Last updated on May 27th, 2018
So you’ve finally bought some cryptocurrencies from a crypto exchange and then the next day you woke up to headlines saying that $10 Million of Bitcoin gets stolen from another exchange.
Lucky you! But what now. Should you sell now and get back your money before it’s too late or should you buy a hardware wallet like every old-timer crypto investor suggests?
But it’s quite expensive, you said. Considering you’ve invested just $500 into Ethereum, a hardware wallet like Ledger Nano S on Carousell now costs $200!
What should you do? Then this is for you.
First of all, no doubt that I always advocate owning your own hardware wallet as it is by far the safest means to prevent your coins from getting stolen. Assuming you keep your private keys, passwords or 12/24 key phrases safe and practice correct use of wallets, eg. creating disposable wallets.
A good rule of thumb to know if your investment is practical for you to buy a concrete hardware wallet will be the 5% rule.
For the 5% rule, if the total cost (purchase + shipping + tax + etc.) of the hardware wallet that you want to buy costs more than 5% of your portfolio value, it is “out of your budget” and not practically worth for you at the time of calculation. As the value of your investment’s value grows, you might need to come back and recalculate it again.
The 5% Rule:
If [ [Total Costs of wallet] / [Total Investment Value] X 100% ] is more than 5%, NOT practically worth. Otherwise, if is less than 5%, go get yourself one.
This rule has worked really well for me and my peers to sleep in peace at night, knowing our investments are in the safest possible place.
Why not a fixed investment value before the purchase?
Because situations happen, like now where there is no new stock being shipped by Ledger, the market selling at way above the retail price due to over-demand meeting limited supply. Hence, this 5% rule will come handy to ensure you do not overspend on the wallet and under invest in the coin itself.
So the question if purchasing a cryptowallet is practical for you is hence resolved.
For more in depth on How To Set Up The Safest, Free And Easy-To-Use Ethereum Wallet, I talk about the 3 factors that lead me to conclude with the wallet that has all three factors ticked- Security, Free-to-use, Ease-of-use.
I also go deep into how to set that mentioned wallet up from ground up, testing its withdrawal and deposit functions, and back up the wallet just in case. I’ve also just added tips to best safeguard your Ethers from theft, hacks and social engineering at the end of the article.
Click here to read the whole article: https://www.theiablog.com/how-to-set-up-the-safest-free-and-easy-to-use-ethereum-wallet/
Towards a richer living!