How To Store Cryptocurrencies Safely

[Bit talk]

Holding a cryptocurrency position on an exchange is not safe.
In January 2018, Coincheck, a Japanese cryptocurrency exchange, was hacked and $530 million worth of cryptocurrencies were stolen. This is just the most recent notable hack in a series of exchange security breaches:
Mt. Gox was hacked for $460 million in March 2014
Bitfinex was hacked for $72 million in August 2016
Bittgrail was hacked for $170 million in February 2018

Storage Options
The default storage option after purchasing a cryptocurrency is to leave it hosted on an exchange. This is convenient because the exchange does the work of managing your public and private keys and gives you an email and password login (hopefully backed by two factor authentication), which is familiar and convenient. This convenience is nice, but it also means that the safety of your coins relies upon the security of the exchange. While exchanges are continuing to improve security, there will always be serious security risks in leaving coins hosted on an exchange.

Here are better alternatives to leaving coins on an exchange:
>>Hardware wallets: This type of storage refers to a physical device that is offline and manages private keys, a form of cold storage. Hot storage refers to methods connected to the internet (like hosting on an exchange or other website) while cold storage is not connected to the internet. Hardware wallets are a relatively recent development but so far there have not been any verifiable incidents of cryptocurrencies being stolen from hardware wallets and they are regarded as the safest option for storing cryptocurrencies. Two popular hardware wallets are the Ledger Nano S and TREZOR.

>>Paper Wallets: Like hardware wallets, paper wallets are a form of cold storage and host coins offline. A paper wallet is a print out of public and private keys and can be implemented via QR codes. It is recommended that paper wallets are backed up by at least one other copy and stored in a safe location, like a safe deposit box (keeping the private key safe is crucial). In this case, physical access is total access and anyone who gains access to your paper wallet can take your holdings. MyEtherWallet is a popular paper wallet for Ethereum and ERC20 tokens.

>>Desktop Wallets: As the name suggests, desktop wallets are software clients that are downloaded and run from the desktop. While desktop wallets are safer than holding coins on an exchange, being indirectly connected to the internet creates the opportunity for security to be compromised (this is a form of hot storage, which is less secure than cold storage).
>>Mobile Wallets: Like desktop wallets, the name makes the arrangement clear — mobile wallets are applications that are hosted on a mobile device. Just as a desktop wallet can be breached, a mobile wallet may also be hacked (this is a form of hot storage, which is less secure than cold storage).

Conclusion
Be careful managing the storage of your coins and do not hold significant positions on an exchange. Never give anyone your private key. If possible, implement cold storage via a hardware wallet or paper wallet. As always, be mindful of phishers and scammers online and verify any/all URLs before transacting.


                                         

[1715369581]

1715369581

[bitChipper]

Would just like to add that if you are storing ETH or ERC20 tokens offline just with a private key that it is very insecure to be pasting your private key into MEW or My Crypto.

We have seen with the recent DNS attack on MyEtherWallet that this method can be risky, the best alternative is to get a hardware wallet like trezor or ledger nano that will connect with MEW/Mycrypto and then you sign and send transactions from the device and not pasting any private key into a website.

If you dont have hardware wallet or cant afford one, always make sure that the SSL certificate is valid in the top left of your browser before pasting priv key into mew of mycrypto.

[Crypto Debate]

Realy big thank you for this post because more peoples facing this issue so its help for every one for how to Cryptocurrencies Safely   

[Wind_Crypto]

thanks for the good summary. i myself use a hardware wallet, have also heard that metamask itself it rather safe, but might want to surf the net a bit more for info to be sure...

[StevenPop]

This is really great advice and there really is nothing much that can be added to it. I like at the end how you added that people should never store a significant amount of coins in exchanges because a lot of people make this mistake using exchanges as wallets

[Crypto_Train]

This is really great advice and there really is nothing much that can be added to it. I like at the end how you added that people should never store a significant amount of coins in exchanges because a lot of people make this mistake using exchanges as wallets

I will have to disagree with you soon. I seen that Blockbid exchange that is in beta testing is one of the first to be fully covered by cybersecurity insurance.

But they're not decentralized as they're fully compliant with the AML/CTF guidelines outlined by AUSTRAC (Australian Digital Currency Agency).

I feel once the exchange is up and running and knowing that what coins you have on there will be insured if it gets hacked, it will be a safer option.

But if you like to control it in a decentralized way then the option the OP gave are spot on.

[8rch7]

yes I agree, storing crypto in the long term on the wallet of exchange is very risky. sometimes a lot of exchange that suddenly got hacked attack or exposed baned by local government.

