When you buy cryptocurrency you require storage simultaneously. Like when you buy a coffee at a cafe, you need a cup at the exactly the same time. In the crypto world no one provides the cup; you bring your own. A crypto cup is a “wallet” and there are two kinds: “hot” and “cold”.
A “hot wallet” refers to an electronic wallet that exists as an app on your computer or smartphone and is owned by and / or linked to a digital currency exchange website. Since the wallet is connected to the Internet you can spend your cryptocurrency at any time, but it also exposes you to risk: Digital currency exchange websites are often hacked and shut down. We don’t recommend hot wallets for large tranches of cryptocurrency – or carrying $25,000 cash in your back pocket for the next decade.
A “cold wallet” stores cryptocurrency on an offline external hardware device (like a back up drive), that can’t be hacked. Further, when you activate a cold wallet the device generates “recovery seeds”; twenty-four random words, unique to your wallet. These seeds are like a password that can be used to recover your cryptocurrency on-line if your device is lost, stolen or compromised. Most importantly, unlike a hot wallet on an exchange, you own the cold wallet device so you’re always in control of your cryptocurrency investment.
Choosing the right device and establishing it correctly requires a significant amount of technical expertise. Experienced clients supply their own cold wallet storage; if you’re a new investor we can assign an established device to your order.
Where is my cold wallet kept?
Throughout the acquisition process Bitcoin Trader keeps your activated cold wallet device in a safety deposit box, inside a multi-layered security vault, in an undisclosed location. In fact, your cold wallet device waits inside the vault before the trade. Once you’ve completed an order form and your fiat funds have cleared, the trade is made and the supplier transfers your cryptocurrency allocation directly from their wallet to yours – inside the vault. The only thing moving is the code. It’s a bit like storing a credit card inside a vault, then transferring funds onto the account via internet banking. This process was established to ensure your cryptocurrency could not be hacked or stolen throughout acquisition, and interception of your cold wallet storage device was impossible.
Since not many people want to keep their future millions under the mattress; or their cold wallet in the cupboard – we advocate storing your cold wallet device in a safety deposit box within a secure vault. That’s why we’ve partnered with Guardian Vaults. And yes, Guardian’s vault actually looks like the picture above – we’ve been inside it!
Cryptocurrency Storage Steps
Bitcoin Trader is a personalised cryptocurrency brokerage firm catering to individual, corporate, institutional and SMSF clients. The company is incorporated in Australia, with established global partners providing access to high liquidity and multicurrency settlements. Our core focus is on safe, secure and compliant cryptocurrency investment, divestment and portfolio reallocation.
Disclaimer: This content is for informational purposes only. It does not constitute investment or financial advice. Any information, material or commentary is intended to provide general information only. Information contained in this document has been obtained from sources believed to be reliable, but BT Brokerage Services Pty Ltd trading as Bitcoin Trader, makes no representation as to its accuracy or completeness. Before acting on any information contained in this document, each person should consider its appropriateness having regard to their own or their clients’ individual objectives, financial situation and needs. You should obtain independent taxation, financial and legal advice relating to this information and consider it carefully before making any decision or recommendation.