The apparent and fast growing Corona virus pandemic has put a real dent in the world’s economy, causing fluctuations in stock markets and huge drops in market prices and profits. Crypto currency has shown unpredictability with this crisis. Crypto currency are usually digital assets that is used as a medium of exchange and utilizes robust cryptography to secure financial transactions, manage the creation of additional units and confirm asset transfer. This unpredictability in the world markets leaves crypto users thinking about what the best way to safely move and store their crypto currency would be.
What should you do with crypto during this crisis?
In most cases crisis usually spells out opportunity for crypto currency lovers. This time however, this is no regular crisis due to the unpredictable future of this pandemic. Just recently the price of bitcoin dropped by almost 18 percent the largest drop in a very long time and other alt crypto currencies have followed suit. This volatility in Crypto currency has pushed these investors to look for way to store their crytpocurrency or liquidate it. This crisis stands to be the biggest test for cryptocurrency with conflicting ideas on the possible outcomes. As some people have started doing their transactions in cryptocurrency others are storing their crypto in the hopes that it will be even more valuable at the end of the crisis. These people need insight into how best to store their crypto during this pandemic.
Where can you store cryptocurrency?
In order to use cryptocurrency, you are expected to have a crypto wallet. This refers to a software program that has been specifically designed to meet your crypto storage needs. It is used to store your public and private keys, carry out transactions with your digital currencies, monitor your crypto balance and interact with block chains. They are a necessity when it comes to safely managing crypto assets. Cryptocurrency wallets can either be hot wallets or cold wallets. Hot crypto wallets are usually connected to the internet and can be accessed at any given time. They are in form of online cloud wallets, exchanges and most mobile and software wallets. Cold wallets on the other hand are not connected to the internet and store the crypto funds offline. With cold wallets funds can still be received but cannot be transferred out. They are also called hardware wallets and include offline storage devices like USB disks, offline paper wallets and sometimes physical bearer items as seen with physical Bitcoin.
Types of cryptocurrency wallets
Cryptocurrency wallets are categorized into paper wallets, cloud wallets, hardware wallets and online wallets. Paper wallets are cold storage wallets and are a physical paper print of your private and public keys. They offer a high level of security and are easy to use. They are usually printed and can be imported into a software client by scanning the QR code on their faces. Cloud wallets are hot storage wallets and include Guarda, Metamask, Coinbase and Blockchain Info. They are more vulnerable to theft and insecure access as they are stored only and are accessible by third parties. Funds from cloud wallets can be accessed from any connected device and so they are super convenient. Software wallets on the other hand are installable on smartphone and computer devices. This form of hot storage is secure except when it comes to hacking and their exposure to computer viruses. Examples include Jaxx, Exodus Infino Wallet, Electrum Wallet and Freewallet. They give the user a chance to access their funds through multiple devices. Hardware wallets are cold storage that offer external storage for your private keys. They include USB storage devices or hardware wallets from Ledger, Trezor and KeepKey. Some hardware wallets allow for interaction with web interfaces and are compatible with multiple currencies. To use them, you plug into an online device, open your wallet and perform your transactions. They are considered the safest as they are completely cold and secure and should be considered during this time of crisis.
Which of these wallets is ideal during the Corona Crisis?
Hardware wallets are considered the most robust and secure option for crypto currencies and as such would be ideal in this time of Crisis. Giving you the chance to physically hold your tokens means you actually own them and you are the one who determines their risk. When selecting hardware wallets it is recommended that you use recognized security purpose hardware wallets such as Trezor and avoid using USB drives. USB drives are prone to hardware failures and are not secure as they can be accessed by anyone. Before ordering for one, it is advisable to research available information and reviews so as to pick the best hardware wallet for you. It is recommended that you order a legitimate Hardware wallet as soon as possible as they take up to 2 months to arrive. They are however properly secure and come with cases that aren’t vulnerable to external damage.
How to secure your hardware wallets
As much as these wallets are considered the most secure, they also have their risks and insecurities. Improper management and storage of these wallets could lead to their breakage, misplacement and loss of your tokens. This is why a seed phrase is necessary when using a hardware wallet for your crypto. A seed phrase is a list of words that contain all the information needed to recover your crypto tokens. Hardware wallets come with software that generates a seed phrase that the user is expected to write down and keep securely for future recovery use. Experts and experienced users usually stick to 5 golden rules to ensure the safety of their wallets. A user should never share their 24-word seed phrase with anyone. Their physical recovery sheet should be secured properly to avoid damage and loss. Recovery phrases should be stored on a computer or smartphone. Users are advised to only trust the information they see on their wallet screens and verify their payment information and receiving address. Information displayed on your computer, smartphone or wallet screen should be treated with caution as it can get compromised at any time.
Pros and Cons of Cold Storage
Pros
Hardware wallets are safe and secure. They can’t be copied but can be restored when secured with a seed phrase. They not easily prone to physical damage. Paper wallets are free to use, carry and are often given as gift cards. USB drives are also easy to use and are readily and cheaply available.
Cons
Most hardware wallets are not free to use. They are also not waterproof and may break when subjected to extreme conditions. Paper wallets can easily be torn, burnt, rot over time and are not waterproof. Whoever can see them can steal them and they are quite easy to copy. They also don’t come with a restore option and if damaged the tokens are completely lost. .
Conclusion
During crisis it is common place to see people getting their funds together in readiness for the long haul. Investors weigh their options and decide whether to trade or liquidate while other people decide to have their fund on hand in readiness for emergencies and day to day needs. Wherever you fall in this category as a crypto currency user it is necessary to secure your tokens. Hardware wallets should be considered as the best option as they will give you the easiest and most secure way to handle you crypto currency in this time of crisis.
