Storage and Security

Storage and Security are some of the most important things to understand in the cryptocurrency space.
Cryptocurrency transfers are one way and cannot be reversed.
This is due to the immutable nature of the blockchain.
While this sounds daunting, it is actually the key to the moneys security.
Once bitcoin for example is sent to you, no-one can say otherwise and no-one can take it from you.
So how does it work, and how can I secure my coins?
All of the transaction history is stored on the blockchain, so while you don’t actually have the bitcoin sitting in your wallet, provided you own the private key, you have the exclusive rights to the coins that have been sent to you. Your Private keys are an encrypted form of cryptography paired with your public key (sending address) that decrypt your bitcoin transactions. So in Short your Private key, is like the the pin code to log into your internet banking, and the public key is like your bsb/account number so people can send you payments.
Being Digital and used over the internet, malware and screen grabbing software become an issue when using your wallets. You need to keep your private key out of sight.
The best way to do this is to either have it stored offline, or on an encrypted 3rd party device such as a Hardware wallet that stores your private keys, and cannot be viewed directly by the computer.
And therefore your private keys cannot be compromised.
As far as storage goes, you can store your coins anywhere where you have have an address to send to.
Although the best place to store it is somewhere where you have the ownership of the private keys. eg not an exchange that is run by someone else.
To store your private keys, you want to have them backed up, preferably in multiple secure places.
You do not want to only have one copy in a place that could be subject to fire or theft. etc.
Ledger Nano S - The secure hardware wallet
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