Securing Your Digital Assets: Hardware Wallets

What a year 2020 was!

And 2021 is proving to be just as difficult in terms of global economic activity. Unemployment still trending with a looming outlook of inflation from the CPI numbers being seen.

With all of this activity going on for the past year, we have seen unconventional activities in the equity markets and meme stocks along with a push towards digital tokens and assets known as cryptocurrency.

Blockchain has not only become a buzzword in the internet era but also has been on the minds of many people in the retail, institution, and family offices across the world.

With this shift of activity of investment, there has also become a push towards cyber-security as recent online attacks and malware attacks on company infrastructures such as the "Colonial Pipeline" hacks and numerous other attacks on fortune 500 businesses have left the average person in retail and industries looking for more and more ways of securing their files.

With cryptocurrency over the years, there have been many notable incidents that have compromised confidence in the security of these assets. The MT.Gox scandal (2011-2014) left many users across the globe holding the bag for a total of 850,000 BTC (Bitcoin) during multiple heists that went on to be one of the biggest scandals of online exchanges and is one of the biggest historical security threats in the crypto world in the over 12 years of total crypto existence.

As more and more retail investors have jumped into this space, the issue of security has become at the top of people's minds of "How can I keep my crypto assets safe from these types of attacks?".

"Hot Storage" refers to internet-connected/ storage such as cloud solutions and exchanges that keep private keys for you.

"Cold Storage" refers to anything that is not connected to the internet such as a hardware wallet (Trezor/Ledger) that allows safekeeping and the possibility of malicious attempts nearly impossible.

Cold storage solutions to the average retail investor and small and medium-size institutions have reduced in price over the years and the average cost is less than $200.

Above, is my personal investment in 2 hardware wallets from Ledger. The Ledger Nano X. This solution allows me to keep your crypto assets such as Ethereum, Bitcoin, and many other ERC-20 (Ethereum based) crypto assets safely locked away in a cold storage solution with push-button/password activity to send and receive crypto without the possibility of risking your crypto being on an exchange or being hacked and stolen.

Setup

1. Buy a particular cold storage solution
2. Set up with passphrase seed for recovery in case hardware is lost, stolen, or loses the ability to function. This allows you to recover your assets. (This is a common question I get from people about "What if I lose my hardware wallet?")
3. Setting up code for use.
4. Sending crypto from exchanges to cold storage solutions and keeping it in a very secure location.
5. Your done! that is it.

Peace of mind and security is one of the most important aspects of owning any type of asset whether it be a security system at your home or the peace of mind that comes from knowing that the assets you own are safely stored away.

With encryption being at the heart of cryptocurrencies, it also allows the ability for property to be lost or stolen with the difficulty of retrieving it back.

I suggest to everyone that they should either look into the basics of cold storage or personally invest in these solutions for safe-keeping.

If you are new to this space, I would highly recommend that everyone at least takes a look into the personal security of tokens and what this means for the safety of your digital property.

Best Regards,

Matthew Nickerson