Storage according to investor type

 

It is distinguished between three investor types and thus three custody options:

  •     Pocket Satoshi: Beginner with an assett up to 10,000 euros equivalent with a hot wallet.
  •     Hodl Hobbyist: Has a crypto volume of up to 200,000 euros. A cold wallet with an additional copy of the access data deposited elsewhere is recommended.
  •     Lifetime Stacker: This group has more than 200,000 euros in cryptocurrency. The backup should be done by a professional company.

The beauty of cryptocurrencies is that, unlike securities, the holder of coins can keep them himself and decide for himself how they should be kept.

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How does a wallet work?

A wallet is similar to an online bank account. To access it, the owner needs a username and password. However, the design is slightly different from traditional banking.

First, when a wallet is opened, a so-called "seed phrase" is generated. This consists of twelve to 24 words and can also be used for recovery. The owner of the wallet should guard the seed phrase like the apple of his eye. Anyone who has the seed phrase can empty the account. Here is an example of a Seed Phrase:

Apple Tree Unique Ways Dark Big Noodles Valley Empty Happy Feeling Always.

Using this seed phrase, the wallet generates a public key and a private key. Such a key may look like the following:

afeffWEfsgf56swgeTWETZdg987556asfWg

For each private key there is a public key. Only both keys together enable a transaction in https://exness-ch.club/guan-yu-exness-trader-app/. Last but not least, the wallet generates an address that is partly made up of the public key, but is still supplemented. It is also a letter-number combination. Anyone who knows this address can make payments in coins to it or call up the address to make a payment from there.

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What should you look for when buying a cold wallet?

We recommend never buying a used wallet. New cold wallets can be bought for around 50 to 70 euros. When buying a used USB drive, there is always the risk that malware has been installed. If, for example, the smartphone is used as a wallet and an app is needed, the investor must always make sure that he downloads only the original app of the provider.

It goes without saying that the investor should make at least one hard copy of the seed phrase and keep it in a safe place.

Above all, it makes sense that the investor includes at least one person in his wallets. Otherwise, the assets would rest forever in a wallet to which no one has access.

Risk note: Trading in cryptocurrencies such as Bitcoin involves considerable risks and can lead to the complete loss of your invested capital. You should not stake any funds that you could not bear the loss of in the worst case. Make sure you understand all the risks associated with cryptocurrency trading. The content of this website should NOT be misconstrued as investment advice! We recommend seeking independent advice where necessary.

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