When you store your cryptocurrency on an exchange e.g., Coinbase, Binance, Gemini, is it really yours? Keeping your crypto in a wallet where you don’t have private keys introduces some serious implications. For me, the security risks were obvious with so many crypto exchanges being publicly hacked, but the loss of control is another implication that is less discussed. There’s a phrase in the cryptocurrency community, “Not your keys, not your crypto.” Handing over your funds to a third party goes against the philosophy of cryptocurrency, which was created in response to a flawed and centralized financial system.
Since cryptocurrency is digital, what you really own is a private key that gives you access to your funds. Keeping that key safe, secure, and in my control is the highest priority when it comes to how I manage my own portfolio. As someone who used to use Electrum Wallet for years, I was looking for an alternative that didn’t rely on a computer. When I found the Ledger Nano X, I knew it was the right solution for me.
Hardware wallets, like the ones that Ledger makes, keep your private keys safe and secure by storing them on the device itself, isolated from the internet. Since the blockchain is virtual, you only need your hardware wallet to access your coins anywhere. Your wallet is encrypted and protected by a PIN or passcode, so your coins are still secure even if you lose them. Your assets are backed up by a seed phrase, or recovery phrase, so even if you lose your wallet, you can use that phrase to restore your keys to a new one.
Because they are offline, hardware wallets are considered one of the safest methods of storing your private keys. Even so, a hardware wallet is not a replacement for the usual crypto best practices. If you are careless with your keys or seed phrase, it doesn’t matter what kind of wallet you use. So, remember, when it comes to crypto, DYOR (Do Your Own Research) and keep your keys safe!