Welcome to the third part of my series 'How to store your crypto'. This series is all about sharing my insights storing cryptocurrencies in a secure way and hopefully, you won't join the people who have lost crypto due to bad management.
Let us dive straight into it...what if you don't want to spend your crypto on a daily basis to buy coffee or if you don't want to spend crypto to buy any items. What if you think about storing bitcoin or any other cryptocurrency to hold them for a longer period of time. Suddenly we might not talk about managing 100$ in crypto on a wallet anymore. Suddenly we talk about managing thousands of dollars. And this will lead us to the next question you should ask yourself
How much value (fiat) do I hold in crypto when I manage my crypto in my own wallet?
It is similar to a very common question people ask me as an IT consultant every day. How much security do I need to put in place to protect my infrastructure? Do I need the latest technology to have the best security in place? Imagine you have your own business with daily revenue of 100$. Do you need the same security mechanisms as a billion-dollar company? Obviously - no, there is no need to spend millions of dollars to reach an appropriate level of security. Same questions you should ask yourself when it comes to your personal situation. What kind of wallet do you need to put in place that you feel confident that your crypto is stored in a secure manner?
Let us step up our example a little bit. Imagine you want a bitcoin wallet to hold Bitcoin long term. Chances are high that all those marketing campaigns have been successful and you are aware of the existence of hardware wallets as well. The most common one these days seems to be the Ledger device. I admit I bought a Ledger wallet as well to see what it is like to use.
However, does a hardware wallet really provide better security than a software wallet?
In comparison to a software wallet, the hardware wallet comes as a piece of hardware promising you more ‘security’ due to handling the cryptocurrency key management on a separate device. It is basically just this that no malicious software can target your software-based crypto wallet. These days a ledger will show any crypto-related address on the Ledger device before the user can approve a transaction. But that's pretty much it. The cheapest Ledger device – the Nano S is currently priced with $109 Australian Dollars. That is not necessarily cheap but let us stick to our example in this case.
So you might ask is it worth to spend this money to buy such a device?
Personally, I am not using my Ledger Nano anymore because I discovered a few no go’s and prefer to use a software wallet instead. I discovered that most cases where people lost their Bitcoin due to hacks or phishing were because they surfed on some dodgy websites or got baited by some websites to click on links they shouldn’t check out at all. So the main problem was not necessarily a bug in the software wallet which lead to losing their crypto it was a reckless browsing behaviour that made them vulnerable.
Stay safe, leave me a comment if you like.
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