Once you have registered on a Crypto Exchange in Thailand and have a verified account, you are all set to buy your first Bitcoin. At this time and especially when you start to build up your investment in Bitcoin and other cryptocurrencies you should also think about security and the safe storage of your cryptocurrencies. In terms of crypto wallets, which are essentially digital wallets, you have two choices, a hot wallet or a cold wallet.
Many of the exchanges offer online wallets where you can store your Bitcoin, known as a ‘hot wallet’. A hot wallet is any digital wallet that is connected to the internet either through your desktop computer, laptop or mobile device. They are pretty easy to set up especially on the exchange platform you use, and also offer quick accessibility to your cryptocurrency. However because your ‘private keys’ to this hot wallet are also online, they are susceptible to hackers and for this reason not all your Bitcoin and cryptocurrencies should be saved here. It is not unknown for crypto users’ online wallets to be hacked and lose all of their Bitcoin and cryptocurrencies.
Security is why it is a good idea to check out and invest in offline hardware alternatives, known as cold wallets. In comparison to a hot wallet these offline devices do cost money whereas hot wallets, online digital storage, are generally free. It is by and large fine to have some but not all your cryptocurrency in your online wallet. You can compare it to the physical wallet that you take with you when you leave your home; it’s just for your spending money while you are out and about. It’s certainly not where you would keep your entire savings. Seen otherwise, an online wallet is a bit like your current account, enough in the account for easy everyday access.
Just a point about online wallets that are provided by the Crypto Exchanges: these wallets are termed custodial wallets, which means that as the user you do not actually hold the private key to the wallet. It is not the same as storing your cryptocurrency in your own personal wallet. If for example the exchange itself were to be the victim of hacking, then your account and all the cryptocurrency it contains would most likely be lost. Exchanges do not have insurance in the event of such occurrences. The phrase ‘not your keys, not your coin’ is one to bear in mind when considering the wallet where you decide to store your Bitcoin.
If you have a substantial amount of Bitcoin or any other cryptocurrency you should ideally be looking to invest in a cold wallet. These off line storage devices can be thought of as your own crypto vault/safe. Because cold wallets are offline there is less risk of them being hacked or compromised and they therefore offer more security than hot wallets. The private key to these cold wallets is offline and allows the user to view their account without putting their security at risk.
One type of cold wallet is called a paper wallet where the private keys can be printed out on paper and stored in safety deposit boxes, or in a home safe. Only if you have this paper will you be able to access the account. Some websites allow you to generate such a paper wallet.
Then there are hardware wallets that are usually USB devices that will allow the user to store their cryptocurrency securely offline. These wallets are not affected by computer viruses since the private keys never come in contact with the computer network, allowing this system to offer a much higher level of security.
Cold wallets are the most secure way to store your Bitcoin. However there are ways in which to make doubly sure your Bitcoin is safe. Always make back ups of your Bitcoin wallet on other hardware devices, choosing secure passwords for these backups. Another consideration for security is to always update your software – the newest version of wallet software will always afford you more security. Older software may leave you open to hackers.
There are currently many cold wallets on the market, including Ledger Nano which is a favorite among users since it supports 5,500+ cryptocurrencies, is mobile and computer friendly, and offers secure storage at a low price. For your small amounts of Bitcoin and temporary storage, Coinbase is a favorite; this is a hot wallet so best for only smaller amounts of cryptocurrency.
Whichever Bitcoin wallet you decide to use always remember to back up your cold wallet on other devices and likewise update the software for security reasons. As a rule only use hot wallets for small amounts of Bitcoin and cryptocurrency for shorter periods of time.
