【Recommended for beginners】How to store crypto assets

CRYPTO / NFT

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

Once you have purchased a crypto asset or NFT, how do you store it? In most cases, if it’s a crypto asset, you probably keep it in your exchange account, or an NFT purchased at OpenSea, you probably keep it in your OpenSea account as is.

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.

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

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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.

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.

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.

Purchase at the official store

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

In the case of “Ledger NanoS,” the official online store in France offers a total of six different color variations, so you can choose the color you prefer. “Ledger NanoX” comes in only one color, black. For details, please check the official online store.

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“.
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.

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