Even if we are a couple of months since the big FTX meltdown that rocked the finance world, the crypto industry is still feeling the effects. However, this has also made the everlasting debate of cold vs hot storage become even more pressing.
Even if you might be someone who actively buys and sells crypto as the price of Bitcoin and other currencies fluctuate, it is very hard to argue with the fact that cold storage brings with it several benefits to you as an investor.
Cold storage is the best alternative for those in crypto for the long run
If you have invested money in crypto that you intended to keep in your chosen coins over a prolonged time, it is very difficult to argue with the fact that cold storage is the safest alternative. Even if the FTX scandal washed away many of the problematic individuals involved in crypto, it is still always best to be in full control of your own coins. Unfortunately, breaches and hacker attacks happen at exchanges, and the last thing one wants is to be in a situation where your coins are gone due to this.
The biggest drawbacks of cold storage
The biggest drawback with choosing to run with cold storage is without a doubt the fact that this can make it a longer process when you are looking to sell your crypto for actual money. This can make it difficult to offload your coins in a very short period of time – but you should be able to get everything onto the market within the span of a couple of hours without issue. However, this can make it hard to offload your crypto fast in the case of a sudden change in price in either direction.
If you are considering cold storage
If you are someone considering cold storage, it is extremely important that you do your research to ensure that you have understood all aspects of what this would mean for your investments overall. Cold storage is by far the safest alternative when looking at it from all possible angles, but it also requires that you understand what you are doing.
Taking a couple of hours to research the best way of going about everything – from transporting your coins to cold storage to the best way of then saving your passwords – is absolutely paramount to having a successful transfer of funds and a cold storage period. If you’re someone who is looking to move their coins into cold storage but has never done this before it’s incredibly important that you first and foremost do your research on how to go about this. Before you move over your entire holdings, it’s also a good idea to move over the smallest amount possible. Sure, this is going to cost in gas fees but it’s also going to confirm that everything is working as intended.
Cold storage may be safer, but it’s not for everyone. Those looking to actively trade crypto markets and make a lot of transactions quickly are not going to benefit from using cold storage and are better off turning to one of the bigger exchanges for their storage needs. For the long-term investor, however, cold storage is a no-brainer and should be arranged as soon as possible.
The future of cold storage is bright
With the collapse of FTX and more and more people realising that cold storage is the way forward, we can expect to see more and more people make the switch. And already there are companies that are focusing on providing good and safe alternatives for cold storage that are completely analog and safe from crashes and malware.
