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Why a Cryptocurrency Wallet is Essential to Financial Sovereignty

By Marco Wutzer July 19, 2022 Facebook Logo Twitter Logo Email Logo LinkedIn Logo

 

I’ve been spreading the word for widespread adoption of Cryptocurrencies since I bought my first bitcoin (BTC) over a decade ago.

The first step to trading and protecting your cryptocurrencies is setting up the right cryptocurrency wallet. I’ll expand on that shortly, but first let me explain why I’m so passionate about spreading awareness about cryptos.

It wasn’t because of the wealth I obtained from trading crypto, that came later. 

In fact, the financial freedom that cryptocurrency presented was just one part of a larger idea that truly attracted me to it. 

I saw an opportunity. I saw the future. And most importantly, I saw true sovereignty. 

I have accumulated enough wealth to travel and live my life any way I choose. But I have found more than that, and I want to create that opportunity for everyone. 

Imagine a world where financial sovereignty is a possibility across the globe. A world where individuals in countries with failing currencies have a chance to live a life of opportunity instead of despair. 

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Moreso, imagine a world where money isn’t controlled by any centralized powers that be. A world of true sovereignty where complete freedom from governments and institutions isn’t a financial privilege but a human right. 

That is the future I see with widespread crypto adoption.

I understand that cryptocurrencies are still very new. Things like “crypto wallets” are still hard for many folks to understand. So with that in mind, I want to help you through the process of understanding how they work and how you can set one up for yourself. 

I believe the first step in becoming financially sovereign is to set up a crypto wallet. If you value your future, then you need to take care of the assets you have by keeping them safe. 

Let’s dive into what a crypto wallet is and why it’s so important to your financial sovereignty. 

What is a ‘Crypto Wallet?’

Simply put, a crypto wallet is an application that functions as a wallet for your crypto. 

Have you heard the story about the San Francisco man who owned $300 million worth of Bitcoin, but was unable to access it? It went viral when the man had two more guesses at his password before losing his fortune for good. 

Let me explain how you can avoid such a situation. 

You can’t take your Ethereum or Bitcoin, fold it up, and put it in your wallet. Nor can you empty your coins into a piggy bank for safe keeping. 

In the same way you need a wallet and bank account to protect your cash and credit cards, you need a safe, accessible place to store your cryptocurrency. 

When you buy cryptocurrency, you control it with a wallet. The wallet has a private key, like a password, that allows you to access it. The key is a long string of letters and numbers that are assigned to your wallet. 

There are a few different types of wallets to store your crypto. 

Different Kinds of Crypto Wallets

The easiest way is to store it directly on the exchange where you bought it. Crypto exchanges like CoinBase or Kraken allow you to buy, sell, and transfer your crypto right on their platform. However, this is a terrible way to store your crypto. 

That’s because these exchanges hold on to your private key, so you don’t have access to it. That means you really need to trust the exchange you’re using, same as you would trust a bank or any online company with your data. 

Even Elon Musk warned crypto holders against using exchanges’ wallets specifically because they withhold the password from you. That’s because you’re trusting your private key with a third party. And that’s the opposite of sovereignty.

So I agree with Mr. Musk. In order to achieve sovereignty, you need to avoid being dependent on any third party company. Third parties can freeze your funds for any reason or no reason at all and there is little you can do about it. There is an alternative. 

For more control, you should always manage your coins yourself. However with only a software wallet, you are still at risk of getting hacked and losing your coins if your computer is connected to the internet. 

The most secure way to keep your crypto safe is with a hardware wallet.

Why a “Cold Wallet” Is Your Best Option

A cold wallet means your private keys are stored on a device, like a separate hard drive or thumb drive, that is not connected to the internet. 

Companies like Trezor and Ledger design these specialized devices specifically for crypto wallets. There are extra protections built into the software of these drives that keep sensitive information from being exposed, even when it’s plugged into a computer. 

These devices are also programmed with backup methods to recover coins if a password is forgotten, or the original device is lost.

Setting up a cold wallet to store your crypto is the first step to financial sovereignty. 

It’s the first step to taking full control of your crypto and it’s fully encrypted. 

In the unfortunate case you forget your password, there are secured solutions to recover it. 

You’d hate to be the individual with an inaccessible fortune, like that Bitcoin holder from San Francisco. 

I’m a believer in cryptos that have real long-term value. That’s why I believe a cold wallet, or a ‘hardware wallet’ is the optimal way to safely store your crypto. 

Technically, you don’t need a crypto wallet. But if you value your crypto investment, not keeping your holdings in a wallet is a huge mistake. 

As promised, I will hold your hand through this process. Crypto is still so new, and understandably confusing for a lot of people. 

Come back next week as I explain how to find the right crypto wallet for you, and how to set it up. 

I put a lot of weight on longevity because I believe widespread adoption is inevitable. It might sound crazy to you, but I assure you it’s coming. 

The Blockchain Ecosystem is a work in progress, but there will be a snowball effect, and you won’t want your back turned to the mountain when it’s too late. 

To sovereignty and serenity,

Marco Wutzer

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