How to Store Your Bitcoins or Altcoins Safely

3 months ago 100

A cryptocurrency wallet is where you store your cryptocurrencies. This may be considered a cryptocurrency investing because the financial assets you're dealing with have no physical counterparts, i.e., they're digital. And because they're digital, you can only store them via a digital storage facility, i.e., a cryptocurrency wallet. 

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The only question is what type of wallet will you use? There are two general types of wallets: hot storage and cold storage. Hot storage wallets are those that are online or Internet based. Cold storage wallets, on the other hand, are those that are offline or aren't connected to the Internet.

So which of the two is best for safely HODLing your cryptocurrencies? If the only way to steal or rob your cryptocurrencies is via hacking, then the obvious answer is cold storage or offline wallets, which come in two general variants: paper and hardware. And I suggest using both.

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But before I explain how these two cold storage wallets work, allow me to explain how cryptocurrency storage, particularly the blockchains, works. When you buy cryptocurrencies from any particular exchange, your transaction is assigned a public key that is linked to the number of units of a cryptocurrency that you bought. Your cryptocurrency exchange, on the other hand, assigns private keys that corresponds to your public keys. Therefore, your private keys are your lifeline to your cryptocurrencies, and if you lose or forget them, you can say goodbye to your cryptocurrencies.

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