How to Store Cryptocurrency Safely

Safe digital asset storage is a matter of great concern as cryptocurrencies, tokens, and NFTs are particularly appealing targets for cybercriminals who seek security breaches and take advantage of them to steal your funds. So no matter if you’re trading, using crypto for online casinos, iGaming, or other reasons, you have to keep your hand on the pulse. What is the best way to store crypto? On this page, we’ll share some best practices and ​​precautions to protect your crypto as well as provide recommendations on selecting an appropriate storage solution.

Key takeaways:

• Cryptocurrencies and other digital assets are typically stored in hot wallets (that are connected to the internet) and cold wallets (which are mostly offline).
• Cold storage like hardware wallets or steel wallets are considered a better option for keeping your assets in the long run due to their safety and durability.
• Always protect your recovery phrases and private keys, back up your wallets, and familiarize yourself with how they work.

Why Is Crypto Storage Security Such a Big Deal?

Unlike cash or gold bars that you can stack in a piggy bank or a physical vault, ownership of cryptocurrencies is solely proven through private keys. Failing to keep these cryptographic strings safe or exposing personal account credentials can lead to the irreversible loss of your funds. Likewise, if you send crypto to the wrong address, most probably, reversing or cancelling the transaction will be almost impossible.

In contrast to traditional banking systems, there are no central authorities or governmental institutions to have your back in case you lose your digital wallet or something goes wrong in the digital space. Each individual is responsible for the security of their own crypto.

Asset security isn’t something you can put off for later. Just one click on a phishing link or an obvious account password, and hackers can snatch your funds. The thing is that legal protection and recovery mechanisms for crypto users are highly limited. Your best defense? Prevention is the only remedy, so the least you can do to de-risk yourself from such incidents is to be proactive in terms of asset security.

Different Types of Crypto Wallets: Cold Wallets

The most common types of crypto wallets are hot and cold. Some factors that differentiate them are self-custody vs third-party custody, their offline and online nature, levels of security, and ease of use. Let’s start with an overview of cold wallets.

This type refers to an offline wallet (cold storage) that is permanently disconnected from the Internet or linked up only on demand. This peculiarity makes them highly secure as they’re not exposed to online threats and hacking risks, which is why they’re often chosen for long-term storage of large amounts and for protecting your crypto investments. So if you’re not planning to trade often, this type could be ideal for storing your assets securely.

Mind though that custody as well as asset management and security are solely your responsibility. And, on the downside, they aren’t as convenient if you plan on making frequent transactions and may be physically damaged or lost.

Paper Wallets

Cold storage options can be as primitive and simple as a paper wallet. It’s a printout of your public and private keys on a piece of paper. Keys give you access to your digital assets, and you can even generate them offline for additional security. Since it’s just a sheet of paper, you don’t have to worry about malware or online hacks. This storage option is free and you can make copies for backup which to stash in different places. But if you misplace this sheet, someone steals it, or it gets ruined by water, fire, or somehow else, there’s nothing you can do.

If you need something sturdier, a steel wallet like Cryptosteel or Billfodl is a more durable air-gapped storage alternative. Or you may engrave keys on a metal plate to protect it from fire or liquids. It’s also physically isolated from any network and never connected but it isn’t sheltered from loss or theft.

Hardware Wallets

Getting a hardware wallet is a more practical option. You can purchase a physical device like Trezor or Ledger for around 50 to 200 USD. They work sort of like USB drives but have built-in security features like PIN codes, encryption, and on-device transaction signing so that the private keys always stay on the device. You’ll also get a seed phrase for backup and recovery when you set up your hardware wallet that’ll allow you to recover your assets in case the device gets damaged.

Such a storage option is also offline, and you connect the device to your computer or smartphone only when you want to make a transaction. But just like a paper wallet, this device can be lost, damaged, or snatched by someone, making backups and secure PINs essential.

How do you set up a cold hardware wallet?

