Keeping Your Bitcoin Safe Part 2: “Cold Storage”
As you grow your accounts, you will want to consider not allowing any wallet developer to hold the keys to your million-dollar investment portfolio (hey, a girl can dream, right?). Well let’s face it, since we can’t walk in physically to the Coinbase Bank or the Exodus Bank (catch that oxymoron?) to see the people who are holding your currencies, it is of utmost importance to hold the keys ourselves. It's also imperative we take the time to educate ourselves and learn some new skills, and technology available to us. This space is growing like wildfire. Don't allow yourself to be left behind if you want to succeed.
Once you start acquiring a fair amount, you will want to move it to a more secure location. Enter the “hard wallet.”
Wallets online like Coinbase hold what we call “private keys” to your coins. You do not. They have a new option called a “vault,” which helps to solve this problem. I don’t know about you, but an online company having access to my private international bank account after a 31-page legalese agreement one needs a lawyer to review is…well…risky and NO LONGER private, which is one of the drawing points of crypto. So, we have alternatives called the “hard wallet.”
Two of the most popular hard wallets are the Nano S and the Trezor. Nano just came out with a new (and significantly more expensive) version in which it’s platform is built off of a small tablet. My guess is it’s easier to use that way, but you get what you pay for.
The Nano S and the Trezor are small drives that resemble a USB thumb drive. So yes, it is like walking around with a Swiss bank account in your pocket. You simply transfer your funds from one wallet address to another, the hard wallet device. These are also in the crypto world called “cold storage” or you may read/hear that a new coin company is putting a determined amount of coins “on ice” when the release their new coin. All crypto terms that simply translate to “moving the coins to an offline, not-accessible-by-anyone-except-the-person-who-holds-the-keys (or passphrase). Passphrases can be up to 24 words long. So hypothetically you could carry around your bank account in your pocket and hold the private keys in your memory, so no one would ever access them. Hopefully you never get amnesia or the over 40 “fog,” so it may be best to keep a written or printed hard copy in a safe place.
These hard wallets range from about $65 US for the Nano Ledger S to over $200 for the new Nano Ledger Blue tablet style. Trezor is coming in at about 89 Euro. Be patient as if you want the lower price you must ship it in from the manufacturer…in France. You can also get them on Amazon/ebay…. for a much higher price. BE VERY CAREFUL if you buy them off of Amazon or Ebay. If the seller has bad intent, they could fire up your device prior to sending it to you and pull your private key off of it prior to sending it to you. This has happened to unsuspecting buyers. So be SURE to reset your device to factory settings prior to sending your coins to them. Secure it with a numerical password. Seem like a pain? Then crypto may not be for you. How quick is it to access a vault in a bank? The same applies here. Protect your assets. Take your time.
Here is a direct link to the manufacturer of the Ledger S: https://www.ledgerwallet.com/r/c189
Link to the Trezor: https://trezor.io/?a=nFjsyWdda8CyB
Happy Coining!
~The Chick