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.
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 to have possession of 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. While it's 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.
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 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 at the time of this writing.
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.
That's it! Now that you have your ada stored securely in a wallet it's time to stake your ada.
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