SECURITY IS KEY
At the heart of Crypto custody, is most certainly security. This is especially true when it comes to whales and institutions. Securing your Crypto assets should be at the top of your list when it comes to the implementation of your Crypto portfolio. A lot of Crypto holders simply hold their assets on exchanges. This is however not the safest way to go about storing your assets.
There is a saying within the Crypto community, ” not your keys, not your Crypto”. When holding coins on an exchange or platform that is a non custodial service, you no longer hold your keys. Ownership of the private keys, which authorizes transactions and signifies ownership is now in the hands of the platform.
TRUE OWNERSHIP IS NON-CUSTODIAL
The only true way to ensure that you are actually in possession of your assets is to make use of a non-custodial wallet. There are a number of mobile wallets available that have a really solid reputation, as well as cold wallets. The highest degree of safety comes via a cold wallet.
A cold wallet is not connected to the internet and so is protected from unauthorized access, otherwise known as hacks. Cold wallets are available in the form of hardware wallets such as Ledger Nano X or SafePal Wallet S1. There is also a mobile version of SafePal, which has a 4.4 star rating from more than 7700 reviews.
Exceptions To The Rule
There are obviously times when one is required to hold assets on an exchange or third party platform. This usually takes place when one chooses to stake assets or make use of a DeFi protocol in order to earn income. The risk is offset, or legitimized by the potential gains on offer.
Trading is another scenario where private keys have to be sacrificed in order to realize gains. However, there are some alternative options that are far less risky. For instance, you could hold your assets in Trust wallet and then utilize the built-in DEX for all of your trading requirements. Creativity often renders favorable outcomes!
FOR THE NOT SO TECH SAVVY
Investors who have zero knowledge of Crypto, matched by a lack of desire to gain any, may still wish to invest in the asset class. Centralized services are therefore their only option, as they are not knowledgeable regarding self custody, private keys and hardware wallets. Certain banks in certain parts of the world are already providing Crypto custody services for their clients. This trend will most likely increase over time.
Many Crypto holders also utilize services such as Crypto.com and Celsius as their custody providers. This decision is largely due to being able to simultaneously earn interest on their holdings. You are welcome to visit the “EARN ON YOUR CRYPTO” page, where this is option is explained in further detail.
ASSESS & EVALUATE
At the end of the day, each investor needs to asses and evaluate their own personal objectives and goals. This will enhance and simplify the decision making process of selecting the appropriate wallet. I personally utilize multiple wallet types, chances are you will too, especially if you are quite active in the Crypto space.
There does not necessarily have to be one wallet of choice but rather different wallets for specific objectives. A good place to start would be a non-custodial wallet, providing you possession of your own private keys. Once comfortable with sending and receiving funds, you can revisit the idea of the appropriate hardware wallet.
WHAT ARE SOME NON-CUSTODIAL WALLET OPTIONS?
Coinomi is as an established and trusted wallet that will meet the needs of most Crypto enthusiasts. The SafePal mobile version, as well as Trust Wallet are also really great options. These wallets also enable users to “custom add” many tokens that are not necessarily enabled by default. SafePal is the most advanced of the three and has been met very favorably by Crypto users and enthusiasts.
Remember that if you do not receive your private keys when creating a wallet, you are not making use of a non-custodial service. Private keys are usually in the form of a seed phrase, which is usually 12 to 24 words. These words need to be recorded accurately in order to backup your wallet on other devices. Simultaneously, if you lose your phone or device, these keys will be required in order to regain access to your wallet. It is important to note that your seed phrase should not be saved online, or even as a screenshot. Write them down and secure them somewhere safe!