Solana is one of the highly functional open source projects in the crypto finance space. In this article, Trading Education explores some of the safest ways to store Solana coins that will help you know the best ways to store Solana Coins in 2022 and beyond.
Solana appeared on cryptocurrency exchanges on 10th April 2020 with a trading price of $0.832.
The cryptocurrency followed the crypto boom in the fall of 2020 to increase its value. This saw SOL open on 1st January 2021 strongly, with a price of $1.51.
After reaching new high highs during the crypto bubbles that lasted from 1st February to the second week of May 2021, a bearish engulfing took over the crypto market.
The native asset of the Solana ecosystem was not done yet as it skyrocketed to a new all-time high price of $260.06 on Saturday, 6th November 2021.
The rise of SOL and other cryptocurrencies in 2021 saw several cybersecurity issues mire the crypto finance space.
Several cryptocurrency exchanges were hacked in 2021.
Therefore, it is only right that you remain vigilant and find the safest ways to store Solana coins.
Trying to find the next golden goose so that they do not miss out on potential gains in the future, beginners/novice traders and investors risk funds without doing thorough research about the numerous areas of the space.
Normally called unsophisticated traders and investors, millions of people do not know their way around blockchain technology in the form of creating, distributing, storing, and trading.
They fail to engage in healthy investment practices. Hackers take advantage of their inexperience and steal large sums of money from them.
It has come to the attention of Trading Education that some of the prominent thefts today happen to traders without any warning signs. Hackers have found an ingenious way of rerouting tokens from one digital wallet to another.
Due to the decentralized nature of the crypto world, hackers continue to take off with millions of dollars every day without any central body holding them accountable for their actions.
These concerns are the primary reasons why several stakeholders of the Solana Project continue to ask questions such as how do you store Solana crypto, which wallet can I store Solana, how do you store Solana in the ledger, and which cold wallet supports Solana? Among others, one of the questions Trading Education will like to help you find answers to is, what are the safest ways to store Solana (SOL) coins?
- Users can lose Solana Coins and other cryptocurrency holdings as a result of theft on cryptocurrency exchanges, failure of personal computers that store the coins, and loss of access keys to digital wallets, among others.
- Cold Storage, normally referred to as Offline Storage, has been cited by experts as one of the safest ways of holding Solana (SOL). This is because coins can be accessed without any internet connection. Despite the safety it presents, millions of digital wallet holders prefer to hold hot wallets because of their convenience of facilitating timely transactions.
- Hardware Wallets are one of the best ways to store Solana. This type of wallet should be patronized for storage by long-term holders of SOL and other cryptocurrencies.
Before the late 1990s, many men kept small personal items such as bank cards, driving licenses, and fiat currency in their physical wallets. This was a culture that began as far back as the 19th century. After the introduction of PayPal in 1999 and other online financial systems, digital wallets started to dominate the idea of holding large sums of fiat currency in physical wallets.
This led to several questions such as which type of wallet (physical or digital) is the best.
In the crypto finance world where everything happens over the internet, digital wallets are the norm. Keeping digital wallets helps you store coins such as Solana (SOL). Digital Wallets can be hardware-based or web-based.
Digital Wallets can be kept in three ways.
The first way of storing SOL coins safely can be done by printing or writing addresses and private keys for access to the coins on a piece of paper.
The second way to store SOL coins securely is to use wallets that can be kept on a personal computer.
Lastly, wallets can also reside on Windows, Android, and iOS-powered smartphones.
Despite the safeness most wallets have demonstrated in the last ten (10) years, many people still doubt they are 100% safe.
This is what has led to the question, how safe are any of these digital wallets?
Digital Wallets that support Solana such as Exodus, TrustWallet, Coin98, SimpleHold, MathWallet, Solong Wallet, Sollet, Atomic Wallet, Ledger Nano S, D’CENT, and Zelcore come with private keys. You have to download these applications on websites or through Apple Store, Windows Shop, or Google Play Store.
After you are done installing the application on your phone, you will be given a chance to set up a password (just like opening an account on a cryptocurrency exchange).
Aside from this password, private keys will be generated for you. These keys are also known as passcodes.
