Self control Bitcoin, Ethereumand other crypto assets are very attractive more attention unexpectedly since Sam Bankman-Fried’s FTX exchange blew up in a whirlwind of drama a few weeks ago.
Users of the former third-largest exchange have no idea if they will ever get their money back. With this in mind, many users decide not to trust centralized exchanges anymore FTX or Coinbase with their own funds.
“If you put your money in an exchange, you’re putting yourself at risk for hacks, frozen withdrawals due to business failure, and internal fraud,” said Casa CEO and co-founder Nick Neuman. Open the passwordHe cites FTX as a “clear example” of this.
With self-control, users transfer their own funds wallets that only they control.
“There are similarities between them private keys and car keys. When you give someone else the only key, they can get into your car and drive away. If you keep your key, you’re free to do whatever you want,” said Pascal Gauthier, CEO of Ledger.
If taking full control of your cryptocurrency sounds appealing to you, follow these steps to transfer your funds from an exchange to a wallet you own.
Create a wallet on a self-monitoring platform
An important caveat before getting started is that while self-monitoring can help users protect themselves from third parties stealing their money, it also requires more personal responsibility.
Users should type a seed expression, is roughly equivalent to a password that can be used to back up all addresses associated with a wallet. If seed lost expression Bitcoin or the crypto attached to it is lost forever.
If you’re willing to take on that responsibility, there are plenty of wallet options to use to store your funds.
We will look at the popular desktop wallet Electrum.
After downloading Electrum wallet appafter some initial setup you will be prompted to create a new “seed phrase.” This is the important “password” we mentioned. Write down the 12 words. This is the most important step because if you lose these words, there is no help desk you can turn to to get your money back. It is important to save. these words are safe and offline. (In other words, don’t save these words in a file on your computer or phone.)
There are many other wallets to choose from, but the action for the wallet you choose is pretty much the same: Download the wallet (on desktop or mobile) and then type in the important words that should never be lost or shared. (Important: If you do (If you ever share this keyphrase, the recipient of this keyphrase will have full access to the contents of the associated wallet.)
Other cryptocurrencies require different wallets. MetaMaskfor example, is a popular browser and mobile wallet used for self-monitoring Ethereum and other appropriate icons. Phantom is the most widely used wallet Solana and Solana-based assets. And there are many more examples.
Another option with added security is to use a hardware walletit protects against potential hacking, like Ledger or ColdCard, which store keys in an offline environment.
Transfer funds from the stock exchange
Once you have chosen your wallet provider, it is now time to withdraw your funds from the exchange and transfer them to your new wallet.—a wallet controlled by you (and only you).
First, you need to create a new address in your wallet to send Bitcoin (or other cryptocurrency). In Electrum, you click “accept” to generate a Bitcoin “address,” a chaotic string of numbers and letters that roughly resembles an email address. In MetaMask, Phantom, and other similar browser-based wallets, the address is already created, and you must click either “Account” or “Deposit” or similar to transfer that address to your computer’s clipboard.
Your exchange of choice, say Coinbase, will have some sort of “Withdraw” button on your account page for each of your assets. To send money to the wallet, you need to click the “Withdraw” button for the relevant assets (“Bitcoin” for the Bitcoin wallet, “Ethereum” for the Ethereum wallet, etc.), select the address from the wallet you created and click “Send”.
Often the exchange will ask you to make sure you copied the correct wallet address or to confirm that you really want to withdraw your funds, but the mechanics will be slightly different depending on the exchange you use.
A self-protecting rabbit hole
Now that you have sent your cryptocurrency from the exchange to your personal wallet, what next? “Do your own research” (DYOR) is a catchphrase in the Bitcoin space, as there is a lot of information to go through in order to become as knowledgeable as possible about cryptocurrency. Self-control can be considered one’s own the rabbit hole worth exploring.
There are more complex options for self-control than what we described above.
For example, “multi-sig” wallet options like Casa offer more flexibility. Instead of just one private key, the wallet is protected with several at a time. So if a user loses a key, their funds are still safe. (Though if two keys are missing, tough luck.)
Some users have their own carvings seed included expression metal plates for added peace of mind. If that’s where they are seed expression is turned on, for example, stored seed the statement should still be legible.
As Neumann points out, the user experience of self-monitoring is always improving. Casa’s user experience requires no typing or memorization, for example seed statement. “Anyone can do it. We believe we can continue to improve it to make it possible for everyone in the world to keep their keys secure,” Neuman said.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment or other advice.