There will be different setup procedures based on which hardware wallet you purchase. But here’s an example of what you’ll have to do with Trezor Model One, which is a common top-selling cold wallet. Once you receive your ordered device, you’ll need to open your computer and download either the Trezor Suite desktop or web app from the official website. Then, unbox the device and connect it to the computer via the provided cable. The launched app will let you quickly set up the Trezor device, asking you to install the latest firmware version on it with a simple button click.

You’ll then need to either create a new wallet or recover one from a backup you have using the previously generated recovery seed. If you’re making a new wallet, you’ll be offered a default recovery process option using a Standard seed backup and creating a recovery seed phrase which will be recorded on the specially provided card. When generated, write down the list of recovery seed words in the exact order on the card. Then, set and confirm a PIN and optionally set a passphrase. Finally, choose the cryptocurrencies to show in the Suite by selecting them in the Activate Coins step and clicking “Complete setup”. We’ll talk about seed phrases in more detail later.

Hot Wallets

As you see, an offline wallet is perfect if you’d like to securely store high-value assets in the long run. What are hot crypto wallets applicable for? This kind is an online wallet that can be accessed using a mobile or desktop device, making it simpler for day-to-day use. It is convenient for active cryptocurrency trading or quick, frequent transactions. On the negative side, a hot software wallet is considered less secure due to its permanent internet connectivity, so phishing and other hacking attacks could be a risk.

Crypto Exchange Wallets

Some of the most widespread kinds of hot wallets are the ones embedded directly into a centralized cryptocurrency exchange like Binance, Kraken, or Coinbase. In this case, you store crypto assets in the exchange’s built-in wallet. This option provides benefits like trading simplicity, immediate access to your funds, fast transaction speed, lots of currencies on offer, using fiat money like USD, cryptocurrency exchange support, and the opportunity to earn profit from on-platform staking.

But apart from your assets being kept in a wallet of a centralized crypto exchange that’s constantly connected to the internet, you have to trust the service for safekeeping them as in this case a third party takes custody for storing your private keys. It is crucial to select trustworthy big-name cryptocurrency exchanges that have a customer support team to turn to and take security seriously because high-liquidity exchanges are common targets for hackers. Either way, it is best to transfer most of your digital assets to a private wallet for long-term holdings.

Standalone Hot Wallets

Personal hot wallets could be browser-based and app-based. Popular private software wallet options include Trust Wallet, MetaMask, and Exodus. Many of them come on a free basis, so you won’t have to pay for downloading and using them. Hot wallet setup and interfaces are usually straightforward, so even newbies can figure things out without much effort. Plus, this option can be handy if you need quick transactions, say, when you’re making purchases using crypto in online games.

Such wallets also typically support multiple asset kinds, letting you store different currencies and tokens. Yet just like any other hot wallet, a mobile wallet, online wallet, or desktop wallet is vulnerable to hacking. This is why the devices that are used for access have to be secure.

Other Hot Wallet Kinds

What else can you come across if you’re seeking how to store Bitcoin or other types of cryptocurrencies? For instance, you might hear about Telegram wallets, which are integrated right into this popular messenger. This in-application wallet provides the chance to store crypto similar to exchange wallets. Topping that, they also let you receive and send crypto right inside regular conversations with a friend or inside a group. This could be really good for microtransactions in games or if you’re betting. You don’t need to get a separate specialized crypto wallet app, transactions are quick, and the fees are rather low. However, since Telegram is foremostly a messaging app and not a fintech solution, it might not be safe enough for large transactions.

You can also encounter crypto gaming wallets that are specific to a certain game based on the blockchain. Some games have their own tokens, so such an NFT and Web3 crypto gaming wallet as Enjin might be a good solution for the ecosystem.

