How to Store Crypto Assets & What’s the Safest Way for Long term Holding?

Values of cryptocurrency may be highly volatile, but one thing for sure is that cryptos are here to stay. In the early days, they were only seen as an alternative to make efficient transactions across borders. However, the deteriorating impact of Covid-19 on fiat currencies and the traditional stock market further solidified the credibility of crypto assets as a reliable alternative vehicle for long term holding. 

Saving for retirement, college education, or a home are all some common goals of people who embark on long-term investing. Holding cryptocurrency can help you achieve these goals even faster than traditional stocks or inflation-plagued bank fixed deposits.

What is Long Term Holding in crypto? 

Long-term holding refers to a decision to invest in crypto assets for longer than one year with no intention to sell or divest. It has a lot of benefits. You get to have a veritable store of value that is immune to inflation and erratic government policy changes. And most importantly you get to compound your gains over a long period of time.

However, like every other kind of investment, long term crypto holding also comes with its own risks. Asides from the high volatility in prices, Crypto-holders can lose assets completely as a result of hacking, loss of private keys, theft, computer failure, and more. So what’s the safest way for holding your crypto assets while avoiding these risks? 

How to Store Crypto Assets?

There are two main ways that you can store crypto. Hot-wallets (online wallets) that you can operate on the web or through your mobile phones. And cold storage hardware wallets, which are physical devices where you can store your crypto private key. 

Experts widely agree that hardware wallets or “cold wallets” are the safest and most secure way for holding your crypto assets in the long or short term. This is because software wallets or hot wallets are susceptible to hacking and inordinate activities by the custodian company. 

Hardware wallets too are not 100% foolproof. When it comes to holding for long periods, a whole lot of things can go wrong. Some of the risks involved in using hardware wallet storage include; 

• The issuing company of the hardware wallet going out of business
• Software installed on the hardware wallet may become outdated and unsupported
• Because the hardware devices can’t be reproduced, if the device goes missing or gets destroyed, you may never be able to retrieve your assets.

Safest Way for Long term Holding Crypto: Paper Wallets

Having considered all the aforementioned factors, it is obvious that when it comes to long-term holding the best way is through Paper Wallets.

A paper wallet involves generating your access keys including your private key and printing them out or writing them down on a piece of paper. You can verify the amount on it by entering the crypto address on any blockchain explorer. If you have a QR code, it’s even easier, there are many apps that scan that and give you the balance on demand. 

Advantages of using Paper Wallet

• You don’t depend on any external company to retrieve your private key in the future. 
• Paper wallets can’t be hacked by hackers on another side of the world. For anyone to steal your assets, they would have to rob or attack you physically, which is quite unlikely. 
• You can reproduce the private keys and store them in different places.
• You can hand them to your heir or inheritance upon your death. Many crypto assets have been lost due to the holders dying without disclosing the password to anyone. 

With paper wallets, the risks are greatly mitigated. Although it has a few limitations of its own, when compared with other storage alternatives, Paper wallet storage is by far the safest way for long term holding crypto!