November 2022. FTX collapsed.
I had funds caught on the alternate. Not my whole portfolio – I’d already moved most to chilly storage – however sufficient to harm.
Three years later, I’m nonetheless ready for partial compensation based mostly on 2022 costs. In the meantime, the crypto I might have held is value 7x extra.
That’s once I discovered: “not your keys, not your cash” isn’t a slogan. It’s a survival rule.
Right here’s how I retailer crypto now – and why you want a number of wallets, not only one.
The Factor No person Needs to Speak About
Quick ahead to October 2025: Trump pardons CZ. A $4.3 billion Binance positive disappears. Everybody celebrates the regulatory reset.
Me? I’m reminded that if political connections can erase a multi-billion greenback penalty, what makes you assume your funds are secure on any alternate?
Binance paid the positive. CZ served 4 months. Now he’s free, and the alternate is stronger than ever.
Nice for crypto adoption. Horrible for anybody who thinks “too huge to fail” means “secure to belief.”
As a result of right here’s the fact: exchanges get hacked. They go bankrupt. They freeze withdrawals. And when it occurs, your “Bitcoin” is only a quantity in another person’s database.
Not your keys, not your cash.
What Exchanges Don’t Inform You
Let me hit you with some numbers that ought to scare you:
$1.4 billion stolen from exchanges and protocols in 2024. Whereas that is down from 2023, it’s nonetheless large.
Mt.Gox (2014): $450 million gone. Customers waited 11 years for compensation – and eventually began receiving partial compensation in 2024.
FTX (2022): $8 billion vanished. Sam Bankman-Fried obtained 25 years. Most customers? They obtained a claims quantity and are nonetheless ready. The compensation plan guarantees 118–142% of declare worth – however based mostly on 2022 costs. Bitcoin was $16,600 then. As we speak? $115,000. That’s a 7x alternative price.
Binance (a number of incidents): Regardless of being the biggest alternate, they’ve confronted safety challenges together with the 2022 incident that resulted in $570 million affected (later recovered by means of freezing).
And people are simply the large names you’ve heard of. Smaller exchanges? They collapse commonly.
Even when an alternate doesn’t get hacked, they will:
• Freeze your account throughout “upkeep” (normally once you wish to withdraw)
• Go bankrupt and tie your funds up in years of authorized proceedings
• Get regulated out of existence in sure jurisdictions
• Determine you violated some Phrases of Service you by no means learn
The sample? You don’t management the keys. They do. And when issues go incorrect, you’re simply one other creditor hoping to get pennies again.
What FTX Taught Me
I saved crypto on FTX as a result of it was “handy.” The interface was clear. The yields had been good. Everybody I knew used it. Sam Bankman-Fried was on TV with celebrities. It felt secure.
Then one morning in November 2022, withdrawals stopped. Inside 48 hours, FTX filed for chapter.
My funds had been locked. No entry. No warning.
The FTX chapter course of revealed that buyer funds had been used for dangerous buying and selling at Alameda Analysis. The crypto wasn’t sitting in wallets. It was gone, gambled away.
The worst half? It was fully preventable. If I’d spent a couple of hundred {dollars} on {hardware} wallets and adopted correct safety, these funds would nonetheless be mine – and value 7x extra right now.
What Really Retains Your Crypto Protected
A {hardware} pockets (additionally known as a chilly pockets) is a bodily gadget that shops your non-public keys offline.
Consider it like this:
• Sizzling pockets (alternate, cellphone app): Your keys are on-line, related to the web, susceptible 24/7.
• {Hardware} pockets: Your keys by no means contact the web. Hackers can’t entry what isn’t on-line.
Once you wish to ship crypto, the transaction will get signed on the gadget itself, then broadcast. Your non-public keys by no means go away the {hardware}.
Even when your pc is contaminated with malware, even for those who’re utilizing public WiFi, even when somebody’s watching your display – they will’t steal your keys.
It’s not foolproof. Nothing is. Nevertheless it’s the closest factor to “unhackable” that exists in crypto.
