【Let’s improve our defense】How to store crypto assets

English Articles

In this issue, I will consider how to store crypto assets (including NFT).

How do you store crypto assets and NFT after you purchase them? In most cases, you probably keep your crypto assets in your exchange account, or in your “MetaMask” wallet for NFT purchased at OpenSea.

If you plan to sell them soon, that may be fine.But it’s not a good idea from a security standpoint to keep them there for a relatively long period of time.

Recent trends in NFT theft include direct messages from social networking accounts such as Twitter and Discord that lead to fraudulent websites, and the sending of NFT to OpenSea by strangers who then accept the offers received and later have their NFT extracted. The methods are becoming increasingly sophisticated.

Security is becoming a phase where it is particularly important to keep up to date with the latest information and improve your defences.

I will explain this issue with an introduction of a very secure wallet called “Ledger,” which is called a cold wallet.

Recently, it is also recommended to create multiple MetaMask wallets and use one wallet for purchases and another for storage. For more information on how to create a MetaMask wallet, please refer to this article.


What is Hot wallet and Cold wallet?

What does it really mean? The differences are as follows:

Hot wallet

・Connected to the Internet
・Manage crypto assets online
・Convenience compared to cold wallets

Cold wallet

・Not connected to the Internet
・Offline management of crypto assets
・Less convenient than hot wallets, but more secure

In summary, the difference is whether or not you are connected to the Internet. And the fact that both wallets are managed by “Recovery Phrase (private key)” is the same.

Hacking doesn’t go away 100% of the time

However, one must always keep in mind that being constantly connected to the Internet means the possibility of being hacked. Various wallet applications and exchange accounts are supposed to be more secure than before, but even so, it is impossible to say that they are 100% hack-proof.

If a virus is planted and the “recovery phrase (private key)” is extracted without your knowledge, all assets in that wallet will be lost. Hackers will expose security vulnerabilities and exploit blind spots. This trend will never go away 100% in the future.

What we need to consider is that if the safety is not 100%, then we must try to make that storage method as close to 100% as possible in terms of safety. In particular, the larger the amount of assets, the greater the need to do so.

Including MetaMask, keep only crypto assets that are scheduled to be traded in the near future in a hot wallet that is connected to the Internet, and store those that will not be used for a while in a cold wallet. This is common sense for safe storage of crypto assets.

About cold wallet 『Ledger Nano』

Cold wallets are also called “hardware wallets” because they use a dedicated device. The most common examples are “Ledger” and “TREZOR,” but here I will introduce “Ledger,” which I have actually used and which is more reliable.

There are two types of 『Ledger Nano』

There are two types of Ledger (formally known as Ledger nano): “Ledger NanoS” and “Ledger NanoX“.

The differences are as follows:

・Ledger NanoS:Small capacity (138KB), no Bluetooth support
・Ledger NanoX:Large capacity (1,780KB), Bluetooth enabled

I’m currently using “Ledger NanoS“. The operation itself is simple and easy.

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The image above is a screenshot of “Ledger Live,” which is operated on the PC side when using Ledger. As shown in the red circled area, there is 138KB of space, and three applications are installed here: “Bitcoin (62KB)”, “Ethereum (48KB)”, and “Binance Smart Chain (2KB)”. However, if you try to install other altcoin apps in addition to this one, you may cause a capacity overflow.

For example, if you try to install “Solana (36KB)” application here, it will be over capacity and cannot be installed. In such a case, you can use it while organizing the unused coin apps. This is because some coin apps, such as “Binance Smart Chain (2KB),” have a small capacity.

Therefore, it is recommended to try the inexpensive “Ledger NanoS” first to get a feel for it. However, if you have a lot of coins and already have plans to transfer them to a cold wallet, it is better to purchase the larger capacity “Ledger NanoX“.

About『Ledger Nano』setup

The following steps will help you start using the system smoothly.

・Transcribe the recovery phrase (private key)
・Set the recovery phrase (private key) to Ledger
・Set Pincode to Ledger
・Install “Ledger Live” to be operated on the PC side and connect to Ledger
・Install the coin app you want to store in “Ledger Live”

You can get started in roughly five steps. It’s very easy to set up, requiring only 15 to 20 minutes.

For the set-up, watch this YouTube video to get an idea.

Also, if the device fails for some reason, the stored crypto assets will not be lost due to the failure. If the “recovery phrase (private key)” set before starting to use the device is stored securely, it can be restored using that key.

It is important to purchase dedicated devices from official online store for safety reasons. Avoid purchasing through other channels.

How to store NFT to Ledger

Transferring from exchanges and MetaMask is no different from normal transfer procedures, as all you need to do is specify the address generated after installing the coin’s application.

This section explains the actual procedure for sending NFT purchased on OpenSea to Ledger, so let’s go through it together.

First of all, select the NFT you want to send from your OpenSea account and click on the paper plane symbol in the upper right-hand red box.

Next, the screen prepares for the transfer, and the Ledger ethereum address is entered in the red frame part address field.

Return to ‘Ledger Live’ and click on your account in ① to see the list of installed coin apps. There, select the Ethereum app and you will see the screen in the screenshot above, then click on tab ②.

You will then be taken to the screenshot shown above. Click on the red framed area.

The ethereum address on the Ledger side is displayed, click on the symbol in the red frame area and copy the address.

When you return to the OpenSea transfer preparation screen, enter the address you copied in ①. Recheck that the address you entered is correct and click ②.

Finally, check the gas bill in MetaMask and if there are no problems, approve the process and the procedure is complete.

Summary of this issue

The storage methods explained so far are essential knowledge for the safe handling of crypto assets from now on. If you actually use it, you will learn it quickly because the operation is simple and easy. In addition, there is no way to avoid using it considering that it guarantees safety, so please take this opportunity to give it a try.

Open an account with an exchange

A good exchange to recommend for trading crypto assets is “BYBIT“.

Secure with strong security(Open a Free Account)

There are multiple reasons for this, but it is largely due to the following three points.

1.No transaction fees on all cash currencies. ※ Starting from Sep 6 2022, 10 AM UTC.
2.No fees for sending to other exchanges.
3.Top class server strength and high security.

As mentioned above, no transaction fees for buying, selling, sending and withdrawing money, the higher the volume of transactions, the more attractive the lower commissions become. In addition, the operability of the application is outstanding, so the point is that it can be easily operated even by beginners in particular.

It depends on what you value in terms of service, but if you want to keep fees and other costs as low as possible, “BYBIT” is an exchange that offers high performance services compared to others.

That’s all for this issue.
Thank you for reading this far.