By Brian Stickevers Cloud | Blockchain | VMware | Infrastructure Architect | Platform Architect
Common Belief: “Use crypto exchanges for just buy and sell. Also, don’t store them there. Store your crypto on wallets that gives you private keys.”
Here are my thoughts on this statement…
There are many investors out there who have a lack of understanding of finance, economics, or investments, let alone new asset classes. Some feel intimated or uninterested in learning how it all works. In traditional assets, they leave it to a broker who works kind of like the Wizard of Oz, who makes money regardless if you do. These investors tend to have a conservative risk profile but seek immediate rewards and gratifications. They are usually the last to arrive and the last to leave and often miss cycles or emerging trends before they are forecasted. A challenge in itself for one who truly wants to be your own bank; one must understand the product and the risks associated with it.
The second challenge in becoming your own bank is that the industry has not made it easy to buy, store, or sell securely. The new banking requires an end-user to store keypairs in a digital wallet. The wallet is without complexities. Some wallet solutions require extensions to browsers, some require a download of software, and some require you to connect a USB like a device. In many ways, the end-user needs to be as knowledgable as your company Help Desk Administrator. First, you need to keep private keys secured and recoverable if your software or hardware wallet fails. You run the risk of phishing, virus, and malware exploits if using a computer browser as a software wallet or trading in general. The risk of software vulnerabilities as all software comes with bugs and requires continuous patching and upgrading. The risk of hardware failure without a proper backups strategy leading to lost keypairs and seeds. Finally, the chance of sending or receiving the appropriate public key.
Now there is always a risk, but there is also a risk of storing on Exchanges. For US Citizens, the risk is using offshore non-US regulated Exchanges. Does the Exchange comply with know your customer? Can you trust how they store your keypairs? Are they insured and or are you protected from financial loss due to exploits or hacks?
For a new investor to cryptocurrency, or users who feel uncomfortable securing private keys, I would recommend using and storing on regulated insured Exchanges. An exchange like Coinbase, where 98% of all customer funds are stored offline making digital assets inaccessible to hackers. The remaining 2% online is also protected in the event of hack insured with Lloyd’s of London. All bank USD deposits are also FDIC insured. It is a great way to start.
Now to answer your question, to be your own bank, takes a lot of work, as the risks associate with storing your own precious metals but in a digital space.
First Check if you have an email address account that has been compromised in a data breach ‘;–have i been pwned?
1. Use PGP encrypted privacy email providers that cannot decrypt and read your emails like Protonmail Free email.
2. Use a separate email address and provider for personal, banking, and social media.
3. Ideally have a mobile or computer just for the purpose of Banking- Crypto Trading.
4. Use Brave or Opera ( has Free VPN) Browser for Speed and Privacy Features
5. Use VPN while banking, trading, or browsing the internet (https://www.pcmag.com/picks/the-best-vpn-services)
6. Securing your accounts. Make sure your Exchange or Bank provides advanced security features.
- Strongest – U2F Technologies like Yubikey USB (mobile options as well). Buy two for redundancy.
- Best – 2FA application like Google Auth, Duo, or Authy
- Weakest – SMS 2FA. At-Risk SIM Swapping
7. Use a password generator for with Strong Password or Phrase Policy. https://generatepasswords.org
8. Use Good password rotation policy, like every 60-90 days.
9. Use Regulated Insured Exchanges like Coinbase or Gemini if you choose not to take ownership of Private Keys. 98% of Coinbase customer funds are stored in offline wallets.
10. The keys to the kingdom are your seed phrase when first set up your wallet. It can be a 12, 24 random generate phrase of words or numbers that you should write down. Keep this safe and secure as if I have your seed phrase I have your Keys (Bitcoin, Ethereum, XRP, Etc).
11. Use a reputable Hardware Wallet Manufacturer, Ledger, Trezor. Always buy from the manufacturer, and always buy 2. You can mix and match.
12. Backup and Secure your seed phrase with Stainless Steel Wallet. Use BillFodl and CryptoSteel.
Buy Bitcoin on Coinbase
https://www.coinbase.com/join/sticke_t. “Coinbase is the world’s most trusted place to buy and sell cryptocurrency. Open an account today, and if you buy or sell $100 or more of crypto, you’ll receive $10 worth of free Bitcoin!”