In simple terms: how to safely store cryptocurrency yourself
The control over assets provided by cryptocurrency comes with significant liability. Cryptocurrency storage options include using an exchange, custodial services, or personal storage.
In this article we will tell you how to store cryptocurrency yourself, the advantages and disadvantages of such storage, as well as how to secure your funds.
In this article we will tell you how to store cryptocurrency yourself, the advantages and disadvantages of such storage, as well as how to secure your funds.
What is self-storage?
You may have previously heard about the concept of self-custody or non-custodial storage of cryptocurrency. With non-custodial custody, you take full control of your digital assets without the involvement of third parties or intermediaries. In essence, you become your own bank and are personally responsible for the security of your assets. This method provides greater control and independence in asset management.
Self-custody wallets are different from custodial wallets and traditional financial institutions, which typically keep your assets safe. When using a non-custodial wallet, you do not need to trust a third party to keep your funds safe. You are responsible for all security measures, giving you complete control over your assets.
Self-custody wallets are different from custodial wallets and traditional financial institutions, which typically keep your assets safe. When using a non-custodial wallet, you do not need to trust a third party to keep your funds safe. You are responsible for all security measures, giving you complete control over your assets.
In addition, self-storage wallets are attractive because of their privacy. The owner of such wallets is not required to provide his personal data and financial information to third parties.
Benefits of Self Storage
The benefits of self-storing cryptocurrency include:
1
Low Fees: Non-custodial wallets typically do not charge additional fees for storing assets, unlike most custodial wallets.
2
Enhanced Security: Self-storage wallets provide complete control over private keys, which means complete control over assets. These keys can be protected, for example, by storing them in hardware wallets, reducing the risk of theft by hackers.
3
Increased privacy: When using non-custodial wallets, there is no need to transfer personal data to third parties, which increases the level of privacy.
4
Less risks from third parties: Self-hosted wallets reduce the risk of losing funds due to hacker attacks on third party servers.
5
Greater Control: Self-custody gives the owner complete control over the assets, while custodial solutions often impose various restrictions.
Thus, using cryptocurrency self-storage can be more beneficial in terms of fees, security, privacy, risk and control.
Disadvantages of Self Storage
In addition to the advantages, non-custodial storage of cryptocurrency also has its disadvantages:
1
Difficulty: To work with non-custodial wallets, you need to have a basic understanding of their functioning and private key management. Beginners may find this difficult, which can lead to mistakes and loss of funds.
2
Full Responsibility: Full control of the assets also means full responsibility and risk for the owner. Loss of private keys or errors that compromise wallet security can result in permanent loss of access to assets.
3
Lack of Insurance: Unlike custodial services companies, insurance for non-custodial wallets is difficult to find. In the event of unavailable or stolen funds, insurance reimbursement may not be available.
4
Limited Support: Technical difficulties can cause many problems for the owner of a non-custodial wallet. While most issues can be resolved through forums and communities, this may take more time than contacting support.
Given these disadvantages, it is important to carefully study all the features of the available wallets and choose the one that is right for you, taking into account your level of knowledge and ease of use.
How to ensure the safe storage of your crypto funds
A private (or private) key is a complex, randomly generated password that gives the owner full access to the wallet. Anyone who knows your private keys has access to all your assets and tokens and can sign and send transactions.
Private key security is one of the main aspects of keeping your cryptocurrency funds safe. In this section, we present some tips on how to ensure that your private key is stored securely.
Hardware wallets - are physical devices that can store private keys offline. This is one of the most secure solutions since such devices do not require an Internet connection.
Paper media - another way to store private keys. You can write down the keys on paper and place it in a safe place, such as a safe deposit box, a personal safe, or any other place that is out of reach of unauthorized persons.
Pager encryption - is a method used to ensure communication security before the advent of mobile phones and instant messengers. It is based on a simple encryption code, where letters are replaced by numbers (for example, R - 12, N - 17, B - 8). Some people apply this method to their private keys for added security.
Encrypted flash drives - are an alternative to hardware wallets. You can use an encrypted flash drive to store private keys if you don't want to purchase a hardware device.
Conclusion
Self-storage is a fairly reliable and private method of saving your funds. If you are ready to take full responsibility for the security of your assets and are willing to put up with less comfort in using these technologies, then this method will certainly suit you.
You just need to be careful and diligent, use only a trusted device or software, do not trust suspicious counterparties or projects, and we explained how to identify them in this article.
Also, the AML Crypto team reminds you to be careful in conducting transactions, choosing counterparties and applying all the necessary methods to preserve your crypto funds. And check your crypto wallet for cleanliness, perform AML address verification, track the transaction - this and more you can do in our solution Btrace. Free AML wallet verification for every new user. And if you do become a victim of a scam, then contact our specialists for blockchain investigation and return of stolen funds.
You just need to be careful and diligent, use only a trusted device or software, do not trust suspicious counterparties or projects, and we explained how to identify them in this article.
Also, the AML Crypto team reminds you to be careful in conducting transactions, choosing counterparties and applying all the necessary methods to preserve your crypto funds. And check your crypto wallet for cleanliness, perform AML address verification, track the transaction - this and more you can do in our solution Btrace. Free AML wallet verification for every new user. And if you do become a victim of a scam, then contact our specialists for blockchain investigation and return of stolen funds.
Check blockchain address using Btrace
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