The dangers of leaving your cryptos in a cold wallet and forgetting about them!

Have you often played with the thought of buying different cryptocurrencies, storing them in a cold wallet, only to check back on them in 10 years from now? Will you end up a rich person, or has the entire crypto market fallen apart and there is nothing left?

I have played with the thought myself, and I am kind of doing it as well. But, there are a couple of dangers that we shouldn’t forget about when it comes to storing your cryptocurrencies in cold wallet (and also on exchanges and so). But, I believe the danger, first of all, comes when you store cryptos in cold wallets for which you administer the keys yourself.

Storing your cryptos in cold wallets.
Storing your cryptos in cold wallets.

Dangers of leaving cryptos in cold wallets for many years without paying attention

Don’t do like they did in the Big Bang Theory

I think it was in December 2017 that an episode of The Big Bang Theory dealt with Bitcoin. Sheldon and his friends had mined some Bitcoins in the early phase, and as Bitcoin reached 5000 USD, they planned on selling them. But, there was one slight problem to the story… they lost the private keys to the wallet. They couldn’t open them.

Luckily, Sheldon made a backup and stored it on a pen-drive. Lennart Hofstadter, however, didn’t know about the backup and carried the pen-drive with him all around the world. Once he lost it in the cartoon store of Stuart, and as he discovered it, he formatted it and sold it for some bucks in the store. THE END!

In other words, you better take care of all sorts of backups, private keys, and passwords. If not, you might end up knowing that you actually own a lot of money, but you cannot access it. That is not a nice thought to live with!

It is dangerous simply to forget about your tokens

You might take care of all your private keys and passwords, but there is another problem you might discover as you want to sell your high valued tokens in the future. If you have been in the industry for a while, you have probably heard of token swaps? This is a common thing taking place in the industry, and in the last year, I have had to swap a whole lot of tokens. Vechain, one of my favorite crypto-projects, went from running on the Ethereum blockchain to run its own blockchain.

The same is true about lots of other cryptocurrencies, and if you do not pay attention, it will be too late to arrange the swap