When it comes to crypto we all want to risk it to get that sweet biscuit. But with all the craziness with banks basically going bankrupt you need to make smart moves to protect your crypto. This is where cold storage comes in. Cold storage can protect your digital assets by taking them offline and harboring your crypto in a digital wallet. Since these digital wallets aren’t connected to the internet, they’re less susceptible to hacks.
The recent downfall of FTX and other crypto exchanges is a great example of why it pays to hold some, or all of your cryptocurrency in cold storage. When your crypto is on an exchange, like FTX, you can only access those assets if the exchange is able to distribute your funds to you. If that exchange gets hacked or is mismanaging funds, your money might be gone. The downside of cold storage is that your assets are less liquid and harder to trade quickly, since you have to go through various protective steps to access your funds.
And for this example of protecting your crypto from a bankruptcy were going to focus on XRP as an example, but keep in mind this will work for any crypto as well when putting it into cold storage, here’s how to get started. Keep in mind there are a number of cold storage wallets you can buy to get started. But the most popular and reputable one to use is ledger.
Cold Wallet Deals
How To Use Ledger Wallet
Leger has two cold storage wallets on the market: the Ledger Nano S Plus which costs $79 and the more expensive Ledger Nano X which started at $150. Depending on which model you get, these devices can either be connected to your computer with a USB cable and an iOS or Android enabled mobile device, or with Bluetooth capability.
Ledger supports over 5,500 types of cryptocurrency and keeping your xrp on here is a wise move. Okay, now your probably wondering whats the actual process to moving your xrp and crypto onto ledger, and its actually pretty easy.
- Plug your cold storage device into your computer.
- Download the software provided with your cold storage wallet.
- You’ll be given a seed phrase or backup code. It’s best to keep this code offline and safe, somewhere where it won’t be lost or accessible by others. Write it down on a piece of paper and put it in a safe.
- Each type of cryptocurrency (such as bitcoin, ethereum, or xrp) needs its own wallet. Follow the instructions to create a new wallet for each type of crypto you are trying to store.
- To access your device, you’ll have to set up a pin.
- Once you have a pin, you’ll be able to add your crypto to your cold storage wallet by clicking receive, which will show you your cold storage wallet’s address.
- To take your cryptocurrency off of an exchange, log on to the exchange and send the digital assets to the address of your cold storage wallet.
Keep your cold storage somewhere safe and remember, if you lose it along with your seed phrase, your money can’t be recovered. If you lose your hardware wallet, but still have your seed phrase, you can buy another hardware wallet and access your assets. It’s a little risky knowing that if you misplace this device along with the seed phrase, there’s nothing you can do, but at least you have full custody of your assets, unlike when your digital assets are tied to an exchange which is the whole point of actually owning your crypto.
And to recap here is a list of the pros and cons to using cold storage to protect your Crypto
- Cold wallets, at least the most secure ones, have elite safety components such as a secure element on which they spend a lot of research and development.
- Most require biometric verification to unlock and access the accompanying app, which you can use to connect with DeFi and Web3 protocols via QR code.
- You need physical control of both the cold wallet and the accompanying phone/PC app to make a transaction.
- A physical button press on the device is required to authorize any transaction, making remote hacks all but impossible.
- If you lose your cold wallet, you can simply use your recovery seed to restore access to your funds on a different wallet (either hot or cold)
- If you lose your phone or computer where your cold wallet app is on, simply download and install it on a new device and pair it with your device.
- Thanks to in-app browser support, Web3 and WalletConnect compatibility with thousands of Dapps, cold wallets are more user-friendly than ever before.
- Cold wallets are sophisticated devices and and will cost you between $50 and $200, depending on their specs and features.
- You must still store and protect your recovery seed in order to restore it if needed.
- You can still be susceptible to some types of phishing attacks if you physically approve a malicious transaction without doublechecking.
- Cold wallets will always offer fewer features and coin support than hot wallets, due to physical limitations and firmware requirements for new coin support and features.
- Cold wallets with bulkier USB designs can be vulnerable to supply-chain attacks, where the device is tampered with before it reaches the end-users.
Ultimately, for anyone serious about really looking after their crypto, the added security and reliability make hardware wallets the best options for long-term crypto storage. Serious crypto users tend to keep the bulk of their funds in cold storage.
And lastly we’d like to recommend 3 coins that have some serious potential going into the next few years, other than xrp of course.
First up we have the Enjin Coin. Enjin is a software that gives developers the ability to create and manage virtual goods on the Ethereum blockchain. The idea is that by using blockchain technology to manage in-game items across many different properties, Enjin can help reduce the high fees and fraud that have plagued the transfer of virtual in-game goods and collectables. Toward that goal, Enjin has released software development kits (SDKs) allowing users to both create digital assets on Ethereum and integrate them into games and apps. Each minted asset is customizable to fit the desired platform and recorded in a smart contract, giving the items the advantages of cryptocurrency, namely speed, cost and security. Central to managing the digital assets on its platform is ENJ, Enjin’s cryptocurrency, and each in-game item created on Enjin is assigned a value in ENJ. Bottom line the price on this coin is very undervalued and could sky rocket at any given moment.
Second, we have Sushiswap. SushiSwap is a software running on Ethereum that seeks to incentivize a network of users to operate a platform where users can buy and sell crypto assets. Similar to platforms like Uniswap and Balancer, SushiSwap uses a collection of liquidity pools to achieve this goal. Users first lock up assets into smart contracts, and traders then buy and sell cryptocurrencies from those pools, swapping out one token for another. One of a growing number of decentralized finance (DeFi) platforms, SushiSwap allows users to trade cryptocurrencies without the need for a central operator administrator. This means that decisions relating to the SushiSwap software are made by holders of its native cryptocurrency, SUSHI. Anyone holding a balance of the asset can propose changes to how it operates and can vote on submitted proposals by other users.
3. Basic Attention Token
Next, we have the Basic Attention Token. Most internet users go out of their way to avoid online advertisements, but what if they had a monetary incentive to view them? Basic Attention Token is a cryptocurrency intending to create a virtuous cycle around digital advertising that is equitable for creators and consumers. Running on Ethereum and integrated natively on a custom web browser called Brave, BAT can be exchanged between advertisers, publishers and internet users based on their web activity, and is intended to streamline commerce between all three groups. Users are rewarded with BAT for viewing ad content, publishers can deliver higher-impact ads and advertisers can be assured their messaging is being viewed by a willing audience. The end result is a new kind of digital advertising platform powered by BAT. Users can either hold the BAT, exchange it for cash or other cryptocurrency, or pay it to support their favorite content creators.
We hope you guys enjoyed this especially if you hold xrp or any other crypto right now and are trying to protect your coins. Of course, you can learn more about using the ledger here, but it would be a wise investment especially to get your coins off the exchanges where nothing is really guaranteed.