They come in a minimum of 12 words and a maximum of 24 words. What’s more, they are arranged in a particular way.
You would be given time to write the private keys in a safe place. Mind you, you can't take screenshots of the passcodes (no matter the brand of phone you use).
Check Out: What Is Solana? Should You Invest In SOL
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
What Is The Biggest Threat To Solana (SOL) Security?
In the event you lose access to the private keys, you should know that access to your wallet is gone forever.
Several people believed they will never lose their mobile phones so what is the need of storing the private keys well when they are always logged in.
Suppose you lose your mobile phone, the only way to gain access to your wallet is by downloading a new application on the new phone.
You will be required to input your password and private keys. Without the keys, as many people have experienced in the past, you are going to lose your wallet, your SOL, and entire cryptocurrency holdings.
If you store your Solana coins on a personal computer, computer malfunctions from the spread of malware can render your hard drive ineffective. Once this happens, your SOL tokens become useless and inaccessible.
To give you an idea as to the severity of such situations, take into account the numerous Ransomware attacks that continue to engulf the world annually.
According to the International Data Corporation (IDC), approximately, 37% of global organizations said they were the victim of some form of a Ransomware attack in 2021.
In addition to this, there were 2,084 Ransomware complaints from January to July 2021, as per reports by the Federal Bureau of Investigations (FBI). This is a 62% increment year-over-year.
Therefore, if you use an outdated version of any operating system (OS), you should find the latest software to update the systems of all places that hold your SOL tokens.
This is because victims of affected personal computers that fail to meet the needs of hackers normally see their most prized files lost forever.
Let us take a look at some of the best ways to store Solana (SOL) coins safely.
Hot Wallets are digital wallets that can be found online.
Hot Wallets operate on internet-connected devices such as personal computers (desktops and laptops), smartphones, tablets, and pads. Hot Wallets run in the same jurisdiction as malicious programs.
This makes them vulnerable to attacks since hot wallets thrive on the internet to generate private keys as well as help users log in and out of their wallets.
Hot wallets are the primary wallets millions of people prefer to hold Solana and other tokens because they can access centralized exchanges (CEX), decentralized exchanges (DEX), and blockchain technology within seconds.
This makes hot wallets the best wallets that facilitate timely transactions.
Despite the positives, hot wallets lack security.
Millions of people may find the statement “hot wallets lack security” offensive since they have been using them to store their coins safely over a given period.
You should know that the cryptocurrency space is normally focused on positives and not negatives.
It is easy to come across an article such as investing $100 in Solana in January could have resulted in more than $17,000 in November 2021.
It is not easy to find an article about the number of people that have lost thousands of dollars within the same period.
Many people have seen their hard-earned money stolen from wallets and cryptocurrency exchanges.
This is why we continue to tell our readers not to trust so-called experts on social media platforms (Reddit, Telegram, Facebook, and Twitter) that request your wallet addresses so that they can send consistent gains.
One of the benefits of holding a hot wallet can be likened to a checking account.
Checking accounts are also called transactional accounts or demand deposits.
You can hold a small amount in a checking account to help you go about your daily financial transactions.
In linking this to the crypto space, you can hold a small number of SOL in your hot wallet.
This can help you take advantage of news and other events in the space to make gains within a specific time.
This makes hot wallets the best option for small-budget cryptocurrency traders and investors who have less risk to lose huge sums of money.
Hot Wallets comprises mobile wallets, desktop, web, and most cryptocurrency exchange custody wallets.
Having a wallet on a cryptocurrency exchange does not guarantee the safety of your holdings.
As a trader or investor who wants to use a hot wallet, it would be wise for you to get to know the difference between a custodial hot wallet and a non-custodial hot wallet.
When you register for an account on a cryptocurrency exchange that supports SOL such as eToro, Binance, Bitrue, Kraken, Coinbase, OKEx, Huobi Global, and BitMart among others, that account is called a custodial account.
You will always have access to the account through the creation of a password.
Unfortunately, you will never have access to the cryptocurrencies in your portfolio.
Private keys that provide access to the coins are held by representatives of the exchange.
