The rise of digital currencies has opened up new opportunities and challenges for investors. While the potential returns on investment (ROI) from cryptocurrencies are high, the risk of loss is also significant. Hence, crypto investors need to protect their assets from theft, fraud, and hacking.
One of the popular ways to safeguard crypto assets is using a hardware wallet. These wallets are physical devices that store private keys and enable crypto transactions while offline. They are considered the most secure way to hold cryptocurrencies as they are not connected to the internet and are immune to malware and hacking.
However, hardware wallets were gradually losing popularity in recent years as software wallets and exchanges offered more convenience and support for a wider range of cryptocurrencies. Also, the debut of new generation DeFi platforms took center stage and challenged the necessity of hardware wallets.
FTX exchange is one such platform that offered its users an inbuilt wallet, allowing them to store and manage their cryptocurrencies without having to own a hardware wallet. The platform offered users easy access to DeFi protocols, providing them with the ability to engage in yield farming, staking, and liquidity provision.
However, the recent surge in cyberattacks, resulting in losses of hundreds of millions of dollars, has led to a shift of users from software wallets to hardware wallets. With the growing number of DeFi protocols, the need for stronger security measures has never been more critical.
FTX users are now returning to hardware wallets, both for security and to participate more effectively in new DeFi protocols. With a hardware wallet, users have complete control over their crypto assets, allowing them to manage risks such as loss of access, wrong or accidental transfers, and cyberattacks.
Hardware wallets provide additional security features such as offline storage, two-factor authentication, and pin protection. These additional layers of security minimize the likelihood of unauthorized access and cyberattacks. As a result, investors can confidently invest in DeFi protocols without worrying about their crypto assets being compromised.
Moreover, hardware wallets offer broader support for cryptocurrencies, which is essential in today’s digital asset environment, where new assets are being introduced frequently. Hardware wallets are compatible with multiple digital currencies and tokens, enabling investors to manage their various assets in one place.
Hardware wallets are also constantly updated to keep up with technological advancements and cyber threats, providing investors with the most up-to-date security features. With a hardware wallet, investors can keep their cryptocurrencies secure and even recover them in case of loss, making it the go-to option for long-term investors.
In conclusion, the rise of cyberattacks and the increasing number of DeFi protocols have urged crypto investors to reconsider the security of their crypto investments. Hardware wallets offer a reliable and secure solution for crypto investors, giving them complete control over their assets while minimizing the risk of loss or theft.
FTX-ed crypto investors are moving back to hardware wallets, not only for strong security but also to participate more effectively in different DeFi protocols. The hardware wallet providers have recognized the shift and are introducing new features and supporting a wider range of cryptocurrencies and tokens to cater to the demand.
As the DeFi market continues to grow, the need for stronger security measures will become more vital for investors to protect their investments and maximize ROI. Hardware wallets offer the best solution to keep up with these changes and protect cryptocurrency investments.
The recent collapse of cryptocurrency exchange FTX and the loss of billions of dollars worth of customer’s crypto has prompted a surge in demand for self-custody devices. Experts warn that allowing a third-party to store coins on behalf of users is a fatal mistake that flies in the face of the maxim “not your keys, not your coins.” Many are turning to self-custody or managing their own private crypto wallets, secured by secret alphanumeric keys. The appeal of self-custody is clear, as it puts control firmly back in the hands of the user. However, the risk is significant, as lost private keys and recovery phrases can render the crypto inaccessible. This has prompted developers to create solutions that make self-custody more accessible and less risky. Hardware wallet maker Ledger has launched a new service called Ledger Recover that splits a wallet recovery phrase into three encrypted shards and distributes them to three custodians. The account holder can regain access to the locked funds by combining two or three of the shards, subject to an ID check. The service costs $9.99 a month and is available in the UK, EU, US, and Canada. Ledger’s main competitor in the hardware market, Trezor, has its own solution called Shamir Backup that lets users split their recovery phrase into as many as 16 shards. Another solution under development is account abstraction, a halfway house between self-custody and custody. The team behind MetaMask, a popular software self-custody wallet for the Ethereum blockchain, is pushing for a new technical standard for Ethereum that would create a new variant of self-custody that is user-friendly and simpler. For those looking to take direct ownership of their money, personal responsibility is a cost of entry, described in crypto circles as financial sovereignty. The challenge is to make that personal responsibility less daunting and more accessible. Experts warn that education is key in encouraging more people to adopt self-custody and become financially sovereign. Ease of use is a primary concern for developers trying to bridge the gap between technical users and non-technical users. In developing user-friendly solutions, developers are taking a Steve Jobs-inspired approach and working backward from the goal of mass adoption to identify necessary steps to make self-custody more accessible. Solutions like Ledger Recover are leading the way in making self-custody less scary and more user-friendly by providing all of the necessary niceties and safety mechanisms regular people are looking for.