How I Retailer Crypto Now (The Multi-Layer Technique)
After FTX, I redesigned my whole strategy. Right here’s the system I take advantage of:
Layer 1: Lengthy-Time period Chilly Storage
What I take advantage of: A number of {hardware} wallets from completely different producers
Why a number of units:
• Major Ledger Nano X: Predominant Bitcoin and Ethereum holdings
• Major Trezor Mannequin T: Backup + completely different safety structure
• If one firm has a vulnerability, the opposite protects my holdings
Storage:
• Units in separate safe places
• Restoration phrases saved individually from units
• By no means multi functional place
What goes right here:
• Bitcoin and Ethereum long-term holdings
• Any crypto I received’t contact for years
• Nearly all of my portfolio
Why this works:
• Offline = unhackable by distant assaults
• Diversified throughout producers
• Bodily separation prevents single level of failure
Layer 2: Lively Chilly Storage
What I take advantage of: Secondary {hardware} pockets
Why separate from long-term storage:
• I don’t wish to always entry my major chilly wallets (safety danger)
• This pockets is for crypto I’d transfer in 3–12 months
• Used for staking by means of official pockets apps
What goes right here:
• Crypto I’m staking (incomes 3–17% APY)
• Positions I’d commerce inside the 12 months
• Medium-term holdings
Why this works:
• Can stake straight from {hardware} pockets (by means of Ledger Stay/Trezor Suite)
• Stability between safety and accessibility
• Staking rewards with out alternate danger
Layer 3: Change Holdings
What I take advantage of: Two exchanges (Binance + Coinbase)
Wait, didn’t you simply say exchanges are dangerous?
Sure. However right here’s the fact: you want exchanges for sure issues.
What I carry on exchanges:
• Buying and selling capital
• Stablecoins incomes yield (at present 4–8% APY)
• Small quantities of altcoins not supported by {hardware} wallets
My alternate guidelines:
• Maintain minimal quantities
• Break up between two exchanges (diversification)
• Withdraw instantly after shopping for
• Allow all security measures
Why this strategy:
• I should buy crypto when alternatives come up
• Earn staking rewards on stablecoins
• If one alternate collapses, I don’t lose every little thing
The {Hardware} Wallets I Really Belief
I’ve examined each main {hardware} pockets. Some are clunky. Some have horrible interfaces. Listed below are those I’d suggest.
Fast Comparability
💰 Value
• Ledger Nano X: $149
• Trezor Mannequin T: $169
• Tangem Pockets: $50
• Ledger Nano S Plus: $79
🪙 Cash Supported
• Ledger Nano X: 5,500+
• Trezor Mannequin T: 1,500+
• Tangem Pockets: 6,000+
• Ledger Nano S Plus: 5,500+
📱 Connectivity
• Ledger Nano X: Bluetooth + USB ✅
• Trezor Mannequin T: USB solely
• Tangem Pockets: NFC (faucet to cellphone) ✅
• Ledger Nano S Plus: USB solely
🔐 Kind Issue
• Ledger: USB gadget with display
• Trezor: USB gadget with touchscreen
• Tangem: Card (like bank card)
• Ledger: USB gadget with display
⭐ My Score
• Ledger Nano X: 9/10 (greatest general)
• Trezor Mannequin T: 9/10 (greatest for chilly storage)
• Tangem Pockets: 7.5/10 (greatest for newcomers)
• Ledger Nano S Plus: 8/10 (greatest worth)
Ledger Nano X – Finest Total ($149)
That is what I take advantage of for staking and positions I’d transfer inside a 12 months.
What I like:
• Helps 5,500+ cryptocurrencies (principally every little thing)
• Bluetooth connectivity (you need to use it together with your cellphone)
• Ledger Stay app is intuitive
• Constructed-in battery lasts weeks
• Can stake ETH, ADA, SOL, DOT straight from the gadget
What I don’t like:
• Not totally open-source (Ledger’s safety chip is proprietary)
• Barely pricier than price range choices
Who it’s for: Anybody who desires to stake crypto, use DeFi often, or wants cellular entry.
Get it right here: [Ledger Official Store]
2. Trezor Mannequin T – Finest for Chilly Storage ($169)
That is what I take advantage of for long-term Bitcoin and Ethereum storage.
What I like:
• Absolutely open-source ({hardware} and software program)
• Shade touchscreen interface
• No Bluetooth (some see this as safer for chilly storage)
• Shamir Backup assist (can break up restoration phrase)
• Robust status in Bitcoin neighborhood
What I don’t like:
• Helps fewer cash than Ledger (1,500+ vs 5,500+)
• No Bluetooth means much less handy for lively use
Who it’s for: Lengthy-term holders who prioritize most safety and open-source verification.
Get it right here: [Trezor Official Store]
3. Tangem Pockets – Finest for Newbies ($50)
A card-based {hardware} pockets that works with NFC (faucet to cellphone). Best to make use of, however restricted performance.
What I like:
• Least expensive choice at $50
• Very simple (simply faucet to cellphone)
• No charging wanted (no battery)
• Helps 6,000+ cash
• Appears like a bank card (discreet)
• Sturdy (water/mud resistant)
What I don’t like:
• No display (should belief cellphone app)
• Can’t stake or use DeFi straight
• Much less safe than units with screens (can’t confirm addresses on gadget)
• Tangem controls some features of key era
Who it’s for: Full newcomers who need the only potential setup, or as a backup pockets for small quantities.
