There are a few different types of crypto wallets. Arguably, the most popular is the software wallet (aka a hot wallet), which stores crypto online. Read: Great for sending and receiving crypto quickly and easily.But they come with a catch: They’re hard to keep secure because they’re connected to the internet.And that’s a problem. See: recent hacks. Enter the hardware wallet (aka a cold wallet).
What is a hardware wallet?
It’s a place to store your private key offline and prevent it from being exposed on the internet. Hint: Your private key is the string of numbers you use to prove ownership of your crypto and withdraw from your wallet. So if someone has your private key, they can take crypto from your wallet. Think: Hackers.
I already have an online wallet. Do I really need a hardware wallet?
If you want your crypto to be as safe as possible, you should look into a hardware wallet. In the recent FTX hack, about $600 million was drained from wallets located on the exchange. The bottom line: Keeping your crypto offline could keep it out of the wrong hands.
Can I have both a software and a hardware wallet?
Yes, you can have more than one wallet. And maybe you should. A possible option: Have a software wallet for spending and receiving crypto online and a hardware wallet offline. That way, you’re not keeping all of your crypto eggs in one basket, and have some coins that are safe JIC your hot wallet’s key is compromised.
Where do I buy a hardware crypto wallet? And what should I do with it?
There are a number of hardware wallets available to buy online from retailers like Best Buy and Amazon. Hint: They generally cost between $50 to $200.
Once you have your hardware wallet, you’ll want to store it somewhere you’ll always remember and have access to. So, keeping it in something like a safe deposit box at a bank is a good option.
And hang onto its private key and keep that somewhere secure, too. Like a safe. But keeping them together probably isn’t a good idea.
theSkimm
Buying a hardware wallet can keep your crypto out of the wrong hands. If you’re planning to hold onto your crypto for the long haul, investing in a hardware wallet and storing it somewhere safe might be the right move.
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