With cryptocurrencies and NFTs making up an increasingly larger proportion of investment portfolios, keeping your assets safe is more important than ever. Making sure only you have access to your NFTs means they remain safe while appreciating in value. With cyber threats, scams, and hackers regularly attempting to part investors with their assets, many choose hardware and cold storage solutions, keeping their digital investments safely offline.
One of the most secure ways to keep your NFTs safe is to store them on a USB stick. Here, we’ll discuss the reasoning behind this and how to go about doing it yourself.
Whether you’re hodling crypto or NFTs, you need a wallet. Just like you need a wallet for your cash and credit cards, crypto needs to be stored somewhere too. These wallets come in two varieties, “hot” wallets and “cold.”
Hot wallets are at least intermittently connected to the internet, allowing easy access and the ability to move crypto or NFTs in and out relatively easily. These can be web-based, mobile apps, or desktop software and are used to facilitate purchasing from crypto exchanges and NFT marketplaces. Some of the biggest hot wallets include Coinbase Wallet, MetaMask, and Exodus.
Crypto-wallets involve both a public and a private key. A public key is essentially an address that can be freely shared so others can send and receive crypto. The private key, however, is the secret code necessary to sign off on transactions. Just as you’d need to enter your pin number to retrieve money from an ATM, you can’t send an NFT, for example, without your private key.
While hot wallets make the sending of digital assets easier, they are not the most secure method of storage. The oft-touted phrase, “not your keys, not your coins,” refers to the fact that with hot wallets, the private key is not truly “owned” by you. Should a wallet or exchange get hacked, you may lose assets or even access to your whole wallet.
For this reason, many choose to store their most valuable NFTs in a cold wallet, keeping the keys offline. These can take many forms, including USB sticks. Other forms include etching the private key into metal, or writing it on a piece of paper, and securing it away somewhere safe like a security deposit box.
The idea is that by keeping your wallet disconnected from the internet, your crypto or NFTs are a lot safer. By keeping the main bulk of your crypto portfolio on a USB stick, for example, you are ensuring you do not lose valuable NFTs to hacks and scams. Stealing from a cold storage wallet would involve obtaining the physical possession of the hardware.
The simplest cold wallet method of storage for your NFTs is to transfer your private keys to a USB stick and keep that safe.
With most NFTs existing on the Ethereum blockchain, you’ll first need to create an Ethereum paper wallet. Paper wallets are a lot more secure than they sound and are essentially just a list of phrases that you need to sign off on transactions. Without these secret words, any would-be infiltrators can’t get hold of your NFTs or coin. Paper wallets can be stored in a security deposit box, under your floorboards, in your physical wallet, around your neck in a locket, or, as we are choosing to do, on a USB memory device.
The process of creating a paper wallet is fairly straightforward:
- Visit MyEtherWallet.
- Click “Create a new wallet.”
- Choose “Software.”
- Select “Keystore File.”
- Create a 15+ character password with a combination of letters, numbers, and symbols (do not forget this or you risk losing access to your wallet.)
- Download the keystore file when prompted.
At this point, you’ll have generated a paper Ethereum wallet that can be printed, capable of holding ETH and NFTs. This paper wallet can be stored as a JSON file that contains your public address and your private. This can be encrypted using Zip compression or, for a yet more secure option, try VeraCrypt.
Checking the contents of your wallet is easy. Simply visit EtherChain.org, click the search icon, and enter your public address. This is safe and won’t compromise your account.
Sending and retrieving NFTs from your wallet involves visiting MyEtherWallet and clicking “Send Transaction.” You will then need to be asked to upload the JSON file or enter the private key.
Another option is to use a dedicated USB device for storing crypto, known as a hardware wallet. These USB devices typically run anywhere from $50 to $200 and are designed specifically for the task at hand. Unlike a paper wallet, these do involve a connection to the internet. However, due to the highly secure encryption built-in, your private keys are never exposed.
One of the most popular hardware wallets is the Ledger Nano which connects to trusted third-party “hot” wallets like MetaMask but keeps the private key on your hardware. This means you can purchase and send from marketplaces like OpenSea and Rarible as normal. The difference is MetaMask will communicate with your Ledger device to authorize the transaction instead.
Hardware wallets like the range offered by Ledger are seen as a more convenient solution than storing a paper wallet on a USB stick. It doesn’t slow down the authorization of transactions and means familiar software wallets like MetaMask can continue to be used more securely.
Using MetaMask as an example, connecting a hardware USB wallet is easy:
- Connect your USB hardware wallet to your computer using a USB cable.
- Open MetaMask in your browser.
- Open the main menu and select “Connect Hardware Wallet.”
- Select your brand of hardware wallet (e.g., Ledger) and click continue.
- Connect your hardware wallet account to MetaMask (e.g., Ledger Live.)
- On your hardware wallet, select settings and turn on contract data.
- In MetaMask, go to settings > advanced settings and select “use with Ledger Live” or whichever hardware account you wish.
Whatever USB cold storage method you choose is more secure than entrusting a software “hot” wallet with your valuable NFTs. By always ensuring you keep your private key safe, your most valuable NFT investments can grow in value securely offline.