Michael Terpin. Does that name ring a bell?
If not, remember it. This person lost $24 million in cryptocurrency because of one mistake. Scammers hijacked his SIM card, reset his passwords, gained access to his wallets, and stole all his crypto.
Today we’re talking about crypto storage: how to do it properly, what principles exist, and which popular tips are myths.
The three main ways to store cryptocurrency
Overall, you have three options:
An exchange — a service where you can buy, sell, and store cryptocurrency.
A hot wallet — an app that stores keys on your device and lets you transfer crypto quickly.
A cold wallet — a physical device (for example, Ledger or Trezor) that stores keys offline.
Let’s go through them one by one.
Exchange: convenient, but with nuances
The main advantage of exchanges is that they create a sense of security. Thousands of employees monitor suspicious transactions, block scammers, and build security systems. Plus, an exchange earns money from fees and liquidations, so it has no incentive to scam — it’s easier and more profitable for them to keep working honestly.
But there are nuances:
An exchange can be hacked. For example, recently hackers attacked Bybit and withdrew tens of millions of dollars.
An exchange can block a transaction. For example, if you have sanctioned USDT (to avoid getting into this situation — use our exchanger, we have the чистейшие assets).
An exchange can freeze funds of users from a certain country. Today you have access, tomorrow you don’t. There have already been cases. Especially in Russia.
Conclusion: if you store on an exchange, then diversify your assets across different platforms from the TOP 10 on CoinMarketCap (we use OKX, Bybit, and MEXC).
Hot wallet: mobility vs vulnerability
It’s fast, convenient, but risky if used incorrectly.
Mistake #1: keeping the wallet on your personal phone that you carry everywhere. There are no double checks and no blocking of suspicious withdrawals like on an exchange. If your phone is stolen — your crypto is stolen. There have been cases where restaurant staff watched passwords on cameras and stole crypto.
Mistake #2: connecting the wallet to third-party websites. Sometimes people don’t even notice how they themselves sign fraudulent transactions.
Mistake #3: storing the seed phrase carelessly. This is the only way to restore access. If someone learns it — that’s it, the wallet is no longer yours.
One more nuance: in March 2024, when the market surged, Ethereum network fees reached $100. If you had stored everyone’s любимый PEPE or any other coin on the Ethereum network in Trust Wallet, you would have paid a hundred bucks just for a swap or withdrawal to an exchange. But if the coins were on an exchange, the fees would have been minimal.
Conclusion: you can store on a hot wallet, but only on a separate phone that stays in a safe and does not connect to suspicious sites and Wi-Fi networks.
Cold wallet: maximum protection, but not without drawbacks
It is considered the most reliable storage method. But there are pitfalls here too.
First, you need to buy . If you buy a compromised device, your crypto will be gone with the very first transaction.
Second, fees. The same situation as with hot wallets — if networks are congested, a transfer can cost dozens of dollars.
Third, if you speculate (rather than simply invest), a cold wallet may not be suitable. When the market moves sharply and your crypto is on a device that sits in a drawer — you may simply not have time to sell.
Conclusion: a cold wallet is a great option for large amounts, but not for trading and frequent transactions.
Main conclusion
How to store crypto is a matter of preference and goals. Now you know the pros and cons of each method. We hope this article helped you understand the mechanics and avoid mistakes.