Hello everyone!

Welcome to the ninth edition of my newsletter! Every Saturday I’ll be sending out a quick newsletter on how to master crypto. I write about mindset, trends and analysis.

Today, I focus on how to maximize crypto security.

Where can we Safeguard our coins?

In the ever-evolving world of cryptocurrency, ensuring the safety of our digital assets has become a paramount concern.

Recent incidents involving hacked hot and cold wallets have raised doubts about where we can truly protect our coins. In this article, we will explore strategies to maximize security and shed light on the strengths and weaknesses of different storage options.

The Importance of Separation

To enhance security, it is crucial to separate our cryptocurrency holdings into distinct accounts based on their usage. By categorizing our funds into three key accounts, we can strike a balance between convenience and risk mitigation.

1. Transactions Account (“Burner wallet”): This account (hot wallet) is dedicated to executing transactions such as swaps, sells, and mints. Avoid leaving substantial amounts in this account, limiting it to a few hundred dollars or an amount you can afford to lose.

2. Short-Term Storage Account: For short-term storage, which typically spans days or weeks, hot wallets can still be used. Similar to the transactions account, it is essential to keep only the necessary funds here and not expose a significant portion of your holdings to potential risks.

3. Long-Term Storage Account: To provide the highest level of security, you have to use a cold wallet for long-term storage.

Ledger has a backdoor for the FBI, and Trezor has been hacked.

It is essential to examine the facts behind the sensational headlines and understand the true implications.

Regarding Ledger, the company introduced an optional service for seed phrase recovery, involving the storage of these phrases with third parties. If you choose not to participate in this service, your security remains intact.

In the case of Trezor, a high-performance tech firm managed to crack the PIN and seed by physically tampering with the device's chip. This sophisticated attack requires the theft of the actual device, along with an extraordinary level of expertise and specialized equipment.

Although no system can claim absolute security, properly securing your cold wallet and diversifying your holdings across multiple locations significantly heightens your protection. If you have your funds already on a Ledger or Trezor, you can leave them where they are.

Enhancing Security Measures

Apart from the popular options like Ledger and Trezor, two alternatives are worth considering for enhanced security:

1. Air-gapped Wallets: For those seeking maximum isolation from the internet and other communication channels, air-gapped wallets are an intriguing choice. These wallets operate without Wi-Fi or Bluetooth connectivity, relying solely on QR codes for transactions. One notable option in this category is @ngrave_official, which provides robust security features at a price of $400.

2. Open-Source Wallets: Another avenue to explore is open-source wallets, which leverage the collective scrutiny of the developer community. These wallets, such as @BitBoxSwiss, offer transparency and allow users to verify the code's integrity. With a price tag of $140, they provide a cost-effective and secure solution.

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Greetings from my vacation! That's why today's newsletter is a bit shorter than usual.

With my best regards and wishes, I hope you have a wonderful weekend. See you next Saturday - stay safe!

Marco Johanning

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And if you have any questions, I’d happy to help. Just reach out to me on Twitter.

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