide what is the best way to store cryptocurrency for you. Some people choose to hold it in different methods of storage. Even veterans in crypto have crypto assets on exchange for some purposes. It really depends on what you want to do with your crypto and how you would want to use it.