The cryptocurrency space is a complex and high-risk one but full of rewards. In recent years, there has been a rise in crypto scams and other fraudulent activities, as well as market volatility, with regulators still trying to develop a policy framework. Unsurprisingly, over 46,000 people have been victims of crypto scams, leading to more than $1 billion in losses. If you are a beginner, this shouldn’t scare you from investing in crypto. There are actionable steps you can take to safeguard your investment. Here are the safest ways to store your cryptocurrency in 2024 and avoid losses.
Crypto Exchanges
These online platforms provide crypto traders a safe haven to buy and sell cryptocurrencies in exchange for crypto tokens, fiat currencies, or cash. As a user, you have to create an account with your preferred crypto exchange platform, Complete its KYC requirements, and deposit funds to buy Bitcoin or any other digital currency.
Two types of crypto exchanges exist. The first is a centralized crypto exchange (CEX), also referred to as a custodial wallet, which operates like a bank setup. With CEX, you give the exchange platform complete control over your stored digital assets, transactions, and private keys. The second option is a decentralized crypto exchange (DEX), also called a non-custodial wallet, which uses blockchain technology to boost the security of your trading. DEXs don’t involve third parties, as sellers and buyers trade crypto directly to one another. Users have complete control of their private keys.
Cold Wallet Storage
Cold wallet storage involves storing digital currencies in offline wallets that leverage physical hardware devices. These can be smart cards or a USB drive that can store your public and private keys. Cold wallets are often ideal for the long-term storage of vast amounts of digital currency. They are portable, easy to use and help safeguard your cryptocurrencies from online vulnerabilities as they have robust immunity to online hacking attempts.
Buying cold wallet storage directly from the manufacturer is advisable to guarantee robust security and avoid tampered devices. Consider choosing a portable device with effortless Bluetooth connectivity. Keep the device in a safe place, as you can lose your funds permanently if it is damaged, misplaced, or lost.
Hot Wallet Storage
Hot Wallet Storage features online software for monitoring, storing, sending, and receiving crypto assets. Similar to online banking, this storage option enables you to access your private and public keys and crypto wallet through desktops, laptops, tablets, and smartphones linked to a steady internet connection. You can only access your crypto wallet once you are online.
Hot wallets are often free or low-cost, providing a practical balance between accessibility and security. They are your go-to solution for daily use and regular transactions. However, you have to develop mechanisms to protect your assets from potential cyber threats, such as phishing and hacking.
Paper Wallet Storage
Paper wallets provide a simple, inexpensive, yet robust way to secure digital money by printing your public and private keys physically on paper. This storage method offers a high level of security while eliminating online hacking risks.
Develop your paper wallet using a trusted and secure generator site, send your crypto to the paper wallet, and store it in a safe, fireproof, and waterproof location to guarantee the long-term safety of your investment.
Each cryptocurrency storage option provides a different level of convenience, security, and cost. To choose the ideal solution, consider your personal needs, frequency of use, and the amount of digital money you want to store. Make security a priority, especially if you aim for long-term investments or want to store huge crypto amounts.
