The cryptocurrency market has snowballed in recent years. The cryptocurrency’s global market value has reached USD$1,782 billion in 2021 and is expected to increase to USD$32,420 billion by 2027 at a compound annual growth rate of 58.4%.
One thing that sets cryptocurrency apart from the conventional fiat money system is that it has no central authority like the banks and governments. This means no one is overseeing the production and use of digital currency. Nobody—including the traditional financial infrastructures—can determine the flow and value of the coin. Hence, it’s stable and secure compared to fiat currency controlled by central authorities.
However, note that the cryptocurrency market is still in its infancy, with high volatility, few regulations, and a breeding ground for hackers and scammers. And that’s why it’s critical to find a safe place to Store Crypto Currencies. While you may think of simply keeping your cryptocurrency on exchange services, it’s better to choose other far more secure and safe wallet options that allow you to store your digital currency.
That said, read further to know what a crypto wallet is and the best ways to Store Crypto Currencies.
What Is A Crypto Wallet?
A crypto wallet is an app that Store Crypto Currencies like Ethereum and Bitcoin. Instead of physical items like cards and cash, it keeps your private keys secure, allowing you to send and receive cryptocurrency. Moreover, there are various types of crypto wallets, and some well-known wallets are hardware wallets, online wallets, and paper wallets.
The private keys of hardware wallets are in a thumb-drive device that resembles a Universal Serial Bus (USB) drive. On the other hand, online wallet keys are software and applications installed on a laptop or desktop computer. In terms of paper wallets, the keys are written or typed on paper, making it more difficult for hackers to access.
Unlike ordinary wallets, crypto wallets store your assets on the blockchain, and you can only access them with a private key. The keys validate crypto ownership and allow you to send and receive digital currency.
Best Ways To Store Crypto Currencies
1. Store Crypto In Cold Storage
Storing your crypto in cold storage options means removing your keys from your crypto wallet and keeping them in a place that’s not connected to the internet. Since it’s a way of storing cryptocurrency offline, it provides higher security and protection against cyberattacks. Cybercriminals won’t be able to access your crypto so long as it’s not connected to any network.
Accordingly, it’s an excellent way to store crypto in cold storage as they offer the same ease of use, access, and functionality as digital wallets. Furthermore, cold wallets provide a higher level of protection and security compared to digital wallets.
Besides hardware and paper wallets, the other popular types of cold storage are USB drives and Sound Wallets. Storing your crypto in a traditional USB flash drive is a good alternative if you can’t afford a hardware wallet. But note that this won’t be able to provide the same level of security and protection as a hard wallet does.
Additionally, a Sound Wallet allows you to record your private key onto a compact disc in an encrypted manner. That way, when other listeners play the disc, they’ll only hear static noise. When decrypting the key, you’ll use a spectroscope application.
2. Store Crypto Currencies In Hot Wallets
A hot wallet is also known as a crypto wallet. It’s a type of digital storage that you can access through your mobile device or computer connected to the internet. Even though hot wallets aren’t as secure as cold storage options, these are still better than storing your crypto on exchange platforms. They’re also user-friendly and provide a streamlined process of transferring cryptocurrency back to cash out your holdings or complete more trades.
Furthermore, there are three types of hot wallets: desktop wallets, mobile wallets, and online wallets. Desktop wallets are applications installed on your laptop or desktop computer. You can use this wallet offline to export files with encrypted private keys. It only connects to the internet when processing transactions.
Moreover, mobile app wallets are similar to desktop wallets. But they’re for smartphones. They offer convenience to users as they feature quick response (QR) codes for transactions. In addition, web wallets are another popular type of hot wallet. You can access them using a web browser without downloading software or applications.
3. Store Crypto In Multi-Signature Wallets
Multi-signature wallets, or MultiSig Wallets, are digital wallets that need multiple cryptographic signatures. That means they require more private keys to sign and send crypto transactions. The main benefit of using a multi-signature wallet is that it allows multiple users to sign various documents in unison. Unlike other digital wallets that only need one signature for signing transactions, a MultiSig wallet is different as all transactions with this crypto wallet require signatures from all users.
Moreover, when keeping crypto using a multi-signature wallet, you must create and sign a transaction to send funds to your crypto wallet. In essence, the signature implies your confirmation and approval of the transaction.
Overall, cryptocurrency comes with different wallets and storage options. Choosing how to Store Crypto Currencies is crucial as it’s vulnerable to cryptocurrency theft. Hence, consider the methods above to ensure the safety of your cryptocurrency.