How to store cryptocurrencies securely? (Detailed instructions)

© Ledger

The issue of storage is a fundamental problem in the cryptocurrency ecosystem. If you can easily find tutorials on the internet that explain how to buy cryptocurrencies, there is a bit of talk about storage. So how do you store cryptocurrencies?

In the course of this article, we will tell you about the various solutions that allow you to store your cryptocurrencies in a more or less secure way. We will look to conclude which option is the most suitable according to your needs.

How a digital wallet works

The digital wallet is translated into English with e-wallet, generally abbreviated wallet. It is this last term that we will use throughout this article. So how does a wallet work and how do you use it to store cryptocurrency?

We can compare the wallet with a bank account, to facilitate the understanding of the whole. As soon as you have a wallet, you will receive two different keys: the public key (which can be compared to a RIB / IBAN) and the private key (which will be compared to a password to access the bank account).

Like RIB and IBAN, the public key in a wallet is used only to identify the user. This key can therefore be shared and must also be made available to other users who wish to complete a transaction for your wallet.

Conversely, the private key, as the name suggests, is private. Under no circumstances should it be sent to others as it provides access to the contents of the digital portfolio. If your wallet’s private key ends up in the wrong hands, your cryptocurrency may disappear forever. Even if they are stored on a secure device.

So that’s how a crypto wallet works. In the rest of this article, we will look at the different types of wallets on which it is possible to store cryptocurrencies, including Bitcoin, Ether, etc.

The different types of wallets where cryptocurrencies need to be stored

As we have suggested, there are different types of purses. The operation generally remains the same, but it is often on the storage system that the difference is made.

There are two separate categories: the “cold” purse (offline purse) and the “warm” purse (online purse).

Offline wallets

Offline wallet or cold wallet is a method of storing cryptocurrencies outside the network. Since there is no way to access it remotely, it is the most secure category of wallet. Because of its security, the cold wallet is favored by the most cautious and those who have a relatively large number of cryptocurrencies.

There are two types of offline wallets: the hardware wallet and the paper wallet. These two options allow you all to store cryptocurrencies without being connected to the Internet. As you will see below, the transaction method is a little different.

Hardware wallet

The hardware wallet is a “physical” storage medium for cryptocurrency. In other words, it is a fully-fledged electronic device that allows Bitcoins, Ethers and other cryptocurrencies to be stored independently of the Internet. The hardware wallet is very popular among users who have a relatively large reserve of cryptocurrencies.

Currently, the reference in terms of hardware wallet is the French start-up Ledger. Following successive fundraisers, the Parisian start-up has established itself in the international market. It must be said that the Nano S, the storage medium for cryptocurrency proposed by the team, was quite revolutionary at the time.

But while the Ledger Nano S appealed to many cryptocurrency investors and users, the Ledger Nano X only strengthened the already dominant position of the startup in the cryptocurrency storage wallet market. In fact, the Ledger Nano X meets all the requirements in terms of safety and practicality.

Buy a Ledger

Ledger Nano X is wireless, a storage medium equipped with a Bluetooth chip. Thanks to this technology, users can control the storage of their cryptocurrencies from a mobile application and this always without the need for internet access. Despite the presence of Bluetooth, this device remains in the offline wallet category.

Ledger Nano X Wallet cryptocurrencies
© Journal du Geek

Paper purses

The second choice with regard to cold wallet is the paper wallet, which could simply be translated into paper wallet. It is a relatively secure option for storing crypto as there is no interaction with any other electronic device except through a camera.

On a wallet, the wallet’s public key is printed as well as a QR code. By scanning it from the camera on a smartphone, therefore, there will be an interaction. The action triggered by the scan of this QR code is only to transfer cryptocurrencies to this wallet, making it even more secure.

To get cryptocurrencies out, however, the operation is a little more complicated. You will need to use another type of wallet (online or desktop) where you will provide the public and private keys and then access the content.

