Have you already invested a lot of money in the cryptocurrency market? If so, then you don’t want your digital coins to vanish into thin air. Many investors have already lost a truckload of money simply because of failing to store their digital assets in a secure place. Keep in mind that it doesn’t matter how much you put into the market, but how you make sure that your investment is safe. In this guide, you’ll learn how to store your cryptocurrencies the right way.
Can I Keep Coins in an Exchange?
Using a cryptocurrency exchange platform may be your first step toward entering the cryptocurrency market. However, you should never let your coins sit in the exchange if you are not actively trading. In case you haven’t heard, many exchange platforms across the globe have shut down without any warning. Some disreputable companies have run away with the money of their users. Others, meanwhile, have been the victim of constant hacking. Surely, you wouldn’t want to lose your digital tokens over such an incident.
For starters, it is best to move your coins to a digital wallet and only keep the coins you want to trade actively in the exchange. This also applies to cryptocurrency trading software such as Ethereum Code. Following this tip also means resisting the temptation of trading more coins than you are willing to. By storing your coins and off-line wallet, you can guarantee that they are safe always — even from yourself.
What Is a Recovery Seed?
If you haven’t used a digital wallet for, then you should know what the recovery seed is all about. This is provided when you first set up your wallet. It consists of 12 to 24 randomized words. In case your wallet gets lost or stolen, you need to use the recovery seed to read gain access. This is precisely why you should protect your recovery seed and ensure that nobody else sees it. After getting the recovery seed, write it down right away on a piece of paper.
It may sound surprising how a string of randomized words plays an important role in keeping your digital asset safe. But this is a simple way of making sure that you’re getting the most out of your investments. You should be the only one who knows the unique recovery seed of your wallet. Do not post it online or keep a copy on your smartphone or computer. Remember that your devices may get hacked, which means the recovery seed might be stolen by offenders.
To make your recovery seed even more unique, consider adding a recovery phase. You may even decide to memorize the entire recovery seed, so you can still use it even if the piece of paper on which it is written gets destroyed or lost. Ultimately, it’s up to you to decide how to best protect your recovery seed. Just be sure that the digital coins you want to hold for the long term are stored in your hardware wallet and only keep the coins you want to trade in your online wallet.