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Joined 1 year ago
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Cake day: October 31st, 2023

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  • If you are referring to Staking and holding crypto on Coinbase exchange, then it is seriously not recommended.

    Firstly it’s custodial. The exchange holds your private keys and therefore the assets you hold/stake on there are in the exchanges complete control. Exchanges are known to suspend/pause withdrawals during high volatility events leaving you without access.

    Secondly it harms decentralization of the network - Coinbase has a very high concentration of stake already, in fact they are the largest node by stake weight (in the superminority).

    Much better to use a non-custodial wallet such as Phantom/Solflare and stake to validator/s of your own choice.

    Would recommend to give u/Cogent_Crypto staking guide a read https://medium.com/@Cogent_Crypto/solana-staking-guide-part-1-6a6a85f07b56

    StakeWiz is a great tool to checkout metrics of validators and avoid staking with anyone on this list https://stakeview.app/poor.html


  • A Ledger isn’t considered a hot wallet although there were recent concerns, and rightly so, about an optional feature they were releasing called “Ledger Recover” which if the user Opt’s-In to will backup and encrypt your seed phrase, splitting it into 3 fragments and storing it with 3 backup providers. The concerns around this were how Ledger had marketed that the seed phrase generated and stored on the secure element could never be exposed online, of which such backup mechanism contradicts. Can learn more about Ledger Recover here: https://www.ledger.com/academy/what-is-ledger-recover

    With that mentioned, I personally believe Ledger is still a far safer tool to protect your private keys than any hot wallet, as long as don’t opt in to the recovery service.

    The way hardware wallets work is that they generate and store your private keys offline, which is what makes them known as cold storage. A common misunderstanding is that your crypto is stored directly in wallets, this isn’t the case, your crypto is held on the blockchain, but your private keys that are paramount to accessing your assets on the blockchain are stored in the wallet, whether that be hot or cold.

    Wallets such as Phantom/Solflare including Ledger Live simply act as a user interface to access the blockchain.

    A hardware wallet connected to Phantom etc still keeps your private keys offline (as long as you follow the correct procedures to “connect/add” the hardware wallet - you should never “import” your hardware wallet into Phantom as this would then make it a hot wallet as keys would be exposed therefore compromising the security of it.)

    Using an exchange to store/stake your assets on isn’t recommended for the simple yet important reason that they have custody of your private keys, meaning they have full control over your crypto. FTX is a perfect but very unfortunate example of why this is a bad idea amongst many other reasons… Exchanges also have been known to pause/suspend withdrawals etc.