ASK VIV

Q.	Where should I store my crypto?

The question

Hi, and welcome to Ask Viv, where I answer your crypto questions simply and honestly. Today's question is: where should I store my crypto?

Buying is only half of it

If you're new to crypto, this is one of the most important questions you can ask, because buying cryptocurrency is only half of the equation. The other half is understanding how you're going to protect it.

With traditional money, most of us are used to putting our money into a bank account and letting the bank take care of the security. With crypto, there are different ways of holding your assets, and each one involves a different balance between convenience, control, and responsibility.

So let's break down the options.

What a wallet actually gives you

First, there's an important misconception to clear up. When you store Bitcoin or another cryptocurrency, you're not really putting digital coins into a wallet in the way you might put cash into a physical wallet. The blockchain records ownership. What your wallet really gives you is control over the private keys that allow you to access and move those assets.

This is where the phrase “not your keys, not your crypto” comes from. If another company controls the private keys, you are relying on that company to safeguard your assets and give you access to them. If you control the keys yourself, you have greater control, but you also take on much more responsibility.

That distinction is fundamental to understanding crypto custody.

Option one: leaving it on the exchange

The simplest option for many beginners is to leave crypto on the exchange where they bought it. This is convenient. You can log in, see your balance, buy more, sell, trade, and potentially move money in and out relatively easily. For someone who is just learning, that simplicity can be useful.

But there is a trade-off. If the exchange is holding the assets on your behalf, you're taking counterparty and platform risk. You're relying on the exchange's security, operational controls, financial position, and ability to give you access to your assets.

That doesn't automatically mean exchanges are unsafe. It means you need to understand who you're trusting. I think that's an important principle in crypto. Convenience usually comes with some degree of reliance on somebody else.

Option two: a software wallet

The next option is a software wallet. This could be an application on your phone or computer that allows you to control your own private keys. This is called self-custody.

The big advantage is control. You're no longer relying on an exchange to hold your assets for you.

But there is a very important trade-off. You become responsible for security. Your recovery phrase or your private keys are extremely important. If someone obtains it, they may be able to access your assets. If you lose the information needed to recover your wallet, there may be no customer service department that can simply reset your password and restore access. That's very different from traditional banking.

So self-custody can remove one type of risk while introducing another. You reduce your dependence on a third party but increase your personal responsibility.

Option three: a hardware wallet

Then we have hardware wallets. A hardware wallet is a dedicated physical device designed to help keep your private keys protected while allowing you to interact with crypto. For someone holding assets over the longer term, this can be an attractive option because the keys are kept in a device specifically designed for that purpose rather than being routinely exposed to an internet-connected computer or phone.

But again, it's not a magic solution. You still need to think about your recovery phrase. You need to protect the device. You need to be careful about phishing scams and fake websites. You need to verify what you're actually approving when you make a transaction.

In other words, a hardware wallet can improve your security but it doesn't remove the need for good security practices.

The recovery phrase

If there's one part of crypto security I would really emphasize, it's your recovery phrase. This is sometimes a series of words that can be used to restore access to a wallet.

Treat it like the keys to your financial assets. Don't casually put it into a website. Don't send it to somebody who messaged you claiming to be customer support. Don't store it in an ordinary note on your phone. Be extremely suspicious of anyone asking you to reveal it.

A legitimate support person should not need your recovery phrase to secure your wallet. If someone gets it, they may well be able to gain control of your assets.

So where should you actually store it?

So, where should you actually store your crypto? There isn't one answer.

It depends on what you're holding, how much you're holding, how long you're holding it, how frequently you need access, and how comfortable you are managing security yourself.

For someone actively trading, keeping some assets on an exchange may be practical. For someone holding crypto for the long term, self-custody may be worth considering. For a large portfolio, some people may also consider professional or institutional custody solutions.

You don't necessarily have to choose just one. Your approach can evolve as your holdings, experience, and needs change.

The question behind the question

So, who do you trust?

Ultimately, I think the question isn't simply, “where should I store my crypto?” It's, “who am I trusting to protect access to my assets?” If it's an exchange, you're trusting the exchange. If it's a custodian, you're trusting the custodian. And if it's you, you're trusting yourself and taking responsibility for getting the security right.

Every option has trade-offs.

So, before you buy crypto, don't just think about the price. Think about custody. Understand who controls the keys. Understand what happens if you lose access. Understand what happens if someone gets your recovery phrase. And, of course, understand the difference between convenience and control.

Because in crypto, owning the asset is only part of the responsibility. You also need to understand how you're going to protect it.

Closing

With that, remember, if you've got a cryptocurrency question you'd like me to answer, I'd love to hear it. Thanks for watching, and I'll see you in the next Ask Viv.

Not your keys, not your crypto. The phrase is doing real work. If another company controls the private keys, you are relying on that company to safeguard your assets and to give you access to them. If you control the keys yourself, you have greater control and you also take on much more responsibility. Viv treats that trade as the thing to understand before picking any option.

He spends the longest stretch of the episode on the recovery phrase, and the rule he keeps returning to is that no legitimate support person ever needs it.