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I moved my crypto from Coinbase Wallet to a hardware wallet for added security.
Coinbase warned this week that users’ cryptocurrencies can be a guarantee in the event of bankruptcy.
Hardware wallets load a layer of physical coverage and are favored by experienced crypto users.
A few weeks ago, I bought a cryptocurrency for the first time, so maybe I’ll just buy a pig.
My Rave Pigs NFT is still in my possession, as is $63 of ether, the largest cryptocurrency of the moment through the market capitalization and local currency of the Ethereum blockchain. These holdings were in my Coinbase wallet, a software self-preservation wallet.
Due to new regulations recently established through the Securities and Exchange Commission, Coinbase revealed this week in its first-quarter earnings report that, in the unlikely event of a bankruptcy, the company could simply absorb the cryptocurrencies that users have on its exchange. In fact, Coinbase users would no longer have their holdings and the company would take care of the exchange’s balances.
Admittedly, this would potentially be only for the Coinbase exchange and not for Coinbase Wallet users as they work separately. And while Coinbase CEO Brian Armstrong trusted users that their budget was secure and there was no threat of bankruptcy, it made me think of the most productive way. Are exchanges, virtual wallets or physical wallets safer?
I bought a hardware wallet for $59 and checked it out for myself. Here’s what I found.
I went to a local Best Buy and bought the Ledger Nano S, as Ledger is one of the most popular corporations offering garage hardware devices. The worker who addressed me to them asked me if I was secretly a crypto millionaire. (I’m not. )
The first thing I should point out is the Apple-ification of the product, from the packaging to the narrow design. If you squint enough, it looks like iPod Shuffle.
The commands prompted me to connect the device to my computer and download the Ledger Live app. The device gave the impression on my Mac Finder, and no, it can’t drag random files like it would with a USB flash drive.
I was a little worried about the software in the installation process. Isn’t it the biggest merit of the physical wallet that has no pirateable software capabilities?But the app assured me that Ledger never exposes my personal key or password to access my crypto – online, even when I use Ledger Live.
The first step was to get to know my great book. There is a small screen on it, and you use the side buttons to scroll down and click “OK”. I set up a PIN and showed it, it’s not my personal key, but a password just to enter my Nano.
I temporarily wrote down my PIN in a safe place. You only have 3 attempts to guess your PIN, otherwise you lose access to your assets forever.
Then came here my 24-word retrieval word that created my new personal key.
“This is your backup to repair your accounts if necessary,” the device warned me. “In case of loss, theft or forgetfulness, all your belongings will be irretrievably lost. “
Then it’s time to attach my crypto. There’s an option to use an existing software wallet with a Ledger hardware wallet, so I did it first: I just connected my coinbase wallet holdings to Ledger via a Chrome extension on my computer.
Now, nothing can affect my stock unless my Ledger is connected to my computer, and I can view them in real time in the Ledger Live app.
However, part of my purpose is to see if I can free myself and my possessions from the Coinbase ecosystem, although keeping cryptocurrencies on Coinbase Wallet is different from keeping them on the exchange.
I transferred my stock to Ledger and tried to remove Coinbase Wallet, but it’s just been this: you want to have 0 budget in your account before you can delete it, and it charges cash to remove any remaining “dust”.
I will save this task, as well as move my NFT to OpenSea, for the day.
Like everything about the decentralized technologies I tested, this procedure was frustrating and the conclusion was a bit disappointing.
But I think the sentiment would be very different for a cryptocurrency user with giant holdings who can now sleep more peacefully knowing there’s more between their cash and the bad actors looking to borrow it.
It’s not that software wallets aren’t more secure than storing your crypto on an exchange like Gemini or Coinbase (they are), it’s that users need the most secure option imaginable in an area that still faces security issues.
“The hardware wallet is like putting anything in Fort Knox,” Douglas Borthwick, lead advertising officer at crypto company INX, told me this week.
As small as my assets are, it’s good to know that I now have that point of protection.
Read the article on Business Insider