Cryptocurrency storage. Where And How To Do It?

When it comes to saving cryptocurrencies, it is very common to ask ourselves what is the best way to do it. There are many alternatives and for the novice investor the most difficult thing is to know which is the most appropriate. It will depend on the use we want to give to those coins if we will use one type of storage or another.

In general we have to keep in mind that in the most secure options we are the owners of our private keys. If we do not have the private keys, we are not really the owners of the cryptocurrencies, but we have a promise of payment from a company. We are going to analyze what are the possibilities that the market currently offers us and when it is advisable to use each one.

 

Cryptocurrency storage online

If we want to Cryptocurrency storage on the Internet we have several options. An online storage would be anything for which we need to enter a username and password to access our portfolio. Depending on the particular site, it will offer more or less security. It may offer us a double identification service that requires the mobile phone or our email. Be that as it may, we must not forget that our money is not really owned by us, but is deposited in the accounts of a company that manages it for us.

Exchanges

It is quite common for people to use an exchange to hold cryptocurrency. The reason is quite simple since it is the usual means of buying and exchanging them. Instead of sending them to another wallet, it is preferable to leave them deposited on the website to be able to operate with them quickly if necessary. Especially in a market as volatile as that of cryptocurrencies.

This is undoubtedly the least secure way to store cryptocurrency. Exchanges, after all, are centralized companies that store information on a server. They are quite vulnerable to possible hacking. There have already been many cases of hacking. On some occasions the theft has ended up knocking down the exchange and on others the exchange house has taken over the losses. Be that as it may, the ideal is to have in this type of sites only the money that we need to trade or operate in our day to day. If you are going to “Hold” and store cryptocurrencies for a long time, you should move them to an offline wallet option.

web wallets

In the case of online wallets we have another option similar to exchanges but that offers a little more security. These platforms are designed for buying and selling coins or even just to serve as a storage medium. They do not have an exchange and trading service and that makes them less vulnerable. It is more difficult for a hacker to penetrate the security of this type of website. Of course, they themselves are in charge of offering sufficient security so that users want to store cryptocurrencies on their platform.

In this type of wallets we also do not have the private keys of our coins. We will access our wallets through a username and password and depending on the page they offer us one or other additional security means. It is only advisable to store in this type of wallet the crypto that you are going to need to make payments or move between wallets on a regular basis.

Cryptocurrency storage offline

If you are one of those who do not plan to sell your cryptocurrencies in the short term, you should definitely use an offline wallet. In this way you will have control of your private keys, and only you will be the owner of that money. It is the safest storage medium but it has a major drawback. Keep your access codes well because if you lose them you will not be able to access your wallet and no one will be able to help you recover it.

Software

An offline software wallet is simply an application developed with the function of interacting with the blockchain. In the case of Bitcoin, for example, which is the most widely used, if we download a desktop wallet from the bitcoin.org page , what we will be doing is installing a program on our computer that will download the chain of blocks from the Bitcoin network and It will allow us to deposit and send coins.

This option has the disadvantage that we need a large amount of space on our hard drive to download the entire chain, but it has the advantage that we are the ones who make the transfers directly. The coins are not really in the software itself, they are registered in the blockchain. Through our private keys we can access our address and have access to our capital. If you use this method, save your keys in several different places and, if possible, in places that are not connected to the Internet, such as a flash drive. You can also print or handwrite your private keys and keep them in a safe place at home. Tell someone in your family where you keep the keys, since none of us are exempt from being able to suffer accidents.

Hardware

The safest option. There are physical wallets to store our coins that are disconnected from the Internet. In addition, they are designed with the sole function of interacting with the chain of blocks. This means that by not being able to install other types of applications, they cannot be infected with malicious code. This is the best option for those who want to Cryptocurrency storage for the very long term. As with software wallets, the coins are not actually in the hardware. We must bear in mind that our crypto is registered in the chain of blocks. These are just instruments to interact with the blockchain and have access to our crypto capital.

hybrid wallets

Now that we know how online and offline wallets work, it will be easier for you to understand how these hybrid wallets work. This option is the one that offers the best features in terms of safety-comfort. Using this storage medium it is not necessary to download the block chain. In addition, we have the private keys of our crypto. So in principle they are all advantages, but there are also things to take into account.

Hybrid web wallets

It is a service based on a platform, as could be the case with the web wallets that we have discussed previously. However, in this type of storage system we do have our private keys. We simply use a web page to interact with the blockchain but the blockchain is downloaded to the blockchain server , so we don't have to download anything. Beware of entering your passwords on a site that is not verified and is 100% secure. Avoid falling for online scams .

Hybrid software wallets

In this case they work in a similar way to offline software wallets. If you have read the entire article carefully, surely you are already imagining how they work. Basically they allow us to install an application on our computer or mobile phone but we do not have to download the chain of blocks. The blockchain is downloaded to a server and we use the app to interact with it.

So what is the best option?

It depends on the use that you are going to give to your cryptoactives. If you have a portfolio with little capital, you still have no problem leaving it saved in an online wallet. If you are a very active trader and you are constantly moving your capital, you may prefer to have the coins available on an exchange. Or maybe you prefer to sleep peacefully and keep your private keys, surely you prefer to keep your crypto in a wallet than offline. Maybe you can afford it, surely the ideal for you is to store your cryptos in the long term in a hardware that you never connect to the Internet. The good thing is that we have many options, and each one adapts to each type of investor.

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