Trading on cryptocurrency exchanges like BetPro can be extremely profitable, but also comes with risks. As the saying goes: “not your keys, not your coins.” When you leave funds on an exchange, you are trusting them to keep your assets safe. However, exchanges can be and have been hacked. By taking self-custody of your cryptocurrency, you eliminate counterparty risk and take control of your financial sovereignty.
What is Self-Custody?
Self-custody refers to taking direct control of your cryptocurrency private keys. Private keys allow you to sign transactions on the blockchain network. When you use a cryptocurrency exchange like BetPro, they generate and control the private keys to your account. However, by taking self-custody you can generate and securely store private keys yourself. This gives you exclusive access and control over your funds.
Benefits of Self-Custody
There are several key benefits to holding your own private keys:
Eliminates Counterparty Risk
Exchanges like BetPro can get hacked, go bankrupt, or engage in fraud. Self-custody removes dependence on any third party to keep your assets safe. You alone control the private keys.
Enhances Financial Sovereignty
By controlling your private keys, you have complete autonomy over your cryptocurrency. You can send, receive, trade, and interact with decentralized applications without limitation.
Allows Participation in Advanced Features
Self-custody allows you to access advanced network features like staking, governance rights, airdrops, decentralized finance apps, and more. Relying solely on an exchange limits what you can do.
Future-Proofs Your Assets
Cryptocurrency is still in its infancy. Over the long run, self-custody ensures continued access to your assets no matter how the technology evolves.
Self-Custody Security Best Practices
While self-custody gives you independence and control, it also transfers responsibility for security to you. If you lose access to your private keys through negligence, no one can retrieve your funds. You are the sole gatekeeper. Follow these essential tips:
1. Hardware Wallet Storage
Storing keys digitally on your computer or phone leaves them vulnerable to hackers. Instead, use a hardware wallet – a dedicated secure device for keeping private keys offline. Leading options include Trezor and Ledger.
2. Carefully Guard Seed Phrase
Hardware wallets provide a generated 12-24 word “seed phrase” at setup. This seed allows restoration of keys if your hardware wallet is lost or damaged. Guard your seed phrase with extreme secrecy. Do not digitize, take photos of, or share it ANYONE under ANY circumstances.
3. Multiple Geographical Backup Locations
To protect against fire, flood, or other disasters, keep multiple physical copies of your seed phrase stored in different secure geographical locations. Use durable, waterproof, and fireproof materials. Do not store multiple backups in the same location.
4. Encryption, Sharding
When making physical backups, strongly consider encrypting your seed phrase and sharding it into multiple pieces. For example, divide your seed into thirds, encrypt each third with a separate password, and store each third in different locations. This enhances security through obscurity.
5. Carefully Vet Applications
Be extremely cautious when approving applications to connect with your hardware wallet like browser plugins. Only use official apps from verified providers like Trezor and Ledger to mitigate risk of installing malware.
6. Transactions: Use VPN, Beware Phishing
Only make transactions when connected through a secured VPN connection to prevent exposing IP address. Carefully double check recipient addresses character-by-character on device screen before approving to avoid sophisticated phishing attempts.
7. Keep Devices Updated
Maintain devices with latest firmware and security patches to reduce vulnerable attack surface area. Sign up for product security update notifications.
8. Develop Robust Recovery Plan
Despite best efforts, hardware wallets can still fail or seed phrases can be lost. Have a contingency plan for recovery seed access or wallet replacement if needed.
9. Further Hardening: Multisig
For advanced users with large holdings, consider multi-signature (“multisig”) wallet structures. Multisig requires approval from multiple private keys to execute transactions. This enhances security through redundancy.
Adhering to these bitcoin and cryptocurrency security best practices requires diligence – but gives peace of mind over directly controlling assets.
Self-Custody Options for BetPro Users
BetPro traders have several excellent options for taking self-custody:
Ledger Hardware Wallets
The Ledger Nano S and Nano X support nearly every cryptocurrency on BetPro. Ledger provides an intuitive interface, battle-tested security, Bluetooth connectivity (Nano X), and integration with the BetPro desktop and mobile apps to track balances.
