How to Store Cryptocurrency in 2024 (2024)

Steps to Storing Cryptocurrency in a Paper Wallet

• Step 1: Access a computer you’re sure is free from any malware. If you can afford it, get a new personal computer for this step. The reason is that generating paper wallet credentials with an infected computer makes your wallet vulnerable and unsafe for crypto.
• Step 2: Visit a paper wallet generator site. These free sites can help you generate the credentials you need, such as the private and public keys, in seconds.
• Step 3: Generate an address. Select the number of addresses you want to generate and click “generate.” Some sites can generate up to 10,000 addresses at once.
• Step 4: Print out your paper wallet. Since you want to preserve your crypto offline, one common method is to print out the wallet and fold it with the crypto address showing outside while the private key is in the inner flap. This will make it more difficult for someone to view your private key at a glance.
• Step 5: Send crypto to your paper wallet. After sending your crypto, keep the wallet in a secure location, away from potentially damaging elements like moisture and heat. Since crypto is virtual, you can send crypto to any wallet, whether paper, digital or physical, as long as you have an address to use.

What You Need to Open a Cryptocurrency Account

Opening a cryptocurrency account is quick if you have the necessary details. A few wallets even allow you to open multiple user accounts on the same wallet. Remember, you'll need to provide the necessary KYC details; these details help exchanges and wallets keep money laundering and other financial crimes in check.

Research the Cryptocurrency Account

Running background checks before you sign up with an exchange/wallet is crucial. These checks save you a lot of headaches and prevent you from falling into the hands of scammers posing as legitimate business owners. The first place to look is the company's website. There are several questions to ask, including:

• Does the website look suspicious?
• Does the URL correspond with the company's name?
• Who runs the exchange?

Although many things are anonymous in the crypto space, owners of wallets/companies rarely are. If you’re satisfied with the company’s website authenticity, head to social media to check out its official social media handles. Also, pay attention to any red flags and listen to what other people are saying about the company. Do a lot of people say it’s inefficient?

Sign Up

To use a cryptocurrency wallet/exchange for the first time, you need to sign up with some details and documents to give the exchange some background information on you. Here is the information most exchanges require:

• Name
• Date of birth
• Email address
• Phone number
• Home address
• Social Security number
• Driver’s license or passport

Understand the Basics

Since cryptocurrency is money, it needs to be kept safe: away from hackers, scammers, and other bad actors. If these people get ahold of your crypto, they can send it to another wallet or sell it for money, leaving you with nothing. In choosing a crypto wallet storage option, consider one with a security system that makes it difficult for anyone to hack your wallet and steal your assets.

There are different types of secure wallet options you can go with, including crypto exchanges, cold storage wallets, paper wallets, and hot crypto wallets. If you want to access your crypto more quickly, choose either a crypto exchange or hot crypto wallet. If you’d like to focus more on security and storing cryptocurrency offline, cold storage or paper wallets are ideal options.

Cryptocurrency Exchange

A crypto exchange is an application that lets you access crypto and carry out crypto-related transactions. Most wallets are free to download but involve a transaction fee for sending or selling cryptocurrency. Coinbase, Binance, and Kraken are all popular examples of cryptocurrency exchanges.

Cold Storage Wallet

A cold storage wallet is a type of wallet not connected to the internet. With these types of wallets, your crypto is safe from hackers, so these are ideal for storing large amounts of cryptocurrency. Many users go for Trezor and Ledger.

Hot Crypto Wallet

Unlike a cold wallet, a hot crypto wallet is connected to the internet. That means you need an internet connection to access your crypto. Although these wallets are more susceptible to hacks, they make accessing your crypto frequently for transactions easier. Numerous hot crypto wallets are available on the market today, but Guarda and Mycelium are good picks based on security.

Paper Wallets

Although paper wallets are now phasing out, they‘re still practical for storing cryptocurrencies. A typical paper wallet contains your private keys and your address printed on it. Paper wallets are relatively safe, but if the paper gets stolen or goes missing, the thief could easily read your keys and take your crypto, or you lose your crypto forever.

Know the Risks

No cryptocurrency storage method is 100% safe, even with the various security measures.

Risks of Storing Cryptocurrency in an Exchange

Storing your crypto on an exchange is often regarded as the easiest way to keep it, but you can also quickly lose it to hackers. If your exchange gets attacked, you could permanently lose your crypto, even though your passwords and private keys are safe.

Risks of a Cold Storage Wallet

Typically, cold storage is the safest way to store your crypto away from online hacks and security breaches. But you can also lose your crypto, especially if you lose your device or it gets stolen. Furthermore, water or fire damage can permanently cause your crypto to go down the drain, especially if you did not back up your seed phrase.

Risks of a Hot Crypto Wallet

Hot crypto wallets pose almost the same risk as storing crypto on exchanges. However, they’re relatively safer. If your device gets hacked or you accidentally install malware, your wallet could be completely drained.

Risks of a Paper Wallet

Your paper wallet is highly vulnerable to physical damage or wear and tear. These wallets are pretty inexpensive, but they‘re easy prey for attackers. The attacker only needs to get a hold of the paper to rob you. So, even if you have copies of the paper wallet, it doesn't help much since your private keys are on any copy you print out or keep in your device’s storage as a soft copy.

Factors to Consider When Opening a Cryptocurrency Account

Security: Review an exchange’s security features before setting up an account. We recommend you go with one that offers two-factor authentication or an additional security measure to the usual password feature.

Fees: Many exchanges charge a small fee for sending, selling, or buying cryptocurrencies. If you would like to trade cryptocurrency often, your best bet is to go with an exchange with moderately low fees to save you the extra money spent on charges.

Number and quality of supported cryptocurrencies for options trading: If your goal is to trade a variety of crypto assets, you will need to choose an exchange that offers more than just BTC and Ethereum (ETH).

Storage and custody: Using a custodial storage option like a hot crypto wallet is better if you're not too good with keeping passwords and passphrases. These options keep your crypto for you and can help you recover your password if you forget it.

Customer service: Although many exchanges have a customer care center or an email to reach them in case of issues, it’s preferable to go for one with a live chat option. Those have faster reply times and can be convenient for wallet-related emergencies.

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