Friends!!
I've been planning this one for a loooong time, so I'm stoked to finally be putting it out into the world.
CRYPTO STORAGE.
Oh, the options you'll be advertised...
- Hardware?
- Digital?
- Online?
- Offline?
- Interest-earning?
It can be a confusing fustercluck, to say the least, with crypto wallet companies far and wide dumping money into advertising campaigns aimed at making YOU think you're storing your crypto "wrong".
Well, I've put my time in navigating the wild west of crypto storage options, and I've finally found a rough target allocation for how much of my crypto I will be storing in each location.
Ladies and gentlemen...The Ultimate Crypto Storage Plan For 2021 And Beyond!
50% - Hardware Wallet (Ledger)
I'm a HODLer til I die, so it shouldn't come as a surprise that I'm putting the majority of my coins into cold, offline storage, and more specifically, the Ledger Nano S.
If you haven't heard of Ledger before...first of all, welcome to crypto! Second, you'll hear just about every legend in the space recommend Ledger as the industry standard for top-security storage, so there's probably a very good reason for that.
Pros:
- The industry standard for top-level security for your coins
Cons:
- Most illiquid option. If you plan on using your crypto to make transactions daily, it'll be a pain in the ass to use hardware wallets as a constant middleman.
30% - Interest Account (BlockFi)
BlockFi is the most recent addition to my crypto storage arsenal, so I've even surprised myself with how large of an allocation I've given it. Simply put, I believe that the risk of putting my BTC in the hands of a centralized institution is warranted in this case, because:
1. They have a damn good value proposition.
Put your BTC in, and you earn a percentage back on that investment compounding DAILY. The only thing that prevented me from signing up years ago was that this sounded too good to be true, but thanks to reason #2 below, I finally bit the bullet and trusted a few legends in the space:
2. They have a badass lineup of investors including the Winklevoss twins' Gemini, Mike Novogratz' Galaxy Digital, Anthony Pompliano's Morgan Creek Digital, Coinbase, and many more.
Personally, when I see a group of top-tier supporters such as these, it gives me some comfort in opening up my risk tolerance.
Pros:
- Interest accrues daily, so you can see measurable gains in your sat stash on day 1
- Backed and/or sponsored by the best in the business. If you've tuned in to pretty much any top-tier crypto podcast or YouTube channel, you've probably heard your favorite crypto creators endorsing BlockFi wholeheartedly.
Cons:
- All crypto income is taxed, so the interest accrual will be a long grind
- Carries risk, since you're putting your trust into BlockFi's security
15% - Digital Wallet (Atomic)
Ah, Atomic...we've been through some shit together!
I've you're a Publish0x OG like me, you probably downloaded this wallet back when it was the sponsored wallet of the platform. Well, after using it for all this time, I can say I've been very happy with it overall.
Pros:
- Solid hybrid option for security and liquidity.
- Supports staking for several coins directly from the wallet (this is huge)
Cons:
- It's a bit of a hybrid of the 2 preceding storage options, so it's not the best at either security, or liquidity. So you'll have to be cool with that sacrifice on both sides
5% - Exchange/Brokerage (CashApp)
Last and definitely least, the good old exchange.
I've tried a few over the years, but I've settled on CashApp for buying the majority of my BTC, mainly because I see a huge future for Square as a company. With Jack Dorsey at the helm, I see CashApp morphing into a Venmo-killer at the very least, which will give the app more useful transactional utility later down the road.
Obligatory disclaimer here: you should NEVER store more than a small nibble of your crypto pie inside a brokerage account or exchange. When it's on there, it's NOT YOURS.
"Not your keys, not your crypto"
-Everyone with more than 1 year of crypto experience
As a rule of thumb, I make it a point to move my big buys off of CashApp into my BlockFi/Ledger within 1 week of the purchase.
Pros:
- Highly liquid. You can trade your coins in seconds
- Don't need to deal with keys, seed phrases, or any other security measures
- You can easily send & receive payments on CashApp too, so it's very multi-functional
Cons:
- The least secure of any option above. (If their database gets hacked, you're screwed.)
- I can't stress it enough... "NOT YOUR COINS, NOT YOUR CRYPTO!" I only allocate a tiny portion of my funds onto these sources, and you should never put more than you can afford to lose on there.
That's the list, folks!
Really looking forward to hearing your thoughts on this one.
Don't be shy, let me know where you agree & disagree in the comments!
-Ben
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