According to a report from an article written by analyst Carla Mozee at Business Insider, the number of cases of cryptocurrency breaches and fraud is on track to break records in 2021.
Overall, there have been 32 major incidents of hacks and fraud for a total value of $2.99 billion, as of August 2021.
This means that you cannot solely rely on cryptocurrency exchanges.
This is because while some are regulated, most of the exchanges that provide high annual percentage yields (APYs) do not prioritize Knowing Your Customer (KYC).
This makes it easy for representatives of such exchanges to take off with the aforementioned sums.
This is the primary reason why safe storage of all cryptocurrency holdings has become an important topic for novice and experienced traders and investors.
Trading Education Advice: It would be unwise for you to hold all your tokens in one hot wallet.
We recommend that you spread your SOL tokens around (independent digital wallets) and wallets from cryptocurrency exchanges.
Although hot wallets continue to face challenges from hackers, it is the most efficient way of executing transactions promptly.
To many, Cold Wallets are the safest option when it comes to the storage of Solana (SOL) and other crypto tokens.
Unlike hot wallets, Cold Wallets are not connected to the internet. This makes it difficult for third parties to break into them.
Across crypto circles, they are also known as Offline Wallets or Hardware Wallets.
Address of users and their passcodes (private keys) are stored on programs that run without the internet.
Users can access their portfolios in real-time without their private keys being at risk since they have been cut off in the world where malicious programs operate.
Paper Wallet is one of the essential ways of storing Solana.
Paper Wallets are printed pieces of paper that contain QR codes and keys used to facilitate cryptocurrency transactions.
Because of the security it provides users, at a point in time, many experts believed paper wallets were the best way to store cryptocurrencies.
Always remember that the paper is only relevant when there is a blockchain it can access.
USB Drive Device is one of the safest ways to store coins. You can use a USB to store private keys. USB is a hardware wallet.
One of the benefits of USB is that it is free from all forms of malware or viruses since it is not connected to the internet.
In the case of a Ransomware attack where the USB Drive Device has been connected to a particular personal computer, suppose there is a security breach, the USB device will not be affected.
The safety of pen drives (USB) can only be judged by how the person in charge of the device uses them.
When it comes to finding the most secure way to store your Solana (SOL) Coins and other tokens, cold wallets are better than hot wallets.
Get to know everything about a wallet before you store your coins on them.
Read Also: Solana Price Predictions
Other Security Precautions
This is relevant because it helps you recover your prized files.
Some of the reasons why you should back up your files include but are not limited to data loss prevention, archiving, and peace of mind. Having a history of backups is one of the best ways to recover your cryptocurrency holdings periodically.
From our research, you should do all you can to back up and store all Wallet.dat files on hard drives, USB drives, and compact discs (CDs).
Editor’s Note: There are prying eyes all over the internet trying to zoom into all your files. Therefore, set strong passwords in the form of words, numbers, and symbols on all your backed-up files.
Since many people prefer to hold wallets on their personal computer and Ransomware normally cripples operating systems (OS) that run on such devices, you should always have the most updated OS on your computer.
Computer users, Solana traders and investors, and crypto investors for that matter that have had modern OS across time have not fallen victim to the demands of hackers.
Although modern software wallets offer huge security against breaches that increase the safety of your SOL tokens, you should not settle for free antivirus packages.
Invest in anti-virus packages the same way you invest in SOL and other cryptocurrencies.
Because of security breaches, Google has announced multi-signature authentication for all its users.
This means that this is a feature you should prioritize.
Multi-Signature Authentication is a method that grants a person access to an account after they have presented more than one way of restoring the account.
A great example can be attributed to logging into an account.
You are asked to input a password.
After that, another screen pops up asking you a question such as what is your favourite basketball team or what is your favourite food? In addition to this, some accounts ask you to provide another pin code that can be generated for you by representatives of the wallet provider which can be revised by you.
Do not take your eyes off this extra layer of security.
In the long term, it will protect your account from all forms of hacks. This will in turn keep all your crypto tokens including SOL safe.
eToro – The Best Platform To Buy Solana
eToro have proven themselves trustworthy within the Crypto industry over many years – we recommend you try them out.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.