If you use Reddit at all for cryptocurrency related news, you’ll often see depressing posts of exchanges getting hacked, people’s crypto related accounts becoming compromised and/or suspended.
The lesson learned here is that you should never leave large amounts of cryptocurrency on an exchange no matter how trustworthy you believe it to be. By leaving your crypto on an exchange, you leave yourself vulnerable to personal account hacks, exchange hacks, or random account suspensions. After you make a purchase, move your crypto to a secure wallet and if you’re an active trader only leave on the exchanges only what you are willing to lose.
Crypto newbies need to understand that your funds getting compromised is not a fantasy. It is a reality. Everyday, someone’s cryptocurrency gets hacked, or there account becomes suspended for seamlessly no reason at all. In this new paradigm of money, you can’t call up your fraud department to have them issue your crypto back. Unfortunately, your crypto is most likely gone forever.
This is your money, therefore it is your responsibility. In this blog we’ve discussed the importance of cryptocurrency security. Keeping your crypto off the exchanges is one aspect of that.
So where should I keep my cryptocurrency if I can’t leave it on an exchange?
You should leave your cryptocurrency in a cryptocurrency wallet, preferably a hardware one because they are the most secure.
A cryptocurrency wallet is anything that can store cryptocurrency. There’s different types of wallets including: paper wallets, software wallets, and hardware wallets.
Hardware wallets are the safest way to store cryptocurrency because the private key is stored on a physical device rather than on a piece of paper or computer file.
In order to gain access to a hardware wallet, you need physical access to the device as well as know the pin number to unlock it.
This drastically decreases the chances of your crypto getting compromised due to a phishing attack.
To summarize what I’m saying, every time you make a purchase, move it off the exchange to your hardware wallet.
What is the best hardware wallet?
I highly recommend the Ledger Nano S
The Ledger Nano S is highly regarded as one of the best hardware wallets which allows you to access your funds via their software Ledger Live. Once you plug in your Ledger Nano S via USB and import your PIN, Ledger Live provides a beautiful interface showcasing your portfolio as well as giving you the ability to send/receive funds.
If you’re looking for more information, check out my Ledger Nano S review.
The best price for the Ledger Nano S can be found here.