Storing your crypto safely

General information, not financial advice. Crypto is high risk. You could lose all the money you put in.

The three things to understand

• Hot wallets have a direct connection to the internet. They can be a website, or an app on your phone or computer.
• Cold storage doesn't have a direct connection to the internet. It's usually a hardware device.
• Private keys give full access to the crypto. Whoever holds the key controls the crypto.

Private keys and recovery phrases

When you set up a new wallet, you're shown 12 or 24 randomly chosen words. This recovery phrase is a human-readable version of your private key. With it, you can restore your wallet on a new device. Anyone else who sees it can take your crypto.

If your crypto is held in an account on an exchange website, the exchange holds the key, not you. Keep the amount and the time it's held there to a minimum.

If you lose a wallet

If you lose a phone, a hardware wallet fails, or a wallet app disappears, you can restore the wallet in full with the recovery phrase. You don't have to restore it to the same kind of wallet: a phone wallet can be restored to another app or to a hardware wallet, as long as it supports the same standard.

Hot wallets

There are hundreds of hot wallets. Some hold one coin, some hold many; some run only on phones. Pick one that supports the coins you hold, has reasonable fees, and comes from a well-known developer.

Hardware wallets

Hardware wallets work like hot wallets, but the keys stay on a physical device that isn't connected to the internet, and you have to press buttons on it to approve a withdrawal. The best-known makers are Ledger and Trezor.

• Ledger: the Ledger Nano X connects by USB-C or Bluetooth. The Ledger Nano S and Ledger Blue are older models; check the maker's site for the current range.
• Trezor: the Trezor One and Model T are older models; check the maker's site for the current range.

Buy hardware wallets direct from the maker, not second-hand or from a marketplace seller. If you lose the device, your crypto isn't lost: restore it from the recovery phrase onto a new device.

Paper wallets

A paper wallet is a printed or handwritten copy of an address and its private key. We don't recommend them. Keys can be captured by malware, by printers or by anyone who sees the paper; paper fades and burns; handwritten keys are easy to get wrong; and they encourage reusing one address. The Bitcoin Wiki explains the problems in detail.

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