November 2022. FTX collapsed.
I had funds caught on the alternate. Not my complete portfolio – I’d already moved most to chilly storage – however sufficient to harm.
Three years later, I’m nonetheless ready for partial reimbursement based mostly on 2022 costs. In the meantime, the crypto I may have held is value 7x extra.
That’s after I realized: “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 Desires to Speak About
Quick ahead to October 2025: Trump pardons CZ. A $4.3 billion Binance high-quality disappears. Everybody celebrates the regulatory reset.
Me? I’m reminded that if political connections can erase a multi-billion greenback penalty, what makes you suppose your funds are secure on any alternate?
Binance paid the high-quality. 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 large to fail” means “secure to belief.”
As a result of right here’s the truth: 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 huge.
Mt.Gox (2014): $450 million gone. Customers waited 11 years for compensation – and eventually began receiving partial reimbursement in 2024.
FTX (2022): $8 billion vanished. Sam Bankman-Fried bought 25 years. Most customers? They bought a claims quantity and are nonetheless ready. The reimbursement plan guarantees 118–142% of declare worth – however based mostly on 2022 costs. Bitcoin was $16,600 then. In the present day? $115,000. That’s a 7x alternative price.
Binance (a number of incidents): Regardless of being the most important alternate, they’ve confronted safety challenges together with the 2022 incident that resulted in $570 million affected (later recovered by way of freezing).
And people are simply the massive names you’ve heard of. Smaller exchanges? They collapse repeatedly.
Even when an alternate doesn’t get hacked, they’ll:
• Freeze your account throughout “upkeep” (often while you need 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 flawed, 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 have 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 have 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 utterly preventable. If I’d spent just a few hundred {dollars} on {hardware} wallets and adopted correct safety, these funds would nonetheless be mine – and price 7x extra as we speak.
What Truly Retains Your Crypto Protected
A {hardware} pockets (additionally referred to as a chilly pockets) is a bodily system that shops your non-public keys offline.
Consider it like this:
• Scorching pockets (alternate, telephone app): Your keys are on-line, linked 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.
While you need to ship crypto, the transaction will get signed on the system itself, then broadcast. Your non-public keys by no means depart the {hardware}.
Even when your pc is contaminated with malware, even if you happen to’re utilizing public WiFi, even when somebody’s watching your display screen – they’ll’t steal your keys.
It’s not foolproof. Nothing is. However 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 complete method. 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 totally different producers
Why a number of units:
• Main Ledger Nano X: Principal Bitcoin and Ethereum holdings
• Main Trezor Mannequin T: Backup + totally different safety structure
• If one firm has a vulnerability, the opposite protects my holdings
Storage:
• Gadgets 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 gained’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 need to continuously entry my essential chilly wallets (safety threat)
• This pockets is for crypto I would transfer in 3–12 months
• Used for staking by way of official pockets apps
What goes right here:
• Crypto I’m staking (incomes 3–17% APY)
• Positions I would commerce throughout the 12 months
• Medium-term holdings
Why this works:
• Can stake straight from {hardware} pockets (by way of Ledger Dwell/Trezor Suite)
• Stability between safety and accessibility
• Staking rewards with out alternate threat
Layer 3: Trade 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 truth: you want exchanges for sure issues.
What I carry on exchanges:
• Buying and selling capital
• Stablecoins incomes yield (presently 4–8% APY)
• Small quantities of altcoins not supported by {hardware} wallets
My alternate guidelines:
• Maintain minimal quantities
• Cut up between two exchanges (diversification)
• Withdraw instantly after shopping for
• Allow all security measures
Why this method:
• I should buy crypto when alternatives come up
• Earn staking rewards on stablecoins
• If one alternate collapses, I don’t lose all the things
The {Hardware} Wallets I Truly Belief
I’ve examined each main {hardware} pockets. Some are clunky. Some have horrible interfaces. Listed here 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 telephone) ✅
• Ledger Nano S Plus: USB solely
🔐 Kind Issue
• Ledger: USB system with display screen
• Trezor: USB system with touchscreen
• Tangem: Card (like bank card)
• Ledger: USB system with display screen
⭐ My Ranking
• Ledger Nano X: 9/10 (finest total)
• Trezor Mannequin T: 9/10 (finest for chilly storage)
• Tangem Pockets: 7.5/10 (finest for rookies)
• Ledger Nano S Plus: 8/10 (finest worth)
Ledger Nano X – Greatest General ($149)
That is what I take advantage of for staking and positions I would transfer inside a 12 months.