Major Takeaways on Various Crypto Wallet Types

Wallet Type	Examples	Best For	Security
Cold Paper/Steel Wallet	A private key printed on a sheet of paper or  engraved on steel	Offline storage of private keys to crypto assets	Completely offline but can be damaged physically
Cold Hardware Wallet	A physical storage device like Trezor or Ledger	Highly secure long-term storage of large crypto amounts that you don’t use regularly	Connected only when necessary, but can be damaged physically
Crypto Exchange Hot Wallet	In-built wallets on centralized exchanges like Binance, Kraken, or Coinbase	Good for frequent use and storing small amounts of crypto for fast transactions	The exchange takes custody of assets, may be vulnerable to hacks
Standalone Private Hot Wallet	Software wallets like Trust Wallet, Exodus, or MetaMask	May be convenient since it’s a hot wallet you take custody of	The user is responsible for the wallet, but it’s still online
Telegram Crypto Wallet	Telegram Wallet	Good for microtransactions made right inside the messenger	Could be prone to security risks since it’s a messaging application
Crypto Gaming Wallet	NFT and Web3 crypto gaming wallets like Enjin	Offer fast access to decentralized apps and specific blockchains	Come with security risks if misused

Choosing the Right Crypto Wallet for Crypto Gaming

Deciding how to buy crypto and where to store cryptocurrency is up to the user. How should you select the optimal type of wallet for you?

Overall, if you’re engaged in daily transactions and such points as high-speed trading and quick processing are important for you, then hot software wallets could be a good option. Because many gaming activities are time-sensitive and require that users make fast transactions, like when placing bets or making in-app purchases, such cryptocurrency wallet types can be more convenient for quickly sending and getting funds. Plus, they can interact with various online platforms and services more easily. As such, the aforementioned MetaMask and Trust Wallet are a good fit for blockchain-based games.

What’s for crypto exchanges, mind that unusual tokens might not be available for purchase on a CEX like Kraken. In this event, you’ll have to go to a decentralized cryptocurrency exchange (DEX) or look for them elsewhere.

Continuing the online wallet vs offline wallet comparison, speed and convenience have a flip side: security vulnerabilities. Therefore, you must take extra precautions to keep your crypto assets safe, including two-factor authentication (2FA) as such security hygiene can safeguard your assets from theft. Even more so, refrain from storing large amounts in hot wallets, since using cold wallets for the long term is the safest way to store crypto.

Other Factors You Should Consider

The frequency of your transactions is one of the main points. How often are you going to make them? If you need quick access to your funds and to make fast trades, then it’s reasonable to keep a portion of your assets in a hot wallet. For example, you can store some crypto in an exchange wallet like Coinbase or a software wallet like MetaMask to have it at your fingertips when you need to place a bet or buy something in the game without delay. This could be convenient if we’re talking low amounts, but mind that cryptocurrency custody is on the exchange’s end, and exchange security could be an issue.

The amount of crypto you’re planning to store is also noteworthy. If you have large sums that you don’t need constant access to, cold storage options like Ledger are your safest path. Your funds will be offline and inaccessible to others, so it’s a good idea to keep the majority of your assets there.

Remember that security should always be your number one priority, so learn about the wallet’s security features in advance. Does it support multi-factor authentication? Which advanced security features are available? Who manages the private keys? Browsing descriptions and user reviews could help make up your mind.

The kinds of tokens and NFTs you use are equally important. For starters, mind platform compatibility and find out whether the wallet you want to use supports the cryptocurrencies, platforms, and blockchains you need. For instance, MetaMask has integrations for games based on Ethereum. People engaged in iGaming often use Ethereum, Binance Smart Chain, Polygon (MATIC), Solana, Immutable X, Wax (WAXP), and Flow, whereas Tron, EOS, and WAX are common for crypto casinos, and Cosmos is popular for both. Then, do research on transaction speed, fees, and deposit and withdrawal policies, which differ from platform to platform. 

Moreover, some virtual currency is unique, so if you’re playing a game with niche tokens and you need frequent swaps, which could be the case for Axie Infinity, Decentraland, or The Sandbox, then you have to additionally check that the wallet supports your game’s tokens.

