Sunday, December 18, 2022

Self-custody and hardware wallets

Self-custody, or the act of holding and managing one's cryptocurrency rather than entrusting it to a third party, has become increasingly popular recently as more people have become interested in owning and using digital assets. (This is especially relevant with the bankruptcies/failures of centralized exchanges, such as BlockFi, Celsius, and FTX) One way to achieve self-custody is through the use of hardware wallets, which offer a secure and convenient way to store and manage cryptocurrency. In this blog post, we'll explore the benefits of self-custody and how hardware wallets can help you achieve it.

One of the main benefits of self-custody is that it allows you to retain full control over your cryptocurrency. When you entrust your cryptocurrency to a third party, such as an exchange or online wallet, you are relying on that party to keep your assets safe and secure. However, there is always a risk that the third party may be hacked, suffer a technical failure, or otherwise be unable to fulfill its obligations to you. By holding your cryptocurrency, you can eliminate this risk and manage your assets, giving you complete control over your investment.

Hardware wallets are a secure and convenient way to achieve self-custody. These devices are specifically designed to store and manage cryptocurrency and offer several advantages over other storage methods. For example, hardware wallets are offline, meaning they are not connected to the internet and are therefore much less vulnerable to cyber attacks. They also typically have multiple layers of security, such as a password or passphrase, to protect against unauthorized access.

In addition to the security benefits, hardware wallets are also very convenient to use. They are portable, so you can take them with you wherever you go, and they are easy to set up and use, even if you are new to cryptocurrency. Many hardware wallets also have built-in screens, allowing you to easily view and manage your assets without the need for a separate device.

I like the Ledger line of hardware wallets.  They support a large number of coins across several blockchains.  In addition, the ledger wallets support storing and managing NFTs.  The Ledger Live software integrates with several services for managing your assets.

Another advantage of self-custody is that it allows you to take advantage of the full range of options available in the cryptocurrency market. When you hold your cryptocurrency, you are free to buy and sell any digital asset you choose, rather than being limited to the options offered by a particular exchange or wallet provider. This gives you more flexibility and control over your investment and allows you to take advantage of opportunities as they arise.

In conclusion, self-custody and hardware wallets offer several benefits for those interested in owning and managing cryptocurrency. By retaining full control over your assets and using a secure and convenient storage method, you can protect your investment and take advantage of the full range of options available in the cryptocurrency market. Whether you are a seasoned investor or just starting with digital assets, self-custody and hardware wallets are important considerations.

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