There has been countless posts on Leo Finance talking about security, which is why I'm dazed that Hive users are still falling for scams like giving away your MM recovery phrase, approving weird contracts, or simply losing their private keys. The bear market has been full force for more than a year now and scammers are everywhere, which is why I wanted to make this post.
Do you even know the difference between a hot wallet and a cold wallet? If you don't research it, that's the first step to bring more security to your crypto holdings and to actually start getting in charge of your assets.
Autonomy, which by crypto definition means token self custody is one of the main pillars of cryptocurrency, to de-bank yourself from the traditional financial system set upon us by the powers at play for hundreds of years. What's the point of owning crypto, if you are not financially sovereign and economically independent?
That's why I am so weirded about by people who keep assets on exchanges, where they are not the owners of the tokens. An exchange receives your tokens so you can play around, trade and lock tokens, but in the end they are the ones keeping custody of your tokens and they will only relinquish that custody when you decide to move the tokens out of the exchange. In the meantime, these tokens are theirs for them to do whatever it pleases them. The FTX debacle wouldn't have happened if people kept their bags off the exchange.
Centralized Exchanges are like traditional banks. They take people's money and they move it around in the background while showing the user only the front, without us being able to see what's going on and obviously, without a say on what happens with our tokens. That's why whenever a CEX goes down, the first ones to suffer are the end users, the morons who kept their funds on exchanges.
Bitcoin at first, but now also altcoins, are meant to decentralize finance and provide options for the average Joe to move away from old institutions and a centralized system made of centralized entities.
Cold storage is one of the answers that cryptocurrency and blockchain offer for those who want to be their own bank, and hardware security is the main option for people with this mindset. It doesn't matter where you keep your crypto as long as you are the rightful key owner and you can do whatever it pleases you to your coins.
I know of people who write down their keys and bury them in the garden so that nobody ever is able to steal their coins. I know also about that story of a Finnish guys whose girlfriend threw away his hardware after a fight and he's up to this date searching for that hardware in the municipal garbage storage... or something along those lines. There are many ways to keep your crypto secure, you just have to not be a moron about it and do your due diligence when you choose an option. There are also stories where someone dies and nobody has access to their crypto keys and those coins are lost forever.
The question here is, if you are already keeping your crypto secure, who has access to your keys?
In the FIAT system if your bank goes bankrupt, they don't pay you back, there is no guarantee, so when you emulate this scenario to the crypto world it's pretty much the same. The advice every serious person gives is don't leave your funds in the exchange, keep them in your self custody wallet.
There's also the question about software wallet, phone or computer. Those glitch, get stolen, get hacked and whatnot. Your crypto is not secure if you leave it there, and unless it is only a small chunk of your investment or your play money, you are going to have the hardest of times if you lose access to them, or if someone else gets access to them.
Another advice I can give you is to never buy any hardware device from a third party, even if it's a close friend. Go buy it directly from the creator, ledgers or somebody else with a market reputation - and this third option is shady, I'd rather just go to the creator of the hardware wallet.
There's no excuse to not keep your crypto secure. Perhaps in 2013 where there wasn't enough educational and learning resources, it was kind of OK to mismanage your funds and lose them, but not right now. Today, everyone and their grandma have some sort of crypto academy on their website for anyone to access. Hell, some projects offer the option to tokenize your learning through incentive programs. There's no excuse to not be as prepared as possible when it comes to crypto security.
This is not web2, where you can just ignore the terms and conditions when you download Angry Birds. In web2, mistakes do not cost anything, but in web3, mistakes can cost you your life savings and years of hard work. Web2 has spoiled us, and the banking system is happy to see us sign a contract without reading anything (let alone the small print), which makes web3 even harder to adopt.
In web3 there's no option to go crying to mommy when you make a mistake. I'll give you that, web2 and the TradFi system have that on their favor, whenever a moron makes a mistake they can solve it for you. Most people are happy with this idea of not being in charge of anything and being able to ask for help on every single aspect of their life. Web3 and blockchain solve this. The problem is, there are not many people who consider this a problem, so why would they need to solve it.
People don't care about sovereignty, autonomy and independence. They just want to be happy and unbothered.
But if you are one of the few who is actually looking for financial independence, economical autonomy, self-reliance and sovereignty above all else, then go read reviews, watch youtubers and document yourself before choosing a self-custody hardware and system, think about what security they offer and also take into account the ease of use, a good software has to come with a great hardware, compatibility and easy to use are important.
Regulations are coming to the crypto world, and they are doing so fast and crude. To get a win-win fro crypto and the system, we need to look back to libra and mica regulation that happened thanks to facebook and against to crypto.
Some people hate free markets and capitalism, and the system is pushing for regulations with little to no pushback because both parties (the system and the sheep) think they work for the greater good, but they just don't like crypto and Bitcoin goes against their agenda.
The truth is that every single time I see a conflict between centralized entities and average Joes, I think to myself: If that person didn't rely on the system for everything, he wouldn't be in this conundrum. But they trade off their autonomy for security, when in reality there are ways to provide yourself enough security to stop relying on an entity that wants nothing but your downfall, and get your autonomy back.
Remember Lions, not your keys, not your crypto!