Get it right here: [Tangem Official Store]
4. Ledger Nano S Plus – Finest Funds Choice ($79)
Identical safety because the Nano X, fewer options. Excellent for intermediate customers on a price range.
What I like:
• Half the value of Nano X
• Identical safety chip
• Helps 5,500+ cash
• No battery to fret about
• Bigger display than authentic Nano S
What I don’t like:
• No Bluetooth (should plug into pc)
• Smaller display than Nano X
Who it’s for: Intermediate customers who don’t want cellular connectivity.
Get it right here: [Ledger Official Store]
Which Pockets Ought to You Really Get?
Should you’re model new to crypto (lower than $500):
Begin with Tangem Pockets ($50). It’s easy, low-cost, and will get you aware of self-custody.
Should you maintain $500-$5,000:
Get Ledger Nano S Plus ($79). Finest worth, full performance.
Should you maintain $5,000-$50,000:
Get Ledger Nano X ($149). You want Bluetooth comfort and staking functionality.
Should you maintain $50,000+:
Get each Ledger Nano X and Trezor Mannequin T ($318 complete). Break up your holdings throughout completely different producers for max safety.
If you need most safety for long-term storage:
Get Trezor Mannequin T ($169). Absolutely open-source, no Bluetooth, good for chilly storage.
Why I Personal A number of Units of the Identical Mannequin
Right here’s one thing most guides received’t let you know: I don’t simply personal completely different pockets manufacturers – I personal a number of models of the identical mannequin.
My precise setup:
• Two Ledger Nano X units
• Two Trezor Mannequin T units
• One Ledger Nano S Plus
• One Tangem (for small quantities/journey)
Complete: 6 bodily units.
Why Purchase Duplicates?
{Hardware} Failure
{Hardware} wallets can break. Screens die. Buttons fail.
When my main Ledger’s display began glitching, I merely restored my accounts utilizing the identical 24-word phrase on my backup gadget and continued with out lacking a beat.
Geographic Redundancy
I preserve units in numerous places:
• Major units: Safe places I entry commonly
• Backup units: Separate places (completely different metropolis/member of the family’s home)
If my home burns down, I lose one gadget. Not all of them.
Firmware Updates
Firmware updates often trigger points.
My rule: By no means replace all units directly.
• Replace main gadget first
• Check for per week
• If secure, replace backup
This fashion, if an replace causes issues, I at all times have a working gadget.
The Value-Profit
Extra price:
• Further Ledger Nano X: $149
• Further Trezor Mannequin T: $169
• Complete: $318 for peace of thoughts
For anybody holding important crypto, spending an additional $318 on backup units is clear danger administration.
The Precept of Purposeful Isolation
Right here’s a safety idea most individuals miss: Don’t use the identical pockets for every little thing.
My rule: Storage wallets keep offline. Lively wallets deal with transactions.
Why This Issues
Think about you’re interacting with a DeFi protocol. You assume you’re approving a reputable transaction, however it’s really a phishing assault.
If all of your wallets are related to DeFi:
• Signal malicious transaction on Pockets A → drained
• Test Pockets B → signal related transaction → drained
• Pockets C? Identical sample → drained
Should you observe practical isolation:
• Storage Pockets: By no means connects to DeFi, by no means indicators sensible contracts
• Staking Pockets: Solely used by means of official apps (Ledger Stay, Trezor Suite)
• Lively Pockets: Used for DeFi, swaps, experiments
Outcome: Even when your Lively Pockets will get drained, your Storage Pockets was by no means uncovered.
My Precise Pockets Capabilities
Chilly Storage Wallets (By no means Contact These):
• Major units: Bitcoin and Ethereum long-term holdings ONLY
• No DeFi interactions
• No sensible contract approvals
• Solely receives deposits
• Saved in safe places, not often accessed
Staking Pockets:
• Secondary gadget: Staking ONLY by means of official apps
• Ethereum, Cardano, Polkadot staking
• No exterior DeFi protocols
• No token approvals exterior official apps
Lively Pockets:
• Tertiary gadget: DeFi, swaps, new protocols
• This pockets interacts with sensible contracts
• Holds smaller quantities
• If compromised, restricted loss
Journey/Day by day Pockets:
• Tangem card: Small quantities for each day transactions
• Straightforward to hold, faucet to cellphone
• If misplaced or stolen, minimal loss
Use Totally different Restoration Phrases
That is crucial:
• Storage Pockets = Restoration Phrase A
• Staking Pockets = Restoration Phrase B
• Lively Pockets = Restoration Phrase C
• Journey Pockets = Restoration Phrase D
In case your Lively Pockets’s seed phrase will get compromised, your Storage Pockets stays secure.
