January 2019 David Chu
The appeal of cryptocurrencies has seen many newcomers intrigued by the idea of getting involved. Yet, security issues are a common worry that stops a lot of people from taking part in this new way of using money.
In fact, in a survey carried out by Encrybit and published on medium.com, 40% of cryptocurrency traders said that security was their biggest concern. Choosing the right wallet is an important step in lowering the risk, and it is worth considering whether a USB wallet it the right option for you.
This is hardware wallet that is a type of cold storage method. What that means is that you store the details of your coins and transactions offline. It is then simply a case of plugging the USB into a computer whenever you want to use your wallet. Some can even be used without a computer, thanks to a small built-in screen.
Some of the most popular USB wallets include Trezor, Ledger Nano S and KeepKey. It is also possible to use a standard flash drive by following a few simple steps. The end result is that your details are all safely stored on a device that you can take anywhere with you.
There is some benefit to this approach, with many advantages having to do with the increased security that it provides you with. In fact, with many USB devices of different types, increased security is one of the main benefits that you will receive.
To get some idea of the threat, we can see that Blockchain security company CipherTrace confirmed that $731 million of cryptocurrencies was stolen from exchanges in the first half of 2018 alone, as reported by Yahoo.com.
By keeping the details of your coins offline, you greatly reduce the risk of a hacker getting hold of your coins. Another big benefit is that you can take your coins anywhere with you. This means that you can send or receive money at any time wherever you go.
How do these advantages compare to other types of wallets and exchanges where you can store your coins? It is a good idea to find out all of the different types of storage method and draw some comparisons. There are websites that make this easier. For example, at bestbitcoinexchange.io, you can read reviews on the likes of eToro, Coinbase and Yobit.
Perhaps the biggest possible disadvantage you can think of is that of losing the USB or it getting damaged or stolen. There are a couple of ways of mitigating this, thankfully. One is to see up a seed phrase to recover your information if it is lost. Although, this raises the fear of losing the seed phrase as well.
It is worth remembering that Newsweek reported in 2017 that close to 3 million Bitcoins had been lost due to a variety of reasons, per CNBC.com. It isn’t clear how many cases involved USB wallets, but the fear of losing access is present to some degree with every type of crypto wallet.
Another good idea is to not carry the USB drive about everywhere with you, as tempting as this might be. It makes more sense to store it in a safe place and only take it out when needed. While this isn’t really a disadvantage as such, it does negate the previous benefit around portability. Perhaps using a rugged USB drive is the perfect solution for some people.
This is also a slightly more expensive approach than using a free, online wallet. If you have a lot of coins this is worthwhile due to the added security. Someone with a limited amount of cryptocurrency may wonder whether it is worth the cost and effort, though.
Taking everything into account, a USB crypto wallet is a solid choice for many types of users. It certainly reduces your risk of having your digital coins stolen by hackers.
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