In the wake of FTX's collapse, investors are beginning to realize the importance of cold storage. Leaving your cryptocurrencies on an exchange is a huge risk, as we saw with FTX. The now infamous exchange FTX filed for bankruptcy on November 11th, 20Ω22, and left more than $1 billion in investor assets lost.
If you don't own your seed phrase, you can lose everything in an instant. This is why it is so important to have a cold wallet storage solution like Black Seed Ink. We create steel plates that back up cold and hot wallet seed phrases. This ensures that you will always have access to your funds, no matter what happens to the exchanges!
Additional Details About The FTX Collapse
Sam Bankman-Fried, FTX's CEO, released a statement on Twitter addressing the issue of the liquidity of their funds, flip-flopping on the truth. On November 10th, SBF tweeted "It's 100% liquid. Every user could fully withdraw" and then followed with, "Alameda had more assets than liabilities M2M (but not liquid!)" on November 15th, 2022.
This terrible event shows the crypto industry that despite the confidence some centralized exchanges provide, you are still at risk of losing everything if you don't take the proper steps to protect your investment. Exchanges can go bankrupt, and in the case of FTX, users' funds can be frozen immediately without warning leaving them unable to access their money.
Sam Bankman-Fried is at the center of this controversy but the collapse started with Binance founder, CZ. Through a series of FTT Token sales, Changpeng Zhao AKA CZ caused FTX to go bankrupt as the token plummeted in value.
FTX is not the first exchange to fail and it certainly won't be the last. This is a reminder that you should always take your seed phrase and store it in a safe place like Black Seed Ink. After all, we've seen Mt. Gox collapsed as an early example of the dangers of exchanges. Then there was Celcius which denied users the ability to withdraw their own funds.
FTX had approximately 1.2 million registered users. This collapse spread to Alameda's vast ecosystem as other companies under their control also went bankrupt. This isn't just a small group of people that were impacted, FTX's reach was global. Don't let FTX's collapse be in vain, learn from their mistakes and take your seed phrase offline with Black Seed Ink!
The Importance of Self-Custody
If you've been paying attention to crypto news lately, you know that millions in user funds have been lost due to exchange hacks or poor management. This is a huge problem, but it can be easily avoided by self-custody.
Self-custody means that you are the only one who has access to your seed phrase. This ensures that even if an exchange is hacked, your funds will be safe. The only way to achieve true self-custody is to use a cold wallet storage solution like Black Seed Ink.
With Black Seed Ink, you can rest assured knowing that your seed phrase is securely stored offline. Even if your computer is hacked or stolen, your funds will be safe. This is because recording your seed phrase on a secret indestructible physical medium is the only way to achieve true self-custody.
By backing up your cold and hot wallet (i.e. Ledger, Trezor, Metamask) seed phrases, you can have peace of mind knowing that your funds are always accessible.
The Devastating Effects of Leaving Your Crypto On Exchanges
As we've seen with FTX, even the most popular exchanges are not immune to crypto contagions. When exchanges go down due to credit crunches, so do user funds. This leads to a cascading effect where one exchange's problems can quickly spread to others, as we saw with FTX and the magnitude of damage their collapse caused across the entire crypto industry.
Investors who left their crypto on FTX (or even platforms with deep relations to the exchange) lost everything overnight. This is a devastating blow, not just financially but also emotionally. Many people put their life savings into crypto, only to see it vanish in an instant. This is why it is so important to transfer your seed ownership away from centralized custodial services and into self-custody cold storage.
Investors who don't own their seed phrase are at the mercy of these exchanges. If an exchange goes down, so does their access to their funds. Even if users didn't have direct exposure to FTX, other cryptocurrency companies such as lending products and interest-bearing accounts were immediately impacted.
The FTX collapse is a stark reminder of the importance of self-custody and cold storage. Don't make the same mistake as the FTX investors - transfer your seed phrase to cold storage today!
Black Seed Ink – The Best Solution for Cold Storage
There are many cold storage solutions on the market. The key to staying safe and protecting your cryptocurrency is to hold your own private keys. As the saying goes, "not your keys, not your crypto."
Although self-custody reduces counterparty risk, negligence on the individual can still occur. Losing seed phrases written on paper has happened in the past. Paper is also at the mercy of degrading due to water or other natural disasters. Recording them on an online document is also a treasure waiting to be hacked as digital documents can be easily obtained.
The best solution for seed phrase storage is an offline, physical medium like Black Seed Ink's steel plates. Steel is virtually indestructible and can last for generations. Steel is durable and can withstand fire, water, and other disasters.
Black Seed Ink's steel plates are the premium standard when it comes to seed phrase management. By using Black Seed Ink, you can be sure that your seed phrase will always be safe and accessible, no matter what happens.
What Is The Best Crypto Wallet?
Now that we know how to properly store your seed phrase, deciding which wallet is the best for you is the next step. There are many different types of wallets with varying levels of security, so it's important to choose the one that's right for you.
The most popular types of wallets are hot wallets and cold wallets. Hot wallets are online wallets that are connected to the internet. These are convenient for day-to-day use but are less secure than cold wallets.
Cold wallets are wallets that are not connected to the internet. These are more secure because they cannot be hacked. The most popular type of cold wallet is a hardware wallet. Hardware wallets are physical devices that store your private keys and seed phrases offline.
The two most popular hardware wallets are Ledger and Trezor. These wallets are both secure and user-friendly. Ledger Nano is a covert device that can store vast amounts of digital wealth.
In addition to the premium steel plate, Black Seed Ink also provides a unique and innovative approach for not just keeping your private seed phrase secure, but also keeping your device safe. With 'The X Series', cryptocurrency holders like you can also protect their funds with a beautifully designed titanium casing that is both aesthetically pleasing and functional.
The X Series is the best solution for those who want the highest level of security for their digital assets. By using Black Seed Ink products, you can be sure that your seed phrase and physical devices are always safe and secure.
Self-Custody Best Practices (Final Thoughts)
There's immense power in self-custody as it enables you to be your own bank. However, with great power comes great responsibility. Seed phrases are long strings of random words that give you access to your cryptocurrency. If these words are lost or stolen, your crypto is gone forever.
That's why it's important to take precautions when storing your seed phrase. In addition to using a steel plate from Black Seed Ink, here are some other best practices for self-custody:
- Keep your seed phrase in a safe place that only you have access to.
- Don't store your seed phrase on an online document or in the cloud.
- Make multiple copies of your seed phrase and store them in different locations.
- Don't share your seed phrase with anyone.
By following these best practices, you can be sure that your crypto is safe and secure.
The FTX collapse was a wake-up call for many investors. It's important to remember that you are your own bank. Keep your seed phrase safe.