What Should I be Doing With my Crypto?
With the sudden fallout of FTX and all the other FUD (Fear, Uncertainty, Doubt) going around these days, a person might have questions about what exactly should I be doing with the coins that I am holding and want to keep holding.
While this is true about keeping things in the back of your mind it is especially true when you start hearing about and see exchanges who are pausing withdrawals and individuals who are having to wait to get their funds.
So what SHOULD you do?
One thing many of you who are just now starting your crypto journey, or some of you who have not experienced a hard bear market yet might have started to hear about is a wallet, cold storage, hot storage, Ledger or Trezor. These are all different ways that people can store their crypto and keep it safe. There are also different levels of security when using all of these different types of storage and I will walk you through some of them as well.
Wallets
One thing that people might hear a lot about is a wallet. Now a person might think of a wallet as being something that you put money, or cards into, and either keep it in a purse, handbag, pocket and it keeps your currency safe.
That is very similar to what a wallet is for crypto, however usually it is a place to put your digital currency. I can’t physically take out any crypto and use it, but I can store it in wallets. There is usually a few steps of security for each type of wallet and are usually pretty safe. There are two main types of wallets, a Hot Storage and a Cold Storage.
Hot Storage
A hot storage wallet is a wallet that is kept online and has internet access. Some of these examples include wallets that are tied to an exchange. So if I have an account with Binance. Binance has a wallet that is specifically set up for each user who signs up. However, that is online and COULD be accessed by a hacker, or a bank run. These funds are on the exchanges wallet and therefor can technically move them around a bit as they see fit. Does it always happen that way, no. But CAN it, yes.
Cold Storage?
The other option for crypto customers is Cold Storage. Cold storage is the ability of having a wallet that is not online and that you actually hold your crypto keys for. Cold storage usually comes with a small USB type device that you can plug into your computer. You will usually have a 12 or 24 word “Seed Phrase” that you write down that only you will know. So as long as no one gets access to that phrase your crypto should be secure. There are two main types: Ledger and Trezor. Both have their own pros and cons, so you must do research for yourself to find out which one would suit your own workings.
But Why?
There are two main reasons for having your crypto offline in cold storage. The first is so hackers can’t get to it. If it is offline, and no one can access it, then there is not a fear of someone getting info such as a login or password and getting your crypto. Even if they can’t get the full password to withdraw, they could do what happened with 3Commas a few weeks back and use your funds to pump and dump “shitcoins” while they use their own account to sell at the top and use your account to buy at the top. The other reason is that if something crazy happens and everyone wants to withdraw their BTC at once the exchange MIGHT not have enough BTC and you might have your withdrawal paused or not have the funds altogether. Think of FTX or Crypto.com for a moment.
So What Should I do?
That is something I can’t tell you. However, I hope with this article I have given you a few good ideas to think about and some things that will make you think about where exactly to put your crypto and how to keep your crypto safe.
Links
Gridbot Guru on YouTube: Click here!
Pionex for US citizens: Click here!
Pionex for Global Citizens: Click here!
To sign up for Coinbase: Click here!
USDT (TRC20): TAiedLXa7mLvwoYbwr46MMqEFiFYkq1HtJ
BTC: 3FtbppeWNaoYxbpA1mPdHDjn7E41mzhriy
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