How to Store
Why you need to safely store your crypto in Wallets
Wallets are essential because they give you control over your private keys, which are essentially the passwords that allow you to access and manage your cryptocurrency. Private keys are a critical part of blockchain security: if someone gains access to your private key, they can control your funds. By storing your crypto in a personal wallet (whether hardware, software, or a paper wallet), you ensure that only you have access to your assets, as you alone hold the key.
If you store crypto on an exchange, the exchange controls the private keys, meaning you don’t technically own the crypto — the exchange does. This introduces a risk, as exchanges can be vulnerable to hacking or security breaches, and in the event of a hack or internal issue, your funds may be stolen or inaccessible. Furthermore, exchanges are typically not insured or guaranteed, unlike traditional bank accounts, so if your funds are lost, there is no recourse to recover them.
In contrast, if you store your crypto in a personal wallet, **you** are the only one who can initiate transactions, and only you have access to the private key needed to transfer or manage your assets. However, this also means you bear full responsibility for protecting and backing up your keys. If you lose access to your private key (for example, by forgetting a password or losing a hardware wallet without backup), there is no one to recover your funds — the transaction is irreversible and no central authority can help.
Type of Wallets
There are several types of cryptocurrency wallets:
1. **Hot Wallets** (connected to the internet):
- **Software Wallets** (e.g., Exodus, Mycelium): Easy to use, but vulnerable to hacking.
- **Web Wallets** (e.g., Coinbase Wallet): Accessible from any device, but not controlled by you.
- **Mobile Wallets** (e.g., Trust Wallet, MetaMask): Convenient, but vulnerable if your phone is lost or compromised.
2. **Cold Wallets** (offline storage, more secure):
- **Hardware Wallets** (e.g., Ledger, Trezor): High security, ideal for long-term storage.
- **Paper Wallets**: Completely offline and secure if stored properly, but inconvenient for frequent use.
- **Air-gapped Wallets**: Extremely secure, requiring an offline device to generate transactions.
Understanding Hot/Online Wallets
Hot wallets (also known as online wallets) are cryptocurrency wallets that are connected to the internet. They are designed for quick and easy access to your crypto, making them ideal for everyday transactions. However, their constant internet connection exposes them to higher risks of hacking and security breaches.
When to Use Hot Wallets:
- For active trading or small amounts of crypto that you plan to use frequently.
- When you need quick access to your funds and are willing to accept the higher risks for convenience.
- Ideal for short-term holdings, not long-term storage.
Precautions:
- Use strong passwords, enable two-factor authentication (2FA), and regularly back up your wallet.
- Consider using reputable wallet apps and services with a proven security track record such as METAMASK
Understanding Cold/Hardware Wallets
Cold wallets involves a physical device that connects to your computer or mobile device via USB or Bluetooth. These wallets often come with user-friendly interfaces that guide you through the process of sending and receiving cryptocurrencies while keeping your private keys secure. Additionally, many hardware wallets incorporate advanced security features, such as secure elements that encrypt your keys and require a PIN or password for access, further enhancing protection against theft.
One of the main advantages of cold wallets is that they allow you to maintain full control over your private keys. This autonomy means you don’t have to rely on third parties, such as exchanges or online wallet services, which can experience security breaches or operational outages. When you hold your private keys, you ensure that you have uninterrupted access to your funds, minimizing the risk of losing your assets due to someone else’s security failures.
When to Use Cold Wallets:
- For long-term storage of crypto you don’t need to access often.
- If you hold large amounts of cryptocurrency that you want to keep safe from online threats.
- When you want to ensure that your private keys are fully controlled by you, not a third-party provider.
Best Practices:
- Backup: Always write down your recovery phrase (typically 12 or 24 words) in a secure location. This is the only way to recover your funds if your hardware wallet is lost or damaged.
- Physical Security: Store your hardware wallet in a safe place (e.g., a secure drawer, safe deposit box) to protect it from theft, fire, or physical damage.
- Avoid Sharing Keys: Never share your private keys or recovery phrases with anyone. They are the keys to your crypto, and if someone else has them, they can steal your funds.
What is a wallet recovery/seed phrase
A wallet recovery or seed phrase is a series of words generated when you create a cryptocurrency wallet. This phrase, typically consisting of 12 to 24 words, serves as a backup and allows you to recover access to your wallet and funds if you lose your device or forget your password.