Which Hardware Wallet to Choose for iGaming and Crypto Casinos

Many of the popular hardware wallets include Secure Element chips, have USB connectivity, offer PIN and passphrase protection, and support thousands of coins and tokens. Here’s a table overviewing cold wallet devices commonly used for crypto casinos and gaming to help you determine the best crypto storage solution for your case.

Hardware Wallet	Approximate Price	Supported Blockchains	Token and NFT Storage	Wallet Security / Ease of Use	Extra Characteristics
Ledger Nano X	130 USD	Directly: Ethereum, Bitcoin, BNB Chain, Polygon, Solana, Flow, Immutable XVia integrations: Cosmos, Tron	Tokens: yes NFTs: yes	High security, simple in use	• Built-in Bluetooth• Ledger Live App• Large storage capacity• Pocket-sized and portable• High-resolution display
Ledger Nano S Plus	70 USD	Directly: Ethereum, Bitcoin, BNB Chain, Polygon, Solana, Flow, Immutable XVia integrations: Cosmos, Tron	Tokens: yes NFTs: yes	High security, simple in use	• Compact and portable• Ledger Live App• Battery-free connection
Trezor Model T	130 USD	Directly: Ethereum, Bitcoin, BNB Chain, Polygon Not directly: CosmosVia integrations: Tron	Tokens: yes NFTs: yes	High security, simple in use	• 1.54-inch vivid color touchscreen• Password manager• Trezor Suite app• MicroSD card slot
Trezor Model One	50 USD	Directly: Ethereum, Bitcoin, BNB Chain, Polygon Not directly: CosmosVia integrations: Tron	Tokens: yes NFTs: yes	High security, average usability	• 0.96-inch OLED screen• Two-button pad• Micro USB connection
KeepKey	80 USD	Directly: Ethereum, Bitcoin, BNB Chain, Polygon Not directly: CosmosVia integrations: Tron	Tokens: yes NFTs: yes	High security, average usability	• 3.12-inch OLED display• Thorchain integration• KeepKey Desktop App
Coldcard	170 USD	Bitcoin only	Tokens: yes NFTs: limited	Very high security, difficult to use	• Completely air-gapped• Numeric keypad• Bright LCD screen
BitBox02	100 USD	Directly: Bitcoin, Ethereum, Litecoin, Cardano Not directly: Cosmos	Tokens: yes NFTs: yes	High security, simple in use	• MicroSD card•  BitBoxApp•  WalletConnect support
SeedSigner	< 50 USD	Mostly Bitcoin storage	Tokens: yes NFTs: limited	High security if set up properly, difficult to use	• Open-code DIY signing device• Air-gapped• QR-exchange signing model
SafePal S1	60 USD	Ethereum, BNB Chain, Polygon, Cosmos, Tron	Tokens: yes NFTs: yes	Highly secure storage, simple in use	• 1.54-inch color screen• 15 languages• USB-C and camera for QR code scanning• SafePal App

Possible Crypto Storage Combinations

Essentially, your choice doesn’t have to go down to selecting between a hardware wallet vs software wallet. You’re free to make the most of several kinds simultaneously. Here are a few examples of wallet combinations for effectively managing your crypto assets.

Let’s say you’re using crypto for iGaming or an online casino, then you can have some of your funds on an exchange wallet like the Kraken or Coinbase Wallet. This will make it easy to access, deposit and withdraw funds, and trade them, including using fiat money like US dollars. You can also have a personal hot wallet like Trust Wallet for making occasional and quick in-game transactions and purchases, but check that it supports blockchains and tokens used by your gaming platforms. At the same time use a cold wallet like Trezor for storing larger sums or valuable NFTs, as hardware wallet security is much higher than what online ones can offer.

Crypto Storage Best Practices

If you have doubts regarding how to secure your crypto wallet, here’s a collection of recommendations to help you maintain safe access to your assets.

Set Complex Passwords

Your account passwords and wallet passphrases must be unique and complex. Otherwise, they’ll be hackable. Randomize them, mixing digits with various case letters and maybe even symbols for extra security. A separate password manager like 1Password can be handy.

