🌱 a beginner’s guide: where to store your crypto

Many moons ago, I was asked a seemingly-simple question: What is the best way to store non-ERC20 tokens?

As anyone who has dabbled in crypto knows, it’s not a straightforward answer, not yet anyway. Here’s my approach, which I feel applies equally well to all crypto.

Disclaimer: I cannot 100% vouch for the security of any of these wallets. Do your own research.

I recommend splitting your tokens between a hardware wallet and a custodial exchange:

Hardware wallet is more secure, but if I do something unwise or lose my seed phrase, I lose everything.
Custodial exchange (aka not my keys, not my crypto) makes for cheaper transfer fees and much easier transfer in a pinch if I need to buy or sell something. Also, there’s customer service I can call if needed. No risk of losing seed phrase.
- A note on cheaper transfer fees: I’ve noticed that some of the big exchanges will swallow or subsidize the transfer fee when you’re taking tokens off their platform. Worth it for tokens you plan on exchanging frequently.
- But you need to really trust the exchange. Not all exchanges are worth storing tokens with. We’ll get into that later.

Community-trusted hardware wallets:

Ledger
~~Trezor~~
- Kraken claims they were able to hack both the Trezor One and the Trezor Model T in 2020, but in 2021, Investopedia listed the Trezor Model T as the “most secure” option. Do your own research here and report back so I can learn too!

How to pick a custodial exchange:

Consider using an exchange legally registered in your country
- This advice is very location dependent. But if you reside in the US or another country with a robust legal system, using an exchange located in your country may give you more legal recourse options.
- If it’s a random exchange halfway around the world, communication with customer service can be harder, and taking legal action in a worst case scenario may also be harder. (*cough* WEX, Voyager, etc.)
- Frankly, most exchanges aren’t worth storing your tokens on long-term. Be very judicious here. I’ve heard of certain tokens being trapped on Gate.io for months at a time due to a delayed system upgrade and you may remember how Voyager choked in 2020. If you want a long-term custodian of your crypto and you’re in the US, your best bets are established US exchanges or a hardware wallet, imo.
- US-based exchanges I know of:
  - Coinbase (FDIC insured on USD, no other claims of insurance, but it’s based in the US and very popular, so I know I won’t be the only one suing them if something goes wrong.)
  - Gemini (FDIC insured on USD, claims to have insurance on crypto)

Things to look out for when choosing your wallet:

a hardware wallet you trust (or a paper wallet) is the most secure from remote attackers because you can be confident that your private key truly never touches a device that connects to the internet
- hardware wallets, of course, are a better long-term solution than paper wallets. Paper wallets are one-time use only.
non-ERC20 projects typically build their own wallets or promote a wallet for use with their token. This is a great first step until you have too many non-ERC20 tokens and need something else
you want to hold your own keys (“non-custodial”)
reasonable proof that your keys are 100% secure
it should generate your keys on your device, not in the cloud (ideally not connected to the internet)
security audits from an independent reputable firm is a plus
open source is a plus if there are enough users that you feel confident someone would notice any issues
- Open source is less secure if it means “the code is available to any hacker, but no one is actually checking the code for issues on a regular basis.”

Every post on this blog is a work in progress. Phrasing may be less than ideal, ideas may not yet be fully thought through. Thank you for watching me grow.

🌱 a beginner's guide: where to store your crypto