How to Store Cryptocurrency such as Bitcoin and Ethereum
Before we discuss how to store cryptocurrency, keep in mind that blockchain is a system with multiple databases (ledger) that are transparent and spread over the network. This means, all these databases agree and acknowledge that your cryptocurrency address has any X Bitcoin, Ether or digital currency you have. What you actually store is not cryptocurrency or Bitcoin itself physically, but the key (private key) to access the cryptocurrency.
So basically, the cryptocurrency wallet is a platform, software, app, or the like, that has your cryptocurrency address and key.
Your Cryptocurrency Storage Category
First of all, let's look at how to save cryptocurrency from the properties category save it:
- Online or offline:
Online: Suppose your cryptocurrency is stored in an online exchange, your computer, or your mobile phone connected to the internet.
Offline: For security, many people choose to store their cryptocurrency on a paper (in physical print on paper), or on a computer that is not connected to the internet.
- You save yourself or entrusted / entrusted to another party:
You save yourself means you own the key / private key to access your cryptocurrency.
Entrusted to another party: Suppose you keep it on an exchange or in an online wallet
How to Save Cryptocurrency
Once we know the categories of properties of storing cryptocurrency above, let's discuss the options for how to store your cryptocurrency:
- In an exchange
Many people buy and store their cryptocurrency on exchange like Bitcoin.co.id. This way, you do not actually hold your private key cryptocurrency. They have it.
Here, you trust the exchange to store your cryptocurrency; and they tell you on their platform, how many Bitcoin or Ether you have there.
This is an easy way to store your cryptocurrency. But the risk is if there are hackers who attack their system and steal your cryptocurrency. - In the online cryptocurrency wallet
Besides they are an exchange, Bitcoin.co.id is an example of an online wallet. You can buy Bitcoin from them, and they will keep it for you.
With Bitcoin.co.id, you do not keep your key / private key cryptocurrency. You entrust your cryptocurrency to them.
This method has the same risk of storing your cryptocurrency in an exchange. - In a cryptocurrency wallet software (eg on your computer)
There are many software cryptocurrency wallets that you can download to your computer, such as Armory for Bitcoin, and Ethereum Wallet for Ether.
With software like this, you keep your own key / private key.
This method also has risks. For example if you lose your password or private key key. Other risks eg your computer is broken or your friend steals your private key key. But with this method, you can say you have full control over your cryptocurrency. - With a hardware wallet
This method is the safest method to store your cryptocurrency.
2 of the most popular hardware wallets in the cryptocurrency community are Ledger (their products include Ledger Blue and Ledger Nano S) and Trezor.
With a hardware wallet, you will always need this hardware to access your cryptocurrency, making it more secure. And you also usually have to give a physical approval to make transactions. This feature can improve security, because if there are hackers who attack your computer, the hacker will not be able to press the physical button in your hardware to provide transaction approval.
If your hardware is lost, you can import your old wallet with your secret phrase password. It's important to remember to keep your secret phrases safely, because this phrase can be used to import your cryptocurrency purse into another wallet. - In print to paper
You can also choose to print your wallet (your cryptocurrency address and private key key) onto a physical paper, then secure the paper in a safety deposit box.