Some cold wallet devices like Trezor let users protect their devices using a PIN. In some cases, this code can include up to 50 digits. Moreover, it is not advisable to use “remember me” shortcuts as this can compromise account safety.

Safeguard Your Seed Phrase and Keys

What is a seed phrase? A seed phrase (recovery phrase) is a backup for your private keys. It’s made up of 12 to 24 random words that can be read by humans like “dream ocean rocket crystal whisper puzzle brave ancient echo blanket shadow mirror”. For example, the phrase is referred to as Standard Backup by Trezor. Seed phrases are generated during wallet setup, you’ll use them in case you need to recover access to your wallet, for instance, if the wallet device gets damaged or you lose it. 

This is specifically why you should be extra careful not to lose the seed phrase or share it with anyone, even your provider. It’s also recommended not to store it digitally, as it could get exposed on your smartphone, computer, or cloud storage. So don’t keep it online or even take pictures of it. For extra safety, use hardware wallets, encrypted USB drives, or steel wallets. 

Make Backups

Another way to safeguard your assets when you store cryptocurrency is by making reserve copies of your wallet. Additionally, make copies of the seed phrase and private keys, make regular backups, and keep them in several secure physical locations.

What is more, some wallets like Trezor support and even advise users to apply Shamir Backup, which is a cryptographic method based on a special algorithm. It splits recovery secret phrases into shares, which can be located in different places.

Enable Multi-Factor Authentication

Using two-factor authentication for crypto accounts to secure your assets and seed phrases from theft is among the crypto storage security tips you’ll hear most often. Be it an exchange account, your wallet, or any platform where you’ll be using crypto, a time-sensitive 2FA code can boost security. It is best to use a separate authenticator app like Authy instead of getting such one-time passwords via SMS codes on your smartphone.

As a rule, 2FA can be enabled in the “Security” settings of the wallet. Once you click the button or toggle to enable two-factor authentication, the wallet might ask you to reenter your password. It may then show a QR code, if so, open your authenticator application and scan this QR code there or enter it manually. Verify the connection by putting the code from the app to your wallet.

Mentioning additional privacy-enhancing practices, people sometimes use the Tor browser to conceal their real IP address and location. This gives more anonymity, and some hardware wallets like BitBox02 and Trezor suggest this solution for those who want to protect their identities.

Consider Multi-Signature Wallets

A multi-sig wallet approach can also be effective. It means that one key won’t be enough to access the assets, so even if it gets compromised by an attacker, the transactions won’t be authorized. There are various setups, such as 2-of-3, meaning that at least two private keys of three will be required to allow transactions. This path is commonly used by organizations with huge amounts of crypto that have several holders and may use institutional crypto storage.

Avoid Phishing Scams

Fake crypto websites and phishing sites are not uncommon. You have to be really careful not to swallow the bait. What do scammers want you to fall for? They often impersonate renowned platforms, including exchanges, crypto wallets, games, or even online casinos. They also try to trick you into clicking on a link and sharing your personal information. In many cases, they stir people into action by pressuring them with urgency. Here are a few things to mind.

• Scammers often take advantage of your low attention to detail, specifically they often fake URL addresses that are similar to legitimate ones. Double-check the sites you visit for misspelled words, typos, or any additional characters or words in the address. Mind the subdomains or extensions, as .com may be replaced with less trusted ones like .io.
• Apart from that, check the address bar to see whether the site is secured with HTTPS, as SSL encryption is also an important marker.
• Similar-looking names or profile images can also be scam signs, yet usually, the quality of the design is poor. You may see lots of generic text too.
• They also often play the “free cheese” card, hooking people with unrealistic bonuses, freebies, giveaways, and easy money or rewards. 
• A lack of a verification process should also cause suspicion. If you’re playing a game or placing bets and the platform doesn’t try to verify your account, this might be a red flag.

