Part of Invity's Crypto FAQ series
Whether you're a complete newcomer to the crypto ecosystem or an experienced trader, one of the first things you'll likely want to do after purchasing crypto from an exchange is make sure that your coins never get stolen. The best way to go about doing this is to store your coins in what's known as a hardware wallet. This guide will explain how you can immediately withdraw bitcoin to your secure offline storage device and emphasize why doing so is a good idea.
Why should you store your own crypto in a hardware wallet?
First things first: why should you even bother with storing your bitcoin or other crypto in a hardware wallet? When you purchase coins from a custodial cryptocurrency exchange your assets are held in an online wallet whose keys are controlled by the exchange itself.
While there are many well-intentioned custodial crypto exchanges out there, the prevalence of security breaches and scams over the last decade has made the broader community rightfully skeptical of letting other people hold onto their assets for them. Buying crypto and keeping it on a custodial exchange is akin to taking out money from an ATM and leaving it in someone else's wallet for "safe-keeping."
As a result, you may have heard the saying "not your keys, not your coins", which refers to the fact that if your private key and thus your wallet aren't yours and yours alone, you're actually not the one in control of your funds.
How do I set up my hardware wallet?
Once you've made the decision to take direct ownership of your own crypto, you'll need to figure out where you're actually going to be storing your coins. You actually have two main options: a software wallet or a hardware wallet. Both of these contain crucial information about your crypto like your private key, but importantly, hardware wallets are physical storage devices that are only connected to the internet when you want them to be.
We've published an extensive guide in the past about choosing the right wallet for your bitcoin storage needs. One of the most popular hardware wallet options in the world today is Trezor. Their devices are simple to set up, mitigate the risk of user error, and are extremely secure.
Withdrawing your crypto from a custodial exchange
While the specific steps involved in taking your bitcoin or other crypto out of a custodial exchange will depend on the platform itself, it's generally just a matter of sending crypto from the online wallet address that the exchange provides you to the address that corresponds with your hardware wallet.
Many custodial exchanges simplify this process by having an easy-to-find "withdraw" button somewhere on their website. After locating this option, you'll just need to fill in your hardware wallet's details and specify that you're making the withdrawal in the form of BTC.
It's crucial that you confirm that the wallet address you're sending your withdrawn bitcoin to matches the address of your hardware device. Sending crypto to the wrong address could mean losing your coins.
What if I purchase BTC or other crypto from a non-custodial exchange?
Non-custodial exchanges do not store your crypto for you, which is what separates them from custodial crypto exchanges. When you purchase from a non-custodial exchange, you'll be prompted as part of the purchase process to supply the wallet address that your crypto will go to. If you're using a hardware wallet, simply input your personal wallet address at the time of purchase.
This doesn't just cut out a step and some fees, it also means that you're always in control of your private key (and therefore your own coins) from start to finish. All of Invity's providers are non-custodial exchanges, making it much easier for both new users and experienced traders to compare crypto exchanges and buy crypto instantly.
Choosing to store your crypto in a hardware wallet allows you to rest easy knowing that your crypto is safe on a physical device. As long as you don't give out your private key, and create a recovery seed phrase in the unlikely event of an emergency, your crypto will be completely secure.