What I like:
• Helps 5,500+ cryptocurrencies (principally all the things)
• Bluetooth connectivity (you need to use it along with your telephone)
• Ledger Dwell app is intuitive
• Constructed-in battery lasts weeks
• Can stake ETH, ADA, SOL, DOT straight from the system
What I don’t like:
• Not absolutely open-source (Ledger’s safety chip is proprietary)
• Barely pricier than funds choices
Who it’s for: Anybody who needs to stake crypto, use DeFi often, or wants cellular entry.
Get it right here: [Ledger Official Store]
2. Trezor Mannequin T – Greatest for Chilly Storage ($169)
That is what I take advantage of for long-term Bitcoin and Ethereum storage.
What I like:
• Totally open-source ({hardware} and software program)
• Coloration touchscreen interface
• No Bluetooth (some see this as safer for chilly storage)
• Shamir Backup help (can break up restoration phrase)
• Robust fame in Bitcoin group
What I don’t like:
• Helps fewer cash than Ledger (1,500+ vs 5,500+)
• No Bluetooth means much less handy for energetic 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 – Greatest for Inexperienced persons ($50)
A card-based {hardware} pockets that works with NFC (faucet to telephone). Best to make use of, however restricted performance.
What I like:
• Least expensive possibility at $50
• Very simple (simply faucet to telephone)
• No charging wanted (no battery)
• Helps 6,000+ cash
• Seems like a bank card (discreet)
• Sturdy (water/mud resistant)
What I don’t like:
• No display screen (should belief telephone app)
• Can’t stake or use DeFi straight
• Much less safe than units with screens (can’t confirm addresses on system)
• Tangem controls some elements of key era
Who it’s for: Full rookies 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 – Greatest Finances Choice ($79)
Similar safety because the Nano X, fewer options. Good for intermediate customers on a funds.
What I like:
• Half the value of Nano X
• Similar safety chip
• Helps 5,500+ cash
• No battery to fret about
• Bigger display screen than authentic Nano S
What I don’t like:
• No Bluetooth (should plug into pc)
• Smaller display screen 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 Truly Get?
In the event you’re model new to crypto (lower than $500):
Begin with Tangem Pockets ($50). It’s easy, low cost, and will get you conversant in self-custody.
In the event you maintain $500-$5,000:
Get Ledger Nano S Plus ($79). Greatest worth, full performance.
In the event you maintain $5,000-$50,000:
Get Ledger Nano X ($149). You want Bluetooth comfort and staking functionality.
In the event you maintain $50,000+:
Get each Ledger Nano X and Trezor Mannequin T ($318 complete). Cut up your holdings throughout totally different producers for optimum safety.
In order for you most safety for long-term storage:
Get Trezor Mannequin T ($169). Totally open-source, no Bluetooth, good for chilly storage.
Why I Personal A number of Gadgets of the Similar Mannequin
Right here’s one thing most guides gained’t let you know: I don’t simply personal totally 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)
Whole: 6 bodily units.
Why Purchase Duplicates?
{Hardware} Failure
{Hardware} wallets can break. Screens die. Buttons fail.
When my main Ledger’s display screen began glitching, I merely restored my accounts utilizing the identical 24-word phrase on my backup system and continued with out lacking a beat.
Geographic Redundancy
I preserve units in several places:
• Main units: Safe places I entry repeatedly
• Backup units: Separate places (totally different metropolis/member of the family’s home)
If my home burns down, I lose one system. Not all of them.
Firmware Updates
Firmware updates often trigger points.
My rule: By no means replace all units without delay.
• Replace main system first
• Take a look at for per week
• If secure, replace backup
This fashion, if an replace causes issues, I all the time have a working system.
The Price-Profit
Further price:
• Further Ledger Nano X: $149
• Further Trezor Mannequin T: $169
• Whole: $318 for peace of thoughts
For anybody holding vital crypto, spending an additional $318 on backup units is clear threat administration.
The Precept of Practical Isolation
Right here’s a safety idea most individuals miss: Don’t use the identical pockets for all the things.
My rule: Storage wallets keep offline. Lively wallets deal with transactions.
