Wallet

According to a recent Chainalysis report, thefts resulting from crypto hacks and exploits have totaled $1.58 billion in 2024.

In an Aug. 16 LinkedIn post, Germany’s Federal Office for Information Security, also known as BSI, explained the best practices for crypto storage and ultimately told users that a crypto hardware wallet was the most secure way to store private keys.

The post began with exchange-linked wallets, also known as “hot” wallets, and explained that while keeping crypto in an exchange wallet may be convenient for the end-user, it is also the least secure way of storing keys. This is because these wallets are always connected to the internet, creating an attractive target for hackers.

Next were self-custodial wallets on a user’s computer or smartphone. While this colder storage method is safer than keeping crypto on exchanges and allows users to control their keys, self-custodial wallet applications still suffer from “security gaps,” according to the BSI.

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