What else can you do to not fall prey to scammers? For starters, opt for trusted platforms and wallet storage, as well as official websites and channels. If you’re downloading an application, do it from official sources like the App Store or Google Play, and don’t fall for the hook of links sent via email, messengers, or social media.

Even if you want to test out something new, read reviews on TrustPilot or look for a community of users on Reddit. You can also try to find out about the platform’s licensing. As such, many crypto casinos feature information regarding their regulation that’s often in Malta. If there’s no social presence of the platform, this should raise suspicion.

In general, don’t click on links in pop-up ads or emails and don’t open attachments. If they’re asking for sensitive information like your personal details, a password, seed phrase, private key, or ID, this is likely a scammer hook. For example, you might get strange messages with links on Telegram or other social media. Or you could receive an email, requesting to click on a link for account login or to press a button to verify your account. And although the sender’s address may look real, this could be a phishing attempt with malicious files or a link leading you to the wrong website. In fact, you can check the URL mentioned in the latter point by hovering over a link without clicking on it.

You can also use tools for phishing detection like MyCrypto or Web of Trust. If you’re using a wallet like MetaMask, it has built-in browser security protection from phishing.

Keep an Eye on Your Transactions

Monitoring the activity of your wallets is helpful as well. Going through your transaction logs from time to time can allow you to spot something unauthorized. You may also make use of block explorers like BscScan or Etherscan which are designed to track blockchain transactions. Besides, if your wallet has transaction alert functionality, enabling such notifications will let you be informed.

Make Sure Your Devices Are Secure

Keeping software updated is integral. This regards updating your wallet and getting the latest versions of your smartphone’s and computer’s operating systems, as each release has enhancements like the latest security patches and fixes. Even better, install antivirus software like Bitdefender on your devices to be prepared for new threats and encrypt your devices for more protection.

It is not recommended to use public networks like WiFi in a restaurant when you log into your wallets. Some prefer to use VPNs when accessing crypto casinos to protect their IP address.

Consider Getting a Cold Wallet

Lastly, if you can, keep most of your cryptocurrency and digital assets in hardware wallets. What’s the safest place to store crypto? These are secure crypto storage solutions that’ll let you keep online threats to a minimum. The following comparison table outlines the vital highlights on popular cold wallet security features.

Hardware Wallet	Level of Security	Security Chip Type	PIN-code / Passphrase	Multisig	Backup and Recovery	Open-code	Reputation
Ledger Nano X	High	Secure Element	Yes/yes	No	Seed phrase	Partially	Great
Ledger Nano S Plus	High	Secure Element	Yes/yes	No	Seed phrase	Partially	Great
Trezor Model T	High	Secure Element	Yes/yes	Yes	Seed phrase	Yes	Great
Trezor Model One	High	ARM Cortex-M3 processor	Yes/yes	Yes	Seed phrase	Yes	Great
KeepKey	High	Secure Element	Yes/yes	No	Seed phrase	Yes	Good
Coldcard	High	Secure Element	Yes/yes	Yes	Seed phrase	Yes	Good
BitBox02	High	Secure Element	Yes/yes	Yes	Seed phrase	Yes	Good
SeedSigner	High	Relies on the user’s environment	Yes/yes	Yes	Seed phrase	Yes	Good ( community)
SafePal S1	High	Custom security architecture	Yes/yes	No	Seed phrase	No	Good

Final Thoughts on Protecting Your Crypto Investments

Crypto lacks the same level of protection as traditional bank accounts. So when you use cryptocurrency for trading, gaming, betting, and other activities, safe storage is solely your responsibility. This means you have to know where to store Bitcoin or other kinds of cryptocurrency securely to reduce the risk of loss from hacks or scams. 

Although custodial services like hot wallets on exchanges are handy for frequent trading, you trust a third party and its security measures and can get locked out. That’s why it’s better to use a combination of hot and cold self-custody wallet solutions: use hot wallets for smaller trading amounts and place the bulk in a cold wallet for maximum security. We hope that now you have a better understanding of how to choose the best-fit crypto wallet and know more about protecting your crypto assets!