Kraken, a digital asset company, explains how to securely store Bitcoin, Ethereum, and other cryptocurrencies
Digital asset company octopus A report was recently released explaining how to store your cryptocurrency holdings safely and securely.
Kraken notes in his report that if you recently bought some crypto assets after hearing about the many horror stories of investors or traders who lost fortunes “by making mistakes, you may feel uncomfortable.” as silly as losing the password to your crypto wallet. ”
Kraken also mentioned that it is possible that new crypto investors cannot find reliable resources that clearly explain how to keep their coins safe.
According to Kraken, the crypto space has changed significantly in the past few years, and you don’t have to “walk down the same rabbit hole” others had when they tried to store their digital assets before.
Kraken Intelligence and Kraken Security Labs They have teamed up to give you “simple, honest advice on how to store your crypto”.
As mentioned in the report, what might work for you may not work for another person. Because of this, it is important for users to carefully weigh the pros and cons of their buying, storing, and transactions with their cryptocurrency.
Because crypto assets are more “decentralized” than traditional assets, owners must “take precautions to protect themselves from the risk of loss or theft,” the Kraken team explained.
They reminded users that once their crypto is lost, it is “gone forever”.
Some examples of how crypto has been lost or stolen:
- Human error (e.g. “You are sending your money to the wrong wallet, you forgot your password”)
- Natural disaster (e.g. your house “burns down with your crypto wallets stored in it”)
- Hardware malfunction / loss (e.g. your “computer hard drive with your private keys is damaged”)
- Remote theft (e.g. “fall victim to a fraud, an exchange hack, or a personal hack”)
- Physical robbery (e.g. “Your rucksack or wallet is stolen with your private keys”)
- Government confiscation (e.g. law enforcement agencies require “an exchange to freeze your account”)
As explained in Kraken’s report, digital assets are kept in wallets, which are “computer programs that can be used to send or receive crypto”. The Kraken report also states, “Depending on whether the wallet is connected to the Internet, crypto wallets fall into two categories:” hot “(online) or” cold “(offline).”
Kraken’s report also found that most cryptocurrency networks use the public key as an “account number” while the private key is the “password”. ”
While there may be certain exceptions, most digital currencies like Ethereum (ETH) work “pretty similarly,” the report said.
Kraken’s report recommends the following:
“Long-term owners looking to store generational wealth should keep their crypto assets in custody using more complex strategies, including running a full node to verify transactions, storing funds with a trusted custodian, and using multi-signature (multisig) technology Distribution of private keys to trustworthy third parties and / or distribution of funds, among other things, among several hardware wallets. “
The report adds that market participants falling under this level “should consult a professional for an appropriate strategy related to their financial situation”.
As suggested by Kraken, a possible solution in this “area” is likely to require several different keys to unlock funds (i.e. multisig) in a wallet and could look like this:
- Your own Rube Goldberg-like system “with separate devices on different continents, specially written applications and laser-etched backup plates buried under your house.”
- A professional company that “stores your crypto (called a custodian)”.
- The middle way – “a company that helps you to keep your assets in safe custody (e.g. casa custody and Unchained capital). ”
You can view the full report here.
Kraken offers access to 57 different virtual currencies in over 280 markets with sophisticated trading features, robust security and on-demand customer service.
With the acquisition of Crypto facilitiesKraken now offers “seamless” access to regulated derivatives in 5 digital currencies with up to 50x leverage.