Trezor Hardware Wallets
Similar to Ledger, Trezor hardware wallets pioneered Bitcoin self custody and delivers an easy user experience with top-tier security. The Model T has a touchscreen and supports a wide array of cryptocurrencies.
BetPro Vault
For convenient but secure on-platform storage, traders can utilize BetPro’s proprietary Vault account feature. Vaults provide isolated wallets with delayed withdrawals, address whitelisting, and other protections. However they still represent custody by BetPro rather than independently controlled private keys.
Other Options: Exodus, Coinbase Vault, etc.
Many cryptocurrency software, exchange, and standalone hardware wallets beyond Trezor and Ledger also facilitate securely managing your own keys. Depending on holdings and technical needs, solutions like Exodus, Coinbase Vault, BitBox, or Cobo Vault may also suit BetPro traders.
The best self-custody solution depends on individual circumstances and risk tolerance. But controlling your own keys beats leaving assets on an exchange.
Getting Started: Step-by-Step Guide to Self-Custody
For BetPro users ready to take the self-custody leap, here is a step-by-step guide:
1. Purchase Hardware Wallet
Acquire a hardware wallet like a Ledger or Trezor device. Purchase directly from the manufacturer’s official website. Beware fake third party listings.
2. Initial Setup & Securing Seed
Follow device prompts to set up your new hardware wallet. Carefully safeguard the generated seed phrase per best practices recommendations.
3. Fund Wallet Address
Locate the “Receive” or “Deposit” address for the cryptocurrency you wish to transfer. Send funds from your BetPro account to this address. Confirm transaction is processed and received to hardware wallet public address.
4. Download BetPro Wallet App
Ledger and Trezor integrate directly with BetPro’s desktop and mobile applications. Download the compatible BetPro Wallet app for your hardware wallet.
5. Connect Wallet & Access Balances
Pair your hardware wallet to the BetPro Wallet app. You can now securely view balances and transaction histories for self-custodied holdings via your hardware device.
6. Execute Trades
When logged into BetPro exchange, toggle the funds source to utilize balances available through your connected hardware wallet. You can trade directly from secure self-custodied holdings.
With those steps complete, you are now trading on BetPro while personally controlling your cryptocurrency secured by a hardware wallet! Practice good security habits and you can comfortably operate while drastically reducing risk compared to keeping large sums on any exchange.
Self-Custody Conclusion
Self-custody boils down to exclusively controlling your cryptocurrency private keys. By transferring funds to a hardware wallet instead of leaving them on BetPro or other exchanges, you eliminate counterparty risk and take control of your financial sovereignty.
While self-custody is empowering, it also transfers security responsibility entirely to you as sole gatekeeper of your holdings. But by rigorously applying the best practices outlined above, BetPro traders can reap expanded utility of their assets while still sleeping soundly at night. As crypto adoption continues accelerating, self-custody represents the logical next step for seasoned traders.
Frequently Asked Questions
Should I keep my cryptocurrency on an exchange or self-custody?
In general, use exchanges for what they are good for – convenient trading and account services – while self-custody is preferable for long term storage of larger holdings. Every trader’s approach differs based on individual risk tolerance.
Can I lose my cryptocurrency if my hardware wallet is lost or stolen?
No, your digital assets reside on the blockchain network – not the hardware device itself. As long as you have your recovery seed phrase safely stored, you can always regain access even if physical device is lost or damaged.
What happens to my cryptocurrency if I die without sharing my seed phrase?
Unfortunately, without passing on seed phrase access to next of kin or other entity, your digital assets may be permanently irretrievable if sole controller becomes deceased. Plan accordingly.
How technical do I need to be to self-custody cryptocurrency?
Due to well-designed user experiences offered by leading hardware wallet makers like Ledger and Trezor, self-custody can successfully be accomplished even by non technical users today as long as security best practices are followed.
If I’m careful with security, is self-custody 100% foolproof?
No security solution can ever be made completely impervious to risk – but self-custody backed by hardware wallets represents the strongest assurance currently available outside of pure cold storage. As long as best practices are rigorously followed, risk is tremendously reduced compared to exchange reliance.