Why This Issues
Think about you’re interacting with a DeFi protocol. You suppose you’re approving a authentic transaction, however it’s truly a phishing assault.
If all of your wallets are linked to DeFi:
• Signal malicious transaction on Pockets A → drained
• Verify Pockets B → signal comparable transaction → drained
• Pockets C? Similar sample → drained
In the event you observe practical isolation:
• Storage Pockets: By no means connects to DeFi, by no means indicators sensible contracts
• Staking Pockets: Solely used by way of official apps (Ledger Dwell, Trezor Suite)
• Lively Pockets: Used for DeFi, swaps, experiments
End result: Even when your Lively Pockets will get drained, your Storage Pockets was by no means uncovered.
My Precise Pockets Features
Chilly Storage Wallets (By no means Contact These):
• Main 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 system: Staking ONLY by way of official apps
• Ethereum, Cardano, Polkadot staking
• No exterior DeFi protocols
• No token approvals exterior official apps
Lively Pockets:
• Tertiary system: DeFi, swaps, new protocols
• This pockets interacts with sensible contracts
• Holds smaller quantities
• If compromised, restricted loss
Journey/Each day Pockets:
• Tangem card: Small quantities for every day transactions
• Simple to hold, faucet to telephone
• If misplaced or stolen, minimal loss
Use Totally different Restoration Phrases
That is important:
• 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 Dwell app
5. Add Bitcoin/Ethereum accounts
6. Switch small check quantity ($20)
7. Verify it arrives, then switch the remaining
Whole time: 20–half-hour
For Trezor:
1. Plug in, comply with touchscreen prompts
2. Arrange PIN
3. Write down 24-word restoration phrase
4. Set up Trezor Suite
5. Add accounts
6. Take a look at switch, then transfer essential holdings
Whole time: 20–half-hour
For Tangem:
1. Obtain Tangem app on telephone
2. Faucet card to telephone (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
Whole time: 10–quarter-hour (best setup)
The One Mistake That Will Price You Every thing
Dropping or exposing your 24-word restoration phrase.
That phrase IS your crypto. If somebody will get it, they personal your funds. In the event you lose it and your system breaks, your crypto is gone eternally.
What NOT to do:
• ❌ Don’t take a photograph
• ❌ Don’t retailer it digitally
• ❌ Don’t retailer it along with your {hardware} pockets
• ❌ Don’t inform anybody, ever
What TO do:
• ✅ Write it on the cardboard supplied
• ✅ Retailer in a fireproof secure
• ✅ Contemplate a steel backup (survives hearth/flood)
• ✅ Retailer backup copy in several bodily location
• ✅ By no means retailer all backups collectively
What I Discovered 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 folks operating the platform.
Lesson 2: “Too large 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 aim isn’t to keep away from exchanges eternally. It’s to attenuate publicity and maximize self-custody for holdings you don’t want to the touch.
My Suggestions Primarily based on Your Holdings
In the event you maintain lower than $500:
Begin with Tangem Pockets ($50). Easy, low cost, will get you began with self-custody.
In the event you maintain $500-$5,000:
Get Ledger Nano S Plus ($79). Greatest worth with full performance.
In the event you maintain $5,000-$50,000:
Get Ledger Nano X ($149) + backup system. You want cellular entry and redundancy.
In the event you maintain $50,000-$500,000:
Get Ledger Nano X + Trezor Mannequin T ($318). Cut up throughout producers. Add backups of every.
In the event you maintain $500,000+:
Get a number of units, use practical isolation, contemplate multi-sig, seek the advice of a safety professional.
The Actual Price of Not Performing
A Ledger Nano X prices $149.
FTX taught 1000’s of individuals this lesson the exhausting manner. Common losses? Hundreds per particular person.
So that you’re risking 1000’s to save lots of $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
In the event you’re holding crypto on an alternate, you’re taking an pointless threat.
For most individuals: Get a Ledger Nano X ($149)
On a good funds: 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 exhausting manner.
Transparency Word
Some hyperlinks on this article are affiliate hyperlinks. In the event you purchase by way 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 have been bought with my very own cash, and I sleep higher due to them.
What’s your setup? Nonetheless protecting funds on exchanges, or have you ever made the transfer to chilly storage? Drop a remark beneath – I learn each one.