In any case, in addition to its undeniable security, the paper wallet has the advantage that it is completely free. Its only drawback is that if it gets lost, the paper takes all stored cryptocurrencies with it. It is therefore important to make a copy.

Online wallets

Now let’s move on to the online wallet or hot wallet. As you will understand, this is a digital wallet whose operation requires internet access. Online cryptocurrency storage is the most popular.

It is much easier to use and you can manage your cryptocurrencies anytime and anywhere as long as you have internet access.

The only criticism that can be leveled at this type of wallet is that it is online and therefore available externally. This is the reason why it is recommended to make a decision with great care.

To save you hours of research, we advise you to choose ZenGo, an application that has already proven itself in crypto storage. This is an online wallet where only that user has the private key. Thus, only this user can access the contents of his wallet.

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Reviews-ZenGo
ZenGo wallet interface for storing cryptocurrencies © Journal du Geek

ZenGo is focused on the safety of its users. In fact, the application offers an innovative system associated with the private keys for your cryptocurrencies. Instead of a traditional private key, ZenGo divides it into two parts: one part is stored on the company’s servers, the other on your smartphone. Thus, the user is the only person who can access their funds, even ZenGo does not have the option.

Download ZenGo

ZenGo also has a particularly powerful face recognition system. This way, only the user’s face can open the app.

To use ZenGo, go through its mobile application (Android or iOS). This is the only way to access the service. To download the app, you can get started by clicking here.

Desktop wallets

The desktop wallet is a “desktop” version of a digital wallet for storing cryptocurrencies.

If we have not classified the desktop wallet in either the online category or the offline category, it is because it is a bit of a mix of these two storage solutions. It can therefore be considered in a separate category.

Desktop wallet is software that allows you to store your cryptocurrencies directly on your computer. However, there are two very different types for this category: the full purse (complete purse) and the light purse (light purse).

The light purse

The lightweight wallet or the lightweight wallet (or even the lightweight client) is a desktop wallet that does not download blockchain and performs a simplified transaction verification.

Like Exodus and Electrum, these storage solutions are particularly lightweight, and their operation is similar to the ZenGo application, but on a computer.

The full purse

Like Bitcoin Core, there is also the full wallet or the complete wallet, which works completely independently of the network. The software that will act as a wallet on your computer will download the entire blockchain for that cryptocurrency to store it on your computer’s hard drive.

By installing a full wallet on a computer, it becomes a full node and helps secure the network. The owner of this computer thus becomes a minor and will be paid for his participation in securing the network. However, this solution is not suitable for everyone. Beginners, or people who do not want to spend a lot of time managing their cryptocurrencies, can find an alternative through wallets that are much easier to use like the one offered by the ZenGo application.

Which storage solution should you choose? Our advice

What we can learn from this article is that when it comes to storing cryptocurrencies, there is a solution tailored to each need.

If you are looking for crème de la crème in terms of safety, it is better to turn to a cold purse (offline purse). The latter is not connected to the Internet and is therefore impossible to hack remotely. In this sense, you can choose between the Nano S or the Nano X in the start-up Ledger, which manifests itself in the form of a USB key.

Get a Ledger Wallet

Note that in this specific case, if your offline wallet is unavailable to you, all the cryptocurrencies it contains will be unavailable forever. This is a risk that needs to be considered, whether it is a hardware wallet or a paper wallet. The paper purse is all the more fragile as it can be very easily lost or damaged.

The obvious alternative to avoid losing your cryptocurrency storage medium is to use a hot wallet (online wallet). This is one of the main arguments for this type of storage in addition to its ease of use. That is what explains its popularity. And as such, you can choose ZenGo, which is much more secure than a hot wallet such as Metamask.

As for the lightweight wallet, this solution is not very interesting as its working principle is similar to the online wallet but on a computer. Using ZenGo’s mobile app is much simpler and more flexible.

Storing cryptocurrencies on the ZenGo app

Zengo

ZenGo

Editor’s note


9.4 / 10


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