Securing Your Ada

If you own ada and keep it in an exchange such as Coinbase or Binance, did you know that it is only as secure as the exchange  itself? Major exchanges have been attacked in the past and cryptocurrency has been stolen from people's accounts. With cryptocurrency being decentralized, there is no bank or insurance if you lose what you own. Luckily, there are ways that cryptocurrency can be stored securely and the risk of it being stolen greatly reduced.

Software Wallets

The first of these is called a software wallet. The reason a software wallet is more secure is because you are given a recovery passphrase or mnemonic when setting up the wallet. This phrase is needed to add the wallet on a new device or recover your assets in the case that the device with the software wallet is destroyed or lost. In order for your cryptocurrency to be stolen an attacker will either need access to your device or possess the recovery passphrase. For this reason, we recommend keeping a physical copy of your mnemonic and never storing it digitally. Ideally, it will be locked away in a fire safe. It's not just important to keep this a secret from others; it's just as important to never lose it or for it to be destroyed.  

For Cardano, the main two options are Yoroi and Daedalus. We recommend Yoroi for beginners since it takes the least amount of effort to set up and can be used on your phone. 

Hardware Wallets

The second option is a hardware wallet. This is a physical device that a wallet can be set up on. Just like with the software wallet, you'll be given a recovery passphrase during the setup. There are a couple key reasons that a hardware wallet is more secure:
 

  • The recovery passphrase is unique to the device and not generated on a device like a phone or computer that could potentially be compromised. This gives extra assurance that the mnemonic will only be available to the owner in a physical form and locked away in a safe.

  • Every time you want to send the ada in your wallet to another wallet, you have to confirm the transaction on the hardware wallet. 

The two main options for hardware wallets are Ledger and Trezor. We recommend the Ledger Nano X over the Nano S simply because it has bluetooth and can be used with your phone. As for Trezor, Cardano is only available on the Trezor Model T. 

Transferring Your Ada

Once you have your wallet set up, you'll need to send the ada stored in the exchange to the wallet. In order to ensure that we are providing up-to-date information, we'll link to instructions for Coinbase, Binance, Yoroi and Daedalus. If you have a hardware wallet they will provide you with current documentation.

Summary

That's it! You now have your ada stored securely in a wallet. Now you are ready to stake your ada.