How-to Guide: Self-Custody Crypto Wallets Setup

There are various types of crypto wallets that are available for users. From custodial to non-custodial or hot wallets to cold wallets. All users who invest and hold cryptocurrencies should be using a self-custody/non-custodial wallet to ensure the security and sole ownership of their crypto unless you’re a cryptocurrency trader that requires their funds to be stored on a exchange for time sensitive trades. As you dig deeper into the crypto rabbit hole, you will often see and hear the phrase “Not your keys, not your crypto.”

Using a self-custody crypto wallet ensures sovereignty over your funds which allows for permissionless transactions. The wallet stores two keys:

• Public key: public address that allows you to receive transactions.
• Private key: provides the user proof of ownership or spending of funds linked to the public address of your crypto wallet. For this reason, your private key is in the form of a large numbered piece of code. Users are able to have a number of public keys (addresses) connected to the same private key.

Because the private key number is so long, developers have created an easier way for users to access their private keys — seed phrase. A seed phrase is string of 12 or 24 words. These words have a specific order to it and is labelled from 1–12 or 1-24. Your seed phrase should always be stored offline and somewhere safe. Do not take a photo of your seed phrase and save it on your phone as storing anything online is always subject to online hacks.

Note: You can share your public key, but never share your private key or seed phrase with anyone.

There are two types of self-custody wallet: hot wallets and cold wallets: Any software crypto wallet that is connected to the internet is considered a hot wallet. On the other hand, cold wallets are a hardware devices where the private key is stored offline by default which makes it more secure than hot wallets. Metamask or Rainbow are popular self-custody hot wallets, while Ledger and Trezor are popular hardware wallets for cold storage. Highly recommend to move any long-term assets you are planning to hold into cold wallets as it is the most secure way of storing your crypto holdings. When purchasing hardware wallets, always be sure to make the purchase from the manufacturer’s website.

The following sections will provide a walk through of how to set up a hot and cold wallet. We will be using Metamask and Ledger as an example. Setups of crypto wallets usually follow a similar pattern.

Set up your Metamask (Hot Wallet)

Metamask is one of the most common crypto hot wallets for exploring Web3. It is a good first step to take for your crypto journey

1. Install Metamask onto your web browser. Metamask caters towards various browsers and devices.

2. Once installed, click into the Metamask icon in your browser extension

3. Select “Create a Wallet” to proceed with acquiring your seed phrase

4. Create a password for your account. This password will be used every time. you want to login to your account.

5. Securely store the seed phrase provided

• MetaMask will provide a 12-word seed phrase in which you will need to store it in a safe and secure place. It is the only way to recover your funds should your mobile or laptop device crashes or if your browser resets. Writing it down on a piece of paper and storing it in a place that only you would know would be the best method. Note: if you lose your seed phrase, MetaMask can’t help you recover your wallet and you won’t have access to the fund forever.

6. Click “Next” once you have written down your seed phrase. You will be required to verify your seed phrase during this step. Metamask will show you all the words that were provided to you and you will have to click on each word in the order in which the words were presented on the previous step.

7. Congratulations! You have successfully set up your Metamask wallet. To access it, just click into the Metamask icon in your web browser.

Set up your Ledger Device (Cold Wallet)

Ledger has both a hardware and software component to it. The hardware device allows users to sign off on transactions, while the software offers user a front-end display for them to manage their crypto portfolio.

1. Download Ledger Live.

2. Once you finish downloading, open the app and it should bring you to the page below. Click on “Get Started” and follow the instructions.

3. Select your Ledger device and click on the first time using your device option right after

4. Set up your Nano

5. Connect your Ledger device to your desktop. Follow the instructions to set up your Ledger Device

• Turn on your Ledger device by holding down on the button next to the USB port until the logo appears
• Follow on-screen instructions on the device. Click the right button to move forward and left button to move back to the previous screen
• Click on both buttons to validate selection

6. Set up your pin code. The pin code is a 4–8 digit code that you enter every time you turn one your Ledger device.

• Click the right or left button to move the numbers up and down. Click both buttons to select/validate the number.
• Hit the check mark once you have set the pin code.
• You will be required to confirm pin code by entering it again.

7. Write down your seed phrase

• A paper slip is provided for every Ledger device purchase. Write down the words in the order shown on your Ledger device.

8. Confirm your seed phrase

• You will be required to confirm your seed phrase in the order of the words that are shown to you. Refer to your paper slip to confirm the seed phrase.

9. “Your Device is Ready” will be shown after you set up your seed phrase which means your device is set up at this point.

10. Now that your device is set up, you will be required to download an application and add an account depending on the cryptocurrency you wish to hold. For example, Install a Bitcoin app to manage your Bitcoin account holdings. Note: Ledger devices have a storage limit so users are able to add or remove accounts depending on their storage.

11. Connect Ledger Device to your desktop to allow access to “Manager” tab.

12. Install app by searching in the catalog for the crypto app you are looking to download. Click “Install” and follow the instructions on your device. Wait for install to finish before quitting Manager

13. To add account, head to the “Accounts” on the left hand column and click on “Add account” on the top right hand corner.

14. Follow the steps on your Ledger device to finish download of the account.

Once you added your account, you will see it on the Accounts dashboard. You are now ready to add Bitcoin or other cryptocurrencies to your account now.

Connect your hardware device to your Metamask account

As mentioned earlier, storing funds on a hot wallet like Metamask exposes users to the risks associated with online hacks since it is connected to the internet. To ensure the safety of your funds, you can connect your hardware device like Ledger to ensure you are interacting with decentralized applications the safest way possible. Here are the steps:

1. Prior to connecting your Metamask account to your Ledger device, you will need to download the Ethereum application first. Also, make sure that “blind signing” is turned to ensure smooth connection. You can access that by going into the Ethereum app on your device, head to setting, and turn blind signing on.
2. Login to your Metamask

3. Click on the menu in the top right hand corner and select “Connect Hardware Wallet

4. Before clicking on the Ledger logo, make sure your Ledger device is connected to your device and that Ledger Live is unlocked.

6. Once it discovers your wallet, it will prompt a message on the Ledger account you want connected to you Metamask. Select the account and finish connection.

7. You will now be able to see your Ledger balance on the Metamask browser extension once connected.