What's a Cold Storage Wallet?

There’s a saying in the crypto community, “Not your keys, not your crypto.” And what that means is when you leave your crypto on a public exchange, that exchange retains full control of your assets, regardless of the fact that you bought them. In essence, they own the "keys" to your funds for as long as you store them on their exchange. So the smart thing to do is to buy a self custody hardware wallet, also known as a cold storage wallet so that you can transfer your crypto from the exchange to your (cold storage) for safekeeping. Thus, you retain 100% control of your investment.

If you don’t self custody your assets you run the risk of losing them in one of several different ways. Just two examples being hackers stealing your crypto off of the exchange, or even the exchange itself suddenly going out of business. And yes, both of those scenarios have happened in the past resulting in countless customers losing money.

There are several great cold storage wallets to choose from but I personally use the Ledger Nano X. In fact, I use several Ledger Nanos to hold my crypto and NFTs. So from here on out I'm only going to talk about the Ledger. In a nutshell, the Ledger is a physical device that works similarly to a USB drive. It plugs into your computer's USB port and you use a PIN code to access control of the device in order to transfer your crypto (to and from) the Ledger wallet. They also have the Ledger Live app for your phone if plugging into your computer isn't an option at the time you need to make a transfer.

One thing I can’t stress enough is to ONLY buy your wallet from the Ledger company’s website. (www.ledger.com) Do not buy a Ledger from a third party. Even if it’s on Amazon. I'd even be cautious buying one from Best Buy. Don’t do it! I’ve heard too many horror stories of innocent people getting scammed by a compromised wallet that they bought from a third party vendor.

Buy your Ledger from their direct website and it will be shipped to you quickly. When it arrives it should be in a cellophane wrapped box with no pre-existing keys assigned to the device. (The "keys" by the way are a long string of words given in a specific order) and they’re given to you when you first set up the Ledger via their website. You will need to write the secret words down in the exact order given and then save them in a secure location. Don't ever simply take a picture of your keys/secret words and store them on your phone. Write them down and hide them. Better yet, put them in a fire proof safe. This is your investment; your money; and you need to protect it.

Also, no one but you should ever know what those secret words are…period. The whole purpose for the keys is if you ever lose your Ledger, or it burns in a fire, or is dropped in the ocean, or whatever the case, you can buy a new Ledger and reset it with your original keys and therefore restore your original assets. With that said, DON'T give your keys/secret words to anyone. Ever. Full stop. Anyone who claims to need them for ANY reason is lying. Think of it this way. Would you just hand someone your housekey with directions to your house? Or give them the combination to your safe? If someone asks you for your secret words they are attempting to scam you. Because they too can access your crypto with a new device after setting it up with your secret words.

If you're ready to take full control of your crypto assets, please do your own research. You can go to the Ledger website to learn more about the different types of Ledgers that they offer as well as watch informative tutorials about the benefits of using their wallets.

Thanks for reading my blog, and please check back often! All affiliate links will direct you to items and services that I personally use. Not financial advice.