[chris200x9]

This is really great advice and there really is nothing much that can be added to it. I like at the end how you added that people should never store a significant amount of coins in exchanges because a lot of people make this mistake using exchanges as wallets

Another important thing is you need to secure your PC or desktop with a good antivirus software not with a pirated version because these hackers always come with new viruses so if you have an original antivirus software you can get updates directly and your PC will be updated for the new virus attacts. Many people neglect this part and that's why some of the viruses can enter into your PC.

[ruslan4040]

The only way in taht you can really store your crypto is if you have a hardware waller, or at least, a very good and protected wallet that is almost unhackable because of the high encryption that it has in there.

[batang_bitcoin]

The only way in taht you can really store your crypto is if you have a hardware waller, or at least, a very good and protected wallet that is almost unhackable because of the high encryption that it has in there.

If you'll consider the situation, there are crypto holders that can't avail to purchase a hardware wallet so that's already mentioned my OP that they can use desktop wallets / mobile wallets.

I will have to disagree with you soon. I seen that Blockbid exchange that is in beta testing is one of the first to be fully covered by cybersecurity insurance.

Still an exchange is an exchange so if its your money and you are good for storing large amount of money there, it's up to you. But the warnings has been spread in the community that don't put much crypto in exchanges that you can't avail to lose.

[BIT WRLD]

Thank you for this great knowledge sharing to in Bitcoin Forum, its help us lot

[boakyei]

A reputable exchange will be hard to hack and they will do anything to protect their customers funds. If you trade consistently, they won't be any day you can't leave your money on an exchange. But if you dose, ensure your private key is secured and the exchange allows you to use an authenticator as additional security.

[PHI1618]

I use a hardware wallet. I've been a Ledger user for 1 year. I store all the coins it supports. I am very pleased. I also used Trezor and bitbox Wallets. But Ledger is still my favorite.
I always use coin's own wallet if it does not support by Ledger.

[Crypto_Train]

The only way in taht you can really store your crypto is if you have a hardware waller, or at least, a very good and protected wallet that is almost unhackable because of the high encryption that it has in there.

If you'll consider the situation, there are crypto holders that can't avail to purchase a hardware wallet so that's already mentioned my OP that they can use desktop wallets / mobile wallets.

I will have to disagree with you soon. I seen that Blockbid exchange that is in beta testing is one of the first to be fully covered by cybersecurity insurance.

Still an exchange is an exchange so if its your money and you are good for storing large amount of money there, it's up to you. But the warnings has been spread in the community that don't put much crypto in exchanges that you can't avail to lose.

The warnings that are spread around the community are because most exchanges have no insurance if that exchange was hacked. These warning are correct and should be listened too.

BUT,
With all the exchanges security against hacking, as well as been fully insured that if it does get hack your coins are returned, then yes when blockbid is up and running it will be way more secure and safe.

[Ciucas]

I think that from all the methods presented, the Hardware Wallets like Trezor or Ledger are the best possible way to store the cryptocurrencies safely. I've never heard someone who used this method to get hacked yet. I've just read a story about one guy who forgot his PIN, and lost his seed that managed to hack his own Ledger Nano S, and he got his PIN number displayed, but i'm not sure if this is a true story or not.

[iconoclast]

My strategy is not to store my cryptocurrency all in one place. I have my coins spread around over 10 different places that way if one of them gets compromised I won't lose more than 10% of holdings. I also think it is really stupid to give a lot of details about how you store your crypto on public boards like this one.

[iconoclast]

I think that from all the methods presented, the Hardware Wallets like Trezor or Ledger are the best possible way to store the cryptocurrencies safely. I've never heard someone who used this method to get hacked yet. I've just read a story about one guy who forgot his PIN, and lost his seed that managed to hack his own Ledger Nano S, and he got his PIN number displayed, but i'm not sure if this is a true story or not.

I also heard how someone bought a second hand Hardware Wallet on ebay and the original owner was able to steal all his coins.

[siggy]

Holding a cryptocurrency position on an exchange is not safe.
In January 2018, Coincheck, a Japanese cryptocurrency exchange, was hacked and $530 million worth of cryptocurrencies were stolen. This is just the most recent notable hack in a series of exchange security breaches:
Mt. Gox was hacked for $460 million in March 2014
Bitfinex was hacked for $72 million in August 2016
Bittgrail was hacked for $170 million in February 2018

Storage Options
The default storage option after purchasing a cryptocurrency is to leave it hosted on an exchange. This is convenient because the exchange does the work of managing your public and private keys and gives you an email and password login (hopefully backed by two factor authentication), which is familiar and convenient. This convenience is nice, but it also means that the safety of your coins relies upon the security of the exchange. While exchanges are continuing to improve security, there will always be serious security risks in leaving coins hosted on an exchange.

