Stop blaming exchanges for performing security updates when you’re invested in a highly volatile asset class, and decided to have them custody your assets for you. Don’t get me wrong I can sympathize with your frustration when your funds are allocated to a single exchange and that exchange locks you out during a large swing, however, user’s need to start taking some of the blame too. Below are a few solutions you can take and I’ll even share my extreme measures when it comes to self custody.
Self custody isn’t for everyone, I understand that, nevertheless if you are not going to custody you own keys then you need to have diversity in your asset management so you do not pigeon-hole yourself. Let’s say you live in the United States, I would recommend registering with Binance.US, Coinbase, and Kraken. Then I would recommend dividing your assets by 1/3 on each exchange, please make sure you enable whitelisting and add all of the addresses for assets you have to all the exchanges. I am aware that the process can be cumbersome but it’s better to be prepared than blame someone else in the future.
How I custody my assets
First, there are a few things you should know about me when it comes to cryptocurrencies.
- I only accumulate assets, trading isn’t for me.
- Personally, I don’t even care about dollar cost average because I have a set price in mind and if I buy under that price point I am happy – thus I buy ever week regardless of the price.
- I am emotionally detached from my investments, even more then the “Don’t invest more than you’re willing to lose”. I love life and am appreciative of it, thus if my portfolio went to zero it wouldn’t phase me.
- I’m a true long term investor who doesn’t believe in mooning. The ability to double one’s investment is huge, people in the crypto space don’t even bat an eye at 3x gains.
- I don’t have any debt, and if you do have debt you should focus on paying that off first rather than hoping an investment will bring you financial security.
So how does a crazy person custody their investment:
- First, I am registered and fully verified on 8 exchanges and have 4 bank accounts just for crypto withdrawals and two bank account that I purchase crypto through.
- I whitelisted all of my accounts, and shared addresses from each exchange with one another as well as all of my hardware wallets.
- I use 2FA (never SMS), Yubikeys, and honestly whatever other options an exchange offers – the more inconvenienced you feel the better!
- I don’t save any of my passwords in a password manager and all of my passwords are different.
- I have 4 hardware wallets and 5 software wallets. I keep a bulk of my holdings on hardware wallets, and just test/play with software wallets.
- I keep my recovery keys stored in varies safety deposit boxes, with insurance, however each box only holds a portion of each phrase.
- I taught my daughter how to self custody, we have casual conversations about finance, basic asset management and she understands the process of moving crypto around. She’s 9 at the time of writing this but if I die she will have access to the safety deposit boxes when she turns 18.