Is crypto safe? Here’s how to keep your investment secure | Matjaž Škorjanc

Is crypto safe — where do the threats come from?

Digital currencies are notoriously volatile in value. Bitcoin and the wider markets are currently going through a downward swing, which seems to be finally levelling out.

What’s a digital wallet and how does it work?

It’s really important to understand crypto wallets and how they work before you start to speculate in cryptocurrencies.

What’s the safest way to store crypto?

Cryptocurrency storage isn’t a ‘one-size-fits-all’ situation. It depends on numerous factors, including you want to use your coins. Do you want to save, invest or spend, for example?

Different forms of crypto storage

There are four main ways to store crypto:

  1. Mobile wallets.
  2. Desktop wallets.
  3. Web-based wallets.
  4. Offline wallets — physical hardware.

Offline wallets — advantages and disadvantages

These are your cold storage option that should house most of your crypto investment. You shouldn’t be expecting to access it regularly for small transactions. Offline wallets aren’t a physical object, even though they’re not online — they’re essentially storage that isn’t connected to the Internet. Their keys are kept offline too.

Hardware wallets — advantages and disadvantages

These are exactly like a USB or external hard drive, with crypto stored on physical pieces of hardware. These days, they’re not as commonly used as digital or offline wallet, but they do offer totally anonymous transactions as the user’s personal data isn’t stored on the same piece of hardware.

Paper wallets and physical coins

These two options are not ideal for crypto beginners. A paper wallet can be used for Bitcoin, but you do need a thorough understanding of crypto to properly operate it. Services such as Wallet Generator allow you to print Bitcoin paper wallets, but there are various things to watch out for.

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Matjaž Škorjanc is co-founder and former CTO of NiceHash, a cryptocurrency exchange and hash power marketplace.

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Matjaž Škorjanc

Matjaž Škorjanc

Matjaž Škorjanc is co-founder and former CTO of NiceHash, a cryptocurrency exchange and hash power marketplace.