Here are better alternatives to leaving coins on an exchange:
>>Hardware wallets: This type of storage refers to a physical device that is offline and manages private keys, a form of cold storage. Hot storage refers to methods connected to the internet (like hosting on an exchange or other website) while cold storage is not connected to the internet. Hardware wallets are a relatively recent development but so far there have not been any verifiable incidents of cryptocurrencies being stolen from hardware wallets and they are regarded as the safest option for storing cryptocurrencies. Two popular hardware wallets are the Ledger Nano S and TREZOR.

>>Paper Wallets: Like hardware wallets, paper wallets are a form of cold storage and host coins offline. A paper wallet is a print out of public and private keys and can be implemented via QR codes. It is recommended that paper wallets are backed up by at least one other copy and stored in a safe location, like a safe deposit box (keeping the private key safe is crucial). In this case, physical access is total access and anyone who gains access to your paper wallet can take your holdings. MyEtherWallet is a popular paper wallet for Ethereum and ERC20 tokens.

>>Desktop Wallets: As the name suggests, desktop wallets are software clients that are downloaded and run from the desktop. While desktop wallets are safer than holding coins on an exchange, being indirectly connected to the internet creates the opportunity for security to be compromised (this is a form of hot storage, which is less secure than cold storage).
>>Mobile Wallets: Like desktop wallets, the name makes the arrangement clear — mobile wallets are applications that are hosted on a mobile device. Just as a desktop wallet can be breached, a mobile wallet may also be hacked (this is a form of hot storage, which is less secure than cold storage).

Conclusion
Be careful managing the storage of your coins and do not hold significant positions on an exchange. Never give anyone your private key. If possible, implement cold storage via a hardware wallet or paper wallet. As always, be mindful of phishers and scammers online and verify any/all URLs before transacting.


                                         

I think that Coinomi is a good way to keep your money safe. It is a multi-currency wallet on Android, very useful and convenient. If you didn't have a hardware wallet, it is the best solution for you.

[bakery506]

I agree with your final conclusion! Most ordinary investors have their money stolen because they don't store their private keys correctly, or because they don't carefully identify the Internet address! I hope they can see and change their ways.

[saganpav]

Holding a cryptocurrency position on an exchange is not safe.
In January 2018, Coincheck, a Japanese cryptocurrency exchange, was hacked and $530 million worth of cryptocurrencies were stolen. This is just the most recent notable hack in a series of exchange security breaches:
Mt. Gox was hacked for $460 million in March 2014
Bitfinex was hacked for $72 million in August 2016
Bittgrail was hacked for $170 million in February 2018

Storage Options
The default storage option after purchasing a cryptocurrency is to leave it hosted on an exchange. This is convenient because the exchange does the work of managing your public and private keys and gives you an email and password login (hopefully backed by two factor authentication), which is familiar and convenient. This convenience is nice, but it also means that the safety of your coins relies upon the security of the exchange. While exchanges are continuing to improve security, there will always be serious security risks in leaving coins hosted on an exchange.

Here are better alternatives to leaving coins on an exchange:
>>Hardware wallets: This type of storage refers to a physical device that is offline and manages private keys, a form of cold storage. Hot storage refers to methods connected to the internet (like hosting on an exchange or other website) while cold storage is not connected to the internet. Hardware wallets are a relatively recent development but so far there have not been any verifiable incidents of cryptocurrencies being stolen from hardware wallets and they are regarded as the safest option for storing cryptocurrencies. Two popular hardware wallets are the Ledger Nano S and TREZOR.

>>Paper Wallets: Like hardware wallets, paper wallets are a form of cold storage and host coins offline. A paper wallet is a print out of public and private keys and can be implemented via QR codes. It is recommended that paper wallets are backed up by at least one other copy and stored in a safe location, like a safe deposit box (keeping the private key safe is crucial). In this case, physical access is total access and anyone who gains access to your paper wallet can take your holdings. MyEtherWallet is a popular paper wallet for Ethereum and ERC20 tokens.

>>Desktop Wallets: As the name suggests, desktop wallets are software clients that are downloaded and run from the desktop. While desktop wallets are safer than holding coins on an exchange, being indirectly connected to the internet creates the opportunity for security to be compromised (this is a form of hot storage, which is less secure than cold storage).
>>Mobile Wallets: Like desktop wallets, the name makes the arrangement clear — mobile wallets are applications that are hosted on a mobile device. Just as a desktop wallet can be breached, a mobile wallet may also be hacked (this is a form of hot storage, which is less secure than cold storage).

Conclusion
Be careful managing the storage of your coins and do not hold significant positions on an exchange. Never give anyone your private key. If possible, implement cold storage via a hardware wallet or paper wallet. As always, be mindful of phishers and scammers online and verify any/all URLs before transacting.


                                         

Yes, you are right to safely keep your coins in stock exchanges. Now very often break wallets. I think the best way to completely protect yourself from fraudsters is to buy a hardware wallet. I think this is the safest way to keep your coins.