Protecting your investments (Online and offline storage)
With the recent boom in crypto investors, a lot of newcomers have posted threads here with questions about the safest way to store their coins. This thread is going to contain information on the multitude of ways to store your bitcoins/altcoins in order to protect your investments. Probably the most important aspect of investing is making sure that your holdings are kept secure so I hope that this can help some people out. I will continuously add more information to the Topic, for now I will just include a few of the main ones.
Online Wallets
Security: Low
Accessibility: High
First and foremost, online wallets are not the safest way to protect your coins, but they do provide easy accessibility so that is why I will include a few of them on here and the coins that they support. The thing about online wallets is that at any point, they could shut down or be hacked and your funds are gone forever. I always recommend keeping your coins on a cold storage.
Blockchain.info
Coin(s) supported: Bitcoin
Pros: Instant send/receive, lots of security features
Cons: Slow/buggy when network is clogged
Coinbase
Coin(s) supported: Bitcoin, Ethereum, Litecoin
Pros: Easily buy/sell coins from bank/card, USD wallet
Cons: I'm gonna go ahead and throw this out there and say that I do not recommend using Coinbase as a wallet. Their service is great for buying/selling coins with fiat, but they are the PayPal of the crypto world. They have a bad reputation for locking up wallets, requesting information on where the funds are coming from, and requesting different forms of ID verification.
I'm not going to include any other online wallets as I just do not recommend using them in general so I feel that it isn't necessary.
Desktop Wallets
Security: Medium
Accessibility: High
If you want your coins accessible 24/7 and stored at your own expense, then I recommend using a desktop wallet over an online wallet. Even if your computer dies, the wallet data can still be extracted from your HDD.
Jaxx.io
Coin(s) supported: Bitcoin, Ethereum, Dash, Ethereum Classic, Augur, Litecoin, ZCash, RSK Testnet, Iconomi, Golen, Gnosis, DigixDAO, Blockchain Capital
Pros: Lots of coins supported, mobile app, public source code, compatible with most platforms
Cons: No 2FA
Exodus.io
Coin(s) supported: Bitcoin, Ethereum, Litecoin, Dash, Augur, Golem, Dogecoin
Pros: Lots of coins supported, built in Shapeshift, live portfolio charts, customizable themes
Cons: No 2FA
Electrum
Coin(s) supported: Bitcoin
Pros: Very secure, insanely fast, cold storage feature, multisig,
Cons: No multi-coin support
Hardware Wallets
Security: High
Accessibility: Low
Hardware wallets are best for people who want a very secure way to protect their investment long-term, or have zero self control and need a way to stop themselves from selling their holdings. Hardware wallets are by far the safest form of protecting your coins and I highly recommend using them if you plan on holding your coins for a while.
Ledger Nano S
Coin(s) supported: Bitcoin, Ethereum, Litecoin, Dash, Dogecoin, ZCash, Stratis, Ripple
Pros: Multiple coins supported, very secure, 2FA, fairly cheap
Cons: Coins cannot be accessed quickly (not specifically this product, but all hardware wallets in general)
Cost: 58.00 €
TREZOR
Coin(s) supported: Bitcoin, Ethereum, Litecoin, Dash, ZCash
Pros: Multiple coins supported, very secure, 2FA, fairly cheap
Cons: Coins cannot be accessed quickly (not specifically this product, but all hardware wallets in general)
Cost: $99 USD
Paper Wallet
Coin(s) supported: Any
Pros: Completely off the grid storage, free, any coin
Cons: Coins cannot be accessed quickly (not specifically this product, but all hardware wallets in general)
Cost: Free
Should you keep your coins on an exchange?
Absolutely not. At any point, these sites could turn out to be a scam or get hacked and all of your money is gone. If you plan on holding your coins for a while, then deposit onto the exchange, purchase what you need, then withdraw immediately.
How do I transfer my crypto to cash when I'm done?
There are several ways you can do this. First, I would check LocalBitcoins and see if there are any offers that meet your needs. They have tons of exchangers on there and you will most likely be able to find your desired payment method. Secondly, you can use services like Coinbase to deposit your BTC directly to your bank - this of course will require ID verification.
Thanks i really need that. I just want to get some idea, if my goal is to buy many different coins, what is the best way to manage efficiently? Exchange? Or open a wallet for different one? And how would you consider to store that..thumb drive? I would be really appreciated if you can share...
Sure, keep in touch i will share many more useful content in future.
coinbase will just close your account whenever they feel like it.. closed 2 of mine. granted they give you the option to send your coins somewhere else but still. I think the best option is trezor or paper wallets
Thank you so much for sharing your experience with us, trezor is the best one indeed.
Nice post bro, really clarifies every detail about securing your assets !
Keep it going.
Thank you so much, keep supporting. Will do for sure :)
Nice info. Didnt understand what exactly what "coins cannot be accessed quickly means", the device is not always on you?
Did you hear about using bit locker to encrypt a flash drive with AES256 standard ? This way any flash drive can be used as a wallet.
I tagged your article in one my articles. Hope thats cool with you
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