My experience with cold wallets: protection vs paranoia

Have you ever felt insecure leaving your crypto on those big exchanges? I have, a lot. After losing a considerable amount in a hack ( I don't even want to remember it ), I started researching the famous cold wallets. And wow, what a world!

The cold wallet: my anti-hacker bunker

A cold wallet is basically a physical device where you store your cryptocurrencies offline. Unlike those online wallets that are always connected, these little wonders keep your private keys isolated from cybercriminals.

What no one tells you is that they don't actually store your coins (! Everything is on the blockchain! ). They simply hold the damn keys that give access to your funds.

How do these things work?

When I got my first cold wallet, I almost went crazy trying to understand how to use it:

• Your crypto ALWAYS lives on the blockchain, not in the wallet
• The wallet keeps your private keys (, never lose them EVER! )
• To make any movement, you need to connect the device and sign the transaction.
• Then you need another "hot" wallet to interact with applications... what a mess!

To be honest, at first it seemed like a hassle every time I wanted to move my funds. But after the scare I had with the hacking, I prefer this system.

The three options I tried

Ledger

I first bought a Ledger Nano X. It looks like an expensive USB memory, but it works quite well. It supports a ton of coins, has an OLED screen that I love, and you can recover everything if it breaks. However, its latest data leak left me quite worried.

Trezor

I liked the Trezor for being a pioneer. I found it more intuitive than Ledger and its setup took me only 15 minutes. The problem is that it supports fewer coins than Ledger, and that limited me.

SafePal

I tried this one because it is backed by significant venture capital. Its interface seemed the simplest to me, and I loved that it uses QR codes to communicate with the app without connecting to the internet. Its self-destruction system if someone tries to tamper with it seems brutal to me, although somewhat paranoid.

Do you really need a cold wallet?

After using these three, my opinion is clear: if you have more than €1,000 in crypto, buy one NOW. Exchanges can be hacked (I experienced it), they can freeze your funds or simply go bankrupt taking everything.

Cold wallets use a PIN and reset if you enter the code incorrectly several times. That gives me peace of mind, although I admit that sometimes I miss the ease of online wallets for quick trading.

The hassle of transferring coins

Transferring funds is easy but tedious:

1. Copy the address of your cold wallet
2. You send from the current exchange or wallet
3. You sometimes wait ( with your heart in your throat )

Pros and cons from my experience

The good:

• I sleep peacefully knowing that my keys are offline
• No one can touch MY coins, they are 100% mine
• I can take my crypto anywhere

The bad:

• The hassle of connecting the device every time
• It cost me more than 100€ ( but less than what I lost in the hack )
• To use DApps I have to make additional transfers
• If I lose or break the device and don't have the seed phrase... goodbye to everything!

Doubts I had ( and resolved )

Can they be hacked? Yes, but it's much more difficult. The biggest risk is myself falling for phishing scams.

How much do they cost? Between 50-250€. I wouldn't skimp on something that protects thousands.

Which is better? It depends on your needs. Ledger for variety of coins, Trezor for ease of use, SafePal for extreme security.

The truth is, since I got my cold wallet, my level of anxiety has decreased significantly. Although I still have nightmares about losing my recovery phrase...

Have you already decided on a cold wallet or do you still trust exchanges?