When you initially get into crypto and acquire your first bit of Bitcoin, chances are that someone will tell you to store it immediately on your own hardware wallet. Because your cryptocurrency isn’t safe on exchanges, which is generally true, and software wallets are only as safe as your device.
It hit me like a ton of bricks. I wasn’t aware of it until later when a friend explained it to me.
And it is quite simple, so let’s get started!
What is a Hardware Wallet, and Why Should you get yourself one?
When working with blockchains, hardware wallets provide security and utility. Exchanges can be a target of hacker attacks, and software wallets are only as secure as your device.
Because a Hardware Wallet is not connected to the internet, hackers will not be able to access the cryptocurrency you keep in it. Well, your private crypto keys and, with it, your crypto. This is the most important thing about hardware wallets. That’s why people get them. Because otherwise, if you store cryptocurrencies on “hot” wallets and become the target of a fraud or hacker attack, there is not much chance of getting your cryptocurrencies back.
A hardware wallet can connect to many different blockchains at the same time. This allows you to handle Bitcoin as well as countless numbers of Altcoins, for instance, Ethereum, Cardano, Solana, and other cryptocurrencies, on the same device. All backed up easily with a single 12 words secret recovery phrase.
And there are many other benefits of having a Hardware Wallet. It is a small plug-in device, so it is really convenient and portable. Also, nowadays, there are already crypto exchanges that support trading through hardware wallets, so you can safely trade directly from it. You just need to plug it into your computer. Well, not that safely; it is not advised to ever connect your Hardware wallet to the internet. But you got options.
Different types of Hardware crypto Wallets
One option, and the most common, is dedicated hardware wallets. A small, portable device that looks like a USB drive that allows you to bring your crypto with you wherever you go. These devices are usually not the cheapest and come with a price tag of around $90. For example, one of the most widely used Ledger Hardware wallets can be bought for around $70.
Paper wallets are the second safe option to go with. They can be less convenient because they are exactly what they sound like. A hard paper containing your public and private key pair for making crypto transactions.
A Paper crypto wallet is usually created with a key generator program and printed on that piece of paper.
Another option is, of course, your own DIY USB crypto wallet. You can use any USB flash drive and turn it into your own hardware crypto wallet – to store your crypto on USB. For that reason, they are the most convenient and cost-effective solution to store cryptocurrency.
Now it’s time to create our own DIY USB crypto wallet!
How to turn a USB drive into a crypto wallet
Many people don’t know about this. Turning a USB drive into a crypto wallet is not hard, it only takes a few steps and a few minutes of your time. You can be done in 10 minutes. All you need is a computer, and nearly any USB drive can store crypto. So let’s get started!
1. Grab a USB drive that you want to turn into a crypto wallet
You shouldn’t be choosing the cheapest option. Choose a USB that comes with encryption of your data to provide extra security against malicious hackers. Such USB drives usually come with a higher price tag. But do not worry! To keep costs as low as possible, you can download USB encryption software that will do the job, as well as drives with encryption from the manufacturer. Consider VeraCrypt or BitLocker, a tool from Microsoft that is already pre-installed in your Windows OS.
2. Download the crypto wallet of your choice to your computer.
Choose a crypto wallet of your choice with cold storage feature. That is a wallet that can work without internet access.
You can go with Coinomi Wallet or Electrum Wallet. Coinomi may be a better choice, as it comes with a more pleasant user interface and ease of use. However, you have the last say. You can choose any wallet you would like.
This is important! To stay safe, download the software installer to your computer. And proceed to the next step. Do not install anything right now.
3. Disconnect your computer from the internet
The purpose of hardware wallets is greater user security. This would be pointless if you were handling your cryptocurrencies connected to the internet. Unplug the Ethernet cable or turn off your WiFi before plugging in your USB drive. And make sure you do it every time. Only connect your USB crypto wallet when the internet is turned off.
4. Install the wallet software on the USB drive
This is the crucial step in making a USB crypto wallet. Connect your USB drive back while disconnected from the internet, and run the installation process. When the software asks where to install the program, select your USB drive.
After the installation is completed, launch the program while still disconnected from the internet, and set up the wallet. This will continue as the traditional process of creating any other wallet. You’ll create a password that you’ll use to access your wallet. In addition, a seed phrase will be generated for you. Make sure to securely store these details.
5. Use the safe eject feature to remove your USB drive from the computer
People usually do not do this. Me including. However, the data can be damaged if not ejected safely. Since your crypto belongings are on the USB, it is better to take the time and do it properly.
And your DIY USB crypto wallet is set to go!
Turning a USB drive into a crypto wallet is not a hard process. It can be done in a few minutes of your time. This is a simple and secure method for storing cryptocurrency. A particularly affordable alternative for new crypto holders who wish to be more secure than on exchanges or hot wallets but don’t want to spend on cold storage wallets like Trezor or Ledger just yet.
To stay safe with your DIY USB crypto wallet, always turn off your internet before connecting it to the Computer! Also, do not forget to use the safe eject feature to remove your USB drive from the computer.
But using a DIY crypto wallet is not the only excellent way to use your USB drive. You can also use it to store an encrypted copy of your seed phrase.