Why and How to Migrate Your Crypto From Exchanges
|— When you’re considering what’s best for your crypto holdings, security of your assets is a very good first choice. Although exchanges care a lot about security, the risk of a hack is always looming.|
— Migrating your assets to safer places, like cold wallets, is always a good choice for your investments. It’s actually the rational choice when you value security.
— Besides making your investments more secure, the choice to migrate your crypto onto a cold-storage wallet gives you full ownership of your assets, limiting the control that the centralized exchanges have on your coins.
Wondering what it means to migrate your crypto, and whether you should consider it? Read on – here we explain in full.
Although cryptocurrency exchanges care a lot about their security systems and are always striving to create secure environments for transactions, the risks of theft and hacks are always present. By migrating their coins to a hardware wallet, cryptocurrency holders can avoid these risks while simultaneously taking full custody and ownership of their assets.
Why migrate your crypto?
“Not your keys, not your crypto!” You might have heard this one before and you might have scratched your head to it. What’s the deal with the “keys”? These keys are the private keys to your cryptocurrency wallet and they’re the “gatekeepers” to your crypto assets. Exchanges store your private keys on their servers which opens up a good deal of opportunities for malicious baddies to get their greedy hands on your crypto-goods.
So, how can you stay safe? We’re going to walk you through the best way to migrate your coins and get them to the safety of a cold storage wallet.
Why is self-custody important for crypto holders?
While it’s always a good idea to buy crypto on exchanges and transfer funds in between your accounts, long-term storage of your crypto assets on exchanges can prove to be a very big risk for any crypto holder.
What’s the risk?
It all has to do with the private keys. What are these private keys we speak of? They represent the keys that allow you to keep custody of your crypto assets. Think of these keys the same way as you would about your mailbox. Your mailbox is the public-key – the postman can put your mail in but you’re the only one that can take out the mail with your key, the “private key”.
On an exchange you would use your email with any type of two factor authentication. However, when storing on the exchange, the exchange keeps ownership of your private keys. This basically means that you are entrusting the exchange with the custody of your crypto assets.
What does this mean for you?
It means that in case of a hack on the exchange, your account will be vulnerable because the exchange has custody over the private keys of your account, instead of you being in control of them.
But this can be frustrating
By getting heavily regulated, exchanges can block you from freely moving your assets around because, technically, you don’t own them! And let’s not forget about one other, very-frustrating downside – in times of peak-market activity, exchanges will easily crash because of the centralized data-bases.
And, moreso, it’s because of this centralization of exchanges that the core principles of crypto, that of decentralization and self-custody of assets, are not met with exchanges.
How to migrate your crypto assets to safety
In order to move your assets to safety you must first create a safe environment for them to be transferred to.
What can be considered a safe environment?
The safest way to store your crypto assets is onto a hardware wallet like Ledger, where your private keys are stored offline, in the device itself, eliminating the risks associated with online storage of your keys.
The Ledger Nanos S or Ledger Nano X are both suitable options to help you get started on this. They’re easy to set up along with the Ledger Live App and will provide you with the most secure and user friendly environment for your crypto-coins.
Once your cold wallet setup is complete you can start with the migration process. Don’t think it’s something difficult or “out of reach”. It functions the same way as with any kind of crypto transfer.
Say you want to migrate your Ethereum from your Binance wallet to Ledger; you’ll need both the Ethereum app on Ledger Live, and an Ethereum account on the device. Think of the app as the thing that lets you send and receive a particular cryptocurrency, while the account itself is what lets you store and secure it.
#2. When you’ve done that, you’ll see a blue dialogue box open, prompting you to add your Ethereum account on the Nano.
#3. Click on Manage My Accounts and press both buttons on your device at the same time, to open the Ethereum app on the device. Once that’s done, you’ll see the account synchronising in Ledger Live.
#4. Once you’ve added the account succssfully, click “Done” to return to your dashboard.
#5. From the dashboard, click “Receive” on the left, and follow the prompts to create your unique receiving address.
#6. Once you click continue, you’ll see your address appear on your screen, with a prompt to verify the address by looking at your Nano’s trusted display.
NB. Make sure you copy the address on you clip board now, this will be the address you use to move your coins from the exchange wallet.
Scroll right on your Nano to verify the onscreen address – if the address on the computer screen matches what’s shown on your Nano trusted display, you can hit “Approve”.
#7. OK so now you’ve got your address created, verified and copied. Now, simply sign into your exchange account and go to the withdrawals page, where you can paste in your address an use it to move funds to your Ledger account.
#8. Finally, confirm the transaction request with the exchange platform via the two-factor authentication on mobile or email and VOILA – your Ethereum has now migrated to the safety of your Ledger Device!
You can also check our Binance migration video here.
Save, manage and grow your crypto with Ledger
When migrating your assets to a Ledger device you’re not just moving them to safety, you’re also gaining full control and ownership over them. No one but you has access and control over the crypto that you rightfully own.
So congratulations! You’ve now literally saved your crypto.
Beyond the security aspect, the Ledger Nano combined with the Ledger Live App provide you with all your crypto needs, such as buying, selling, staking or accessing a wide variety of dApps.
It’s not just about migrating your crypto, it’s about keeping it safe and under your full control. While exchanges may offer options for you to choose from when purchasing different crypto assets, keeping them safe and in your custody should be at the top of your mind. While the new financial world of crypto may be scary and may come with its fair share of risks, making sure that you stay on top of them should be your number one priority and responsibility as a crypto owner.
KNOWLEDGE IS POWER.
Trust yourself and keep on learning! If, like us, you find DAOs fascinating, check out our informative – and highly entertaining – School of Block episode.