The future of money has arrived. Digital assets like cryptocurrency coins, decentralized finance applications and NFTs are changing rapidly, so it begs the question — how are we protecting what’s valuable? As demand for crypto grows so do concerns on how to store it, trade it, grow it and most importantly, how to keep it secure.
Users transact with an online exchange to get started, but using online exchanges to hold your assets has its drawbacks, just like other online sites. There’s a hacker attack somewhere in the world every 39 seconds. Attacks are so prevalent now that the Treasury Department announced that more than a quarter of all ransom related activity online occurred in the first half of 2021 compared to the entire previous decade. While ransomware and hacks aren’t a new problem, modern problems need modern solutions. That’s where Ledger’s hardware wallet system, app and website all come into play.
One of the best methods of protecting your digital assets is to use a hardware wallet, which is a piece of hardware that functions as a private encrypted key to access your assets, instead of directly on an exchange. Having control of this encrypted key gives you access to your coins and tokens on the blockchain, which works as a ledger system, annotating transactions in the order in which they’re verified. Without a hardware wallet, your assets are susceptible to nefarious online activity and would-be hackers. Owning a hardware wallet translates to having access to the assets in your wallet.
As the world transitions more of its data and assets online, ransomware, malware and hacking are top of mind, so what happens if an online exchange is hacked and goes bankrupt? In 2014 a large bitcoin exchange went bankrupt after hackers stole approximately $460 million from its coffers, prompting an investigation and backlash from the crypto world at large. Unfortunately many of these customers weren’t able to retrieve their assets after the company filed for bankruptcy, because the exchange acted as custodian of these assets. Owning a private key grants you full custody of your assets and would have safeguarded those investors from an exchange going belly up. Is it any wonder then that securing your digital assets should be supported by a tangible tool like a Ledger wallet?
Currency evolved to facilitate commerce throughout history, so gone are the days when merchants traded satchels of whale teeth, cocoa beans, salt, squirrel pellets or actual livestock to do business. The invention of metal coins and paper money simplified transactions for merchants on trade routes, expanding commerce across the globe.
The world of crypto is expanding everyday, from new coins and new exchanges, to DeFi applications and smart contracts. Users could benefit from a one stop shop platform, supported by a hardware wallet and interface, like Ledger’s Live app. New tools like these can help to keep pace with the evolution of how we trade, buy, sell, and grow our digital money.
Financial literacy makes for better investors, so education on crypto can help users map out the transition from hard currency and traditional banking towards digital assets supported on the blockchain. Knowing what to expect makes this journey a little more seamless, and a lot less scary.
While digital asset management sounds futuristic, it’s exactly where we find ourselves. All of this might be overwhelming for novice crypto investors, but hardware wallets provide some coverage, while financial literacy can help with the rest. Ledger’s website offers up a lot of educational content, so it’s a good place to familiarize yourself with how the future of money isn’t some distant ways away, it’s already right here and right now.
Disclaimer: Exchange, lend, and other crypto transaction services are provided by third-party partners. Ledger provides no advice or recommendations on use of these third-party services.