The Setup Course of
For Ledger:
1. Unbox, plug in by way of USB
2. Arrange 8-digit PIN
3. Write down 24-word restoration phrase (CRITICAL)
4. Set up Ledger Stay app
5. Add Bitcoin/Ethereum accounts
6. Switch small check quantity ($20)
7. Affirm it arrives, then switch the remaining
Complete time: 20–half-hour
For Trezor:
1. Plug in, observe touchscreen prompts
2. Arrange PIN
3. Write down 24-word restoration phrase
4. Set up Trezor Suite
5. Add accounts
6. Check switch, then transfer major holdings
Complete time: 20–half-hour
For Tangem:
1. Obtain Tangem app on cellphone
2. Faucet card to cellphone (NFC)
3. Create pockets (Tangem generates keys on card)
4. Write down backup card entry code
5. Switch small check quantity
6. Confirm it arrives
Complete time: 10–quarter-hour (best setup)
The One Mistake That Will Value You The whole lot
Dropping or exposing your 24-word restoration phrase.
That phrase IS your crypto. If somebody will get it, they personal your funds. Should you lose it and your gadget breaks, your crypto is gone perpetually.
What NOT to do:
• ❌ Don’t take a photograph
• ❌ Don’t retailer it digitally
• ❌ Don’t retailer it together with your {hardware} pockets
• ❌ Don’t inform anybody, ever
What TO do:
• ✅ Write it on the cardboard supplied
• ✅ Retailer in a fireproof secure
• ✅ Think about a steel backup (survives fireplace/flood)
• ✅ Retailer backup copy in numerous bodily location
• ✅ By no means retailer all backups collectively
What I Realized From FTX
Lesson 1: Centralization is a single level of failure
FTX wasn’t hacked. It was mismanaged. Your funds are solely as secure because the individuals operating the platform.
Lesson 2: “Too huge to fail” doesn’t exist in crypto
FTX was the second-largest alternate. It collapsed in 48 hours.
Lesson 3: Diversification isn’t elective
If I’d break up my holdings correctly throughout chilly wallets and a number of exchanges, my losses would have been minimal.
Lesson 4: Liquidity issues
Having some funds accessible means you’ll be able to act when alternatives come up. Full chilly storage sounds secure, however it’s rigid.
Lesson 5: Self-custody is the endgame
The objective isn’t to keep away from exchanges perpetually. It’s to reduce publicity and maximize self-custody for holdings you don’t want to the touch.
My Suggestions Primarily based on Your Holdings
Should you maintain lower than $500:
Begin with Tangem Pockets ($50). Easy, low-cost, will get you began with self-custody.
Should you maintain $500-$5,000:
Get Ledger Nano S Plus ($79). Finest worth with full performance.
Should you maintain $5,000-$50,000:
Get Ledger Nano X ($149) + backup gadget. You want cellular entry and redundancy.
Should you maintain $50,000-$500,000:
Get Ledger Nano X + Trezor Mannequin T ($318). Break up throughout producers. Add backups of every.
Should you maintain $500,000+:
Get a number of units, use practical isolation, take into account multi-sig, seek the advice of a safety skilled.
The Actual Value of Not Performing
A Ledger Nano X prices $149.
FTX taught hundreds of individuals this lesson the arduous method. Common losses? Hundreds per individual.
So that you’re risking hundreds to avoid wasting $149.
That’s not being frugal. That’s playing with cash you’ll be able to’t afford to lose.
Right here’s What You Ought to Do Proper Now
Should you’re holding crypto on an alternate, you’re taking an pointless danger.
For most individuals: Get a Ledger Nano X ($149)
On a good price range: Get a Tangem Pockets ($50) or Ledger Nano S Plus ($79)
For severe holdings: Get each Ledger Nano X and Trezor Mannequin T ($318 complete)
Set it up this weekend. Switch your funds. Sleep higher.
Not your keys, not your cash. Don’t be taught this the arduous method.
Transparency Be aware
Some hyperlinks on this article are affiliate hyperlinks. Should you purchase by means of them, I earn a small fee at no additional price to you. I solely suggest merchandise I’ve personally examined and use myself. The {hardware} wallets defending my crypto proper now had been bought with my very own cash, and I sleep higher due to them.
What’s your setup? Nonetheless preserving funds on exchanges, or have you ever made the transfer to chilly storage? Drop a remark beneath – I learn each one.
