You’ve read countless articles on how to invest in cryptocurrency, and might have even checked out an article or two about how to have your crypto generate passive income for you. However, as you continue on your journey to learn all about digital assets and financial freedom, there’s one key part of the equation you cannot leave out – cryptocurrency storage and safety.
While storing your cryptocurrency might seem like a pretty basic topic, it’s still important to know how to get it right. Storing your funds securely could be the difference between you HODLing your assets as they continue to grow or you getting hacked and being left with nothing at the end of the day.
Read on to find out more about how to buy and keep your crypto assets safe, secure, and even insured.
Difference between a private and public key
Before we tell you about where to store cryptocurrency, let’s start with some basics.
Crypto wallets work on a pair of corresponding keys – your public keys and your private keys. A public key, as its name implies, is one that gets shared with everyone. To put it in non-technical terms, your wallet address is an encrypted (or ‘hashed’) version of your public key. With it, you can receive funds from people who send them over to you.
On the other hand, private keys are utilized to help ensure and verify that the wallet indeed belongs to you. With it, only the holder of the private key will be able to access, spend or send the funds in that wallet.
Cold storage vs. hot wallets
The next thing to do is to decide between using a hot wallet or cold storage. Most seasoned crypto holders tend to use a mixture of both, due to the various benefits each type of wallet provides.
Hot wallets are termed as such because it allows you to readily access your funds to trade, spend, or send. It is ‘hot’ because it is connected to the internet, making it faster and easier to perform all of these transactions. However, a downside to these types of wallets is that they could be more vulnerable to attacks from hackers. These wallets mostly come in the form of desktop extensions, online platforms, or even mobile apps.
On the other hand, cold storage refers to storing your digital assets in a wallet that is disconnected from the web (hence, ‘cold’). Cold storage generally tends to be more secure but is sometimes not able to support and store as many cryptocurrencies as hot wallets. These wallets tend to take on the form of physical devices from providers like Trezor or Ledger. Additionally, some cryptocurrency platforms offer their users the ability to store their crypto in cold storage. Nebeus provides this service for free, and you can send your crypto to a cold storage device by depositing it in your Vault.
Buying Crypto Safely
Now that you’ve got your wallet set up, it’s time to start buying your cryptocurrency. While buying cryptocurrencies is a very straightforward venture, it’s still important to be mindful and careful. Always do your research on the crypto that you want to invest in. We’ve created multiple articles on this subject that will give you all the tips you need. Check out:
- 8 Risks to Consider Before Investing in Cryptocurrencies
- 3 Strategies for Investing in Cryptocurrencies
- What is the Best Cryptocurrency to Invest in During 2021
By the way, Nebeus has just added 7 new cryptocurrencies and 21 new trading pairs to its app and desktop platform 😉.
Purchasing Insurance for your Cryptocurrency
Insurance for cryptocurrencies is not a new concept, but it was only available to large institutions until recently. Nebeus is the first crypto platform to have released insurance for Bitcoin and Ethereum that everyday investors and consumers can purchase. Thanks to Nebeus’s partnership with the leading digital asset trust and security company, Bitgo, Nebeus users can now buy a $100M insurance policy from Lloyd’s of London that will cover third-party hacks, copying, theft, and loss of private keys.
Last but not least: How to Avoid Crypto Scams
As with any financial scam, crypto scams are numerous, and scammers are continually trying to find new ways to steal your funds. These primarily come in the form of unknown accounts messaging you out of the blue. These messages may claim that you have won some crypto or may invite you to join a new service. Before clicking on any links sent your way, it’s crucial to do some research on the organization or person who’s trying to contact you.
You should also be wary of anyone who sends you a message claiming to be the founder of a project you might be following. More often than not, most founders are aware of such scams going around. Because of this, most of them will not message you first unless they have good reason to. In any case, if you do receive such messages, remember to verify the identity of these individuals.
With all this in mind, we hope that you’re now equipped with the basics of cryptocurrency storage to go on your crypto journey safely. While it might seem like the wild wild west out here, as long as you stay alert and always remember to verify every transaction you perform, we’re confident that you’ll be fine.