Lizzie Armanto : Hi Ian, simple question : I just bought my first crypto. Now, how do I keep it safe ?
Good question… And this stuff is confusing… With crypto, there are no dumb questions…
It takes a long time to get your head around this stuff, but I’ve yet to meet an intelligent person who has poked their head in this rabbit hole and come out un-changed…
So you’ve just bought some Crypto, how do you keep it secure?
Here’s the deal — The keys to security are… your keeeeeeyyyyyys……
It’s worth understanding a bit about how this works, technically, so you understand how to stay secure. As a Crypto owner, you have a wallet. Your value isn’t actually inside this wallet.
But when you create that wallet, it creates a pair of keys, a public key and a private key. The public key is like your mailbox address — anyone can send value to this address. Your private key is like your mailbox key, ONLY YOU should have this key to access your value.
Your private key is needed to sign any transaction that would move this value that’s assigned to you, which is why PROTECTING your private key and making sure ONLY YOU can sign a transaction is so important.
How do you store these private keys in the most secure way? There are a few popular ways people store crypto, and they are not all created equal… One way is to keep your value at an online exchange. While there are a few good exchanges, there is always a danger of your account being hacked, the exchange being hacked, or as has unfortunately happened a number of times, the owners of the exchange being dishonest and making off with the loot.
In short: IF YOU DON’T HOLD YOUR KEYS, YOU DON’T HOLD YOUR COINS.
Then why is a hardware wallet better for you to properly hold your coins ?
Because using a software wallet is like locking your house and then leaving the key under a potted plant on your front porch. That’s very cute. But if someone wants in, they will find a way in.
So, to answer your question directly: the safest way to store your crypto is on a Ledger device. But you need to be sure to do it correctly, with a backup device and to keep your recovery phrase in a VERY SAFE place!
So keep watching and I’ll tell you all I can about how to take every security precaution. And keep the questions coming.