How To Store Bitcoin & Cryptocurrency Securely

If you have started your crypto career then after getting yourself educated on how to buy cryptocurrency, the next step to consider is how to store it securely. Guarding your crypto wealth is indeed as important as the crypto investments themselves. Therefore, in this guide, you will learn How to store Bitcoin & Cryptocurrency securely for beginners.

Because it is a fast-paced digital world, and to have a worry-free financial future it is necessary to have your assets protected. You must know that cryptocurrency cannot be stored in regular banks. For their storing purpose, we have dedicated crypto wallets that are easily accessible and secure as well. But keep in mind that their passwords are very important because if you lose them then you can never get access to your assets, no matter what! One such incident happened with Stefan Thomas, in 2021, who forgot his password and lost 7,002 Bitcoins whose current worth is $203 million.

How to Store Cryptocurrency

There are four different ways to store cryptocurrency securely. Below we are going to share step-by-step instructions on how to store Bitcoin and cryptocurrency safely in each of them.

1- Steps to Store Cryptocurrency in an Exchange

  1. Choose a Reputable Exchange:

Consider different Crypto exchanges and select the most established one with a proven track record for reliability and security. The chosen exchange must have a record of good user experience.

  1. Create a Secure Account:

While opening the account in the selected exchange, it is important to set up a strong, and unique password. It is also advised to enable two-factor authentication so that you can have an extra layer of security to your account.

  1. Fill The KYC Requirements:

Complete the necessary identity verification process which includes submitting your legal name, phone number, email address, and ID card. You may be even asked to provide a utility bill to verify your real identity.

  1. Deposit The Crypto:

After completing all the requirements, you can now safely deposit your cryptocurrency in a wallet after setting it up. But for that, you will need a wallet address even under your transaction page. To get the address look for a 40 character sequence of alphabet and numbers or you can simply begin a deposit transaction to get the sequence easily.

2- Steps to Store Cryptocurrency in Cold Storage

  1. Purchasing A Cold Storage Device

It is crucial to buy a cold storage device from an authorized dealer to avoid tampering. It is also recommended to buy a wallet with Bluetooth connectivity.

  1. Install The Required Software On Your PC

Most of the cold wallets are usually in the form of small devices like USB. They often come with software that needs to be installed on your PC to be connected.

  1. Secure The Recovery Seed

In case you have forgotten your PIN then recovery seed or phrase is the only thing that can save your Bitcoin or cryptocurrency. Make sure to secure this phrase in multiple secure locations like a safe or deposit box. Because in case of multiple wrong attempts, your cold wallet will format itself.

  1. Set Up A New Wallet Address

To transfer any new crypto in your cold wallet from any other wallet, set up your cold wallet address carefully.

  1. Send Crypto To The Corresponding Address Only

Make sure that you are sending the correct crypto to the correct wallet. For example, if you send your Ethereum to a Bitcoin address then you might lose it all.

3- Steps to Store Cryptocurrency in a Hot Wallet

  1. Choosing A Reputable Wallet

While selecting a hot wallet make sure that the provider is well established because hot wallets are more susceptible to threats.

  1. Setting Up The Wallet

After selecting the wallet, start setting it up which may take up to 15 minutes. Make sure you go through KYC which is mandatory for every hot wallet. Although some may allow it to do it later, it is advisable to do it on time. 

  1. Secure Your Private Key

Make sure to keep your private key very secure and do not share it with anyone. Also, two-factor authentication adds more security to your wallet.

  1. Make Sure Your Wallet Is Ready

Check whether your wallet is ready or requires additional settings for setting it for individual cryptos. If your preferred wallet does need one then you need to do it manually by clicking ‘add’.

  1. Store Crypto

You can now safely deposit crypto in your wallet. You can also send your wallet address to anyone who wants to send you Bitcoin or crypto.

Steps to Store Cryptocurrency in a Paper Wallet 

  1. Set Up Your Paper Wallet With A Secure Computer

If you want to use a paper wallet to store Bitcoin and cryptocurrency then make sure the computer you are using is free from any malware. If you can afford it, then get yourself a personal new computer to generate these credentials.

  1. Paper Wallet Generator Sites

To generate private and public keys in seconds make use of free paper wallet generator sites.

  1. Get An Address

Using the above-mentioned sites you can generate up to 10,000 addresses all at once by simply clicking “generate”.

  1. Print Your Paper Wallet

To secure your Crypto offline you can have your paper wallet printed but make sure the printer is not connected to public networks.

  1. Secure The Paper Wallet

After depositing Bitcoin and cryptocurrency, secure the wallet in a safe place away from any potential damage.

The Risks Are There!

Just like Cryptoworld, no cryptocurrency storage method is 100% risk-free despite all the security measures. Below we will mention the risks involved in all four mentioned storage types.

Risk Of Storing Cryptocurrency In An Exchange 

Storing Cryptocurrency in exchange might be considered the easiest way of all, but it means that you will not have full control over your private keys which makes it very vulnerable. Furthermore, if the exchange gets attacked, then you can face a huge loss no matter how safe your private keys or passwords are.

Risks Of A Cold Storage Wallet

Out of all, if you want to store your Crypto most safely then cold storage is for you. It is considered the safest because it is offline and away from risks of security breaches. But since it is a physical device there are risks of it being stolen or other elemental damage like water or fire.

Risks of a Hot Crypto Wallet 

Just like exchanges, Hot crypto wallets face the same risks. Since it’s an online storage therefore can be hacked or face malware issues. Although it is relatively safer because you will have full control over your passwords and keys.

Risks of a Paper Wallet

The most fragile form of storage is a paper wallet. It may be the most inexpensive but it can be easily robbed. So having multiple softcopies will not help you either because each will have your private keys on it.

Bottom Line

If you have started your journey of trading in cryptocurrency and want to know How to store Bitcoin & Cryptocurrency securely for beginners, then in this guide I have mentioned in detail what steps need to be taken to store it in four different ways. But it’s a very volatile platform and there are many risks involved in it including the way we store it. Make sure you do proper homework before selecting any of the above four ways to store your Bitcoin or cryptocurrency.

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