The seed phrase is crucial because it enables you to restore your wallet on a new device or application. It’s essential to keep this phrase secure and private; if someone else gains access to it, they can control your wallet and potentially steal your assets. Therefore, storing your recovery phrase in a safe, offline location is vital for protecting your cryptocurrency holdings
How to safely store your crypto in cold wallet
Start by selecting a reputable hardware wallet, such as Ledger, Trezor, or NGRAVE. It's crucial to purchase the wallet directly from the manufacturer or authorized retailers to avoid any risk of tampering. Once you have your wallet, follow the manufacturer’s setup instructions, which will guide you through creating a recovery phrase (seed phrase). This phrase is vital for recovering your wallet if you lose access, so write it down and store it in a secure location, such as a fireproof safety box/safe.
After setting up your cold wallet, transfer your cryptocurrency from exchanges or hot wallets. To do this, generate a receiving address from your cold wallet and send your funds to that address. Always verify that you are using the same blockchain network for sending and receiving your cryptocurrency. Once the transfer is complete, disconnect the hardware wallet and keep it stored safely to protect it from theft or physical damage.
How to safely store your cold wallet and recovery phrase
By keeping the cold wallet and your recovery phrase separate, you significantly reduce the risk of losing both at the same time. This approach ensures that even if one location is compromised—whether due to theft, loss, or damage—you still have access to your cryptocurrency through the other secure location.
First, place your recovery phrase inside a fire and water resistance bag and put that bag inside a strong safety box secured with a password to protect from unauthorized access, physical damage and environmental hazards. Since cold wallet is secured with a PIN you may or may not choose to keep it inside a safety box but keep it in a separate small fireproof and waterproof bag to protect it from physical damage and environmental hazards. Now store these two bags in two different secure locations for maximum safety and security.
Cold Wallets
LEDGER
KEEPKEY
LEDGER
Pros:
- Extensive coin support (5,500+).
- Strong security features.
- User-friendly Ledger Live app.
Cons:
- Higher price for premium models.
- Some features may be complex for beginners.
Suitable For: Advanced users and traders looking for a versatile wallet with broad coin support.
TREZOR
KEEPKEY
LEDGER
Pros:
- User-friendly interface.
- Strong security with open-source software.
- Good customer support.
Cons:
- Limited coin support
- Higher price for the Trezor Model T.
Suitable For: Users who prioritize usability and security, including beginners and experienced investors
KEEPKEY
KEEPKEY
KEEPKEY
Pros:
- Simple design and easy to use.
- Affordable price.
- Integrated with ShapeShift for easy trading.
Cons:
- Limited coin support (40+).
- Less secure than competitors.
Suitable For: Casual users and beginners looking for a budget-friendly option and interested in using dapps and farming
NGRAVE
ELLIPAL
KEEPKEY
Pros:
- High-security features with an air-gapped design.
- Unique QR code backup system.
Cons:
- Expensive.
- Limited coin support (10+).
Suitable For: Security-focused users willing to invest in a high-end product
ELLIPAL
ELLIPAL
ELLIPAL
Pros:
- Completely air-gapped for maximum security.
- Touchscreen interface.
- Supports multiple cryptocurrencies.
Cons:
- Limited coin support (10+).
- Higher price point.
Suitable For: Security-conscious users who prioritize isolation from online threats.
TANGEM
ELLIPAL
ELLIPAL
Pros:
- Extremely portable (card format).
- NFC technology for easy transactions.
- Affordable.
Cons:
- Limited features
- Fewer cryptocurrencies (70+)
- Suitable For: those who make frequent small transactions.
Safekeeping Cold Wallet
Use Fire & Water Resistant Bag for cold wallet and phrase
Use Password Protected Steel Safety Box for recovery phrase
Use Password Protected Steel Safety Box for recovery phrase
Use two Fire and Water Resistant Bag . One for recovery phrase and another for cold wallet. This is required to protect your recovery phrase and cold wallet in case of any unfortunate incident.
Use Password Protected Steel Safety Box for recovery phrase
Use Password Protected Steel Safety Box for recovery phrase
Use Password Protected Steel Safety Box for recovery phrase
Keep the recovery phrase bag inside the Password Protected Steel Safety Box to protect it from unauthorized access. Box is not required for the cold wallet as it is protected by a pin. Store phrase and wallet seperately.
About Us
SEGA TRADING LLC
The UAE is leading the way in digital asset innovation, adoption and regulation. At Sega, we recognize this rising interest in digital assets and the critical importance of self-custody. We offer high-quality products, including safety boxes and fire- and water-resistant bags, specifically designed for the secure storage of valuables like cold wallets and recovery phrases for digital asset self-custody.
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