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Keep Your Crypto Safe

Keep Your Crypto Safe

Chris Campbell

Posted December 31, 2024

Chris Campbell

Last night, I was at a holiday party.

You know the kind—open bar, a DJ playing "Uptown Funk" on repeat, that one guy who’s been flailing on the dance floor for three hours straight, and a table of strangers who get chatty after two glasses of champagne.

Naturally, someone brought up crypto.

The guy sitting next to me leaned over and asked, “Hey, I just bought some crypto. Should I leave it on the exchange?”

The age-old question: How do you keep your crypto safe?

This is the kind of dilemma that has people spiraling down Reddit rabbit holes at 2 AM.

BUT…

Before I could even explain the basics, his face twisted in panic when I started talking about self-custody.

It was like I told him to keep his savings in a shoebox buried in his backyard.

With all the talk about “being your own bank”, there’s one thing the crypto industry didn’t expect: Most people are terrified of being their own bank.

I don’t blame them.

Storing crypto securely can feel overwhelming.

Do you write down a seed phrase? Carve it into metal? Tattoo it on your thigh?

Let’s break it down.

Not Your Keys, Not Your Coins

Here’s the big idea: “Not your keys, not your coins.”

Translation? If you don’t control your private keys, you don’t really own your crypto.

Private keys are the magic wand that lets you access and move your funds on the blockchain.

Lose them, and your crypto is gone forever. Share them, and someone else might walk away with your life savings.

It’s like a vault password.

The crypto itself isn’t stored on your device; it lives on the blockchain. The key is what unlocks access.

And here’s the kicker: no third party is going to save you if you mess this up.

Forget the key, and you’re like that guy digging through a landfill for a lost Bitcoin hard drive. (Yes, that really happened.)

So, you’ve got two choices: self-custody or custodial storage.

An Infestation of Trade-Offs

Self-custody means you’re in total control. You own the keys. You decide how to store them—whether it’s a piece of paper in a fireproof safe or etched into titanium.

But with great power comes great responsibility. There’s no customer support hotline for “I lost my keys.” If they’re stolen or destroyed, that’s on you.

On the flip side, custodial storage is like keeping your money in a bank.

Coinbase, for example, holds your keys for you.

It’s convenient, but there are trade-offs. Custodians can get hacked, go bankrupt, or freeze your account if the government comes knocking.

Remember Mt. Gox? It was the biggest crypto exchange in 2014 until hackers wiped it out. Poof—hundreds of millions of dollars gone.

So, how do you decide? It depends.

If you’re new to crypto or not super tech-savvy, start with a trusted exchange.

Use strong passwords, enable two-factor authentication (2FA), use a Yubikey, and don’t fall for phishing scams like fake Elon Musk giveaways.

As you get more comfortable, consider moving to self-custody for long-term holdings.

One thing I can’t stress enough: the importance of backups.

Back Up Your Back Up’s Back Up

Your private key—or seed phrase—should NOT live on your phone or laptop.

Write it down. Store it in multiple places. Treat it like the crown jewels, because it kind of is.

And let’s not forget disaster planning.

What happens if your house floods? What happens if it catches fire? What happens to your crypto if you, well, die?

Make sure your loved ones know how to access your keys without turning Thanksgiving dinner into a reenactment of Knives Out.

At the end of the day, crypto security boils down to trust and planning.

Trust in yourself to handle self-custody or trust an exchange to keep your funds safe.

Either way, take the time to understand the risks.

There’s no such thing as “too secure” when it comes to your crypto.

Just don’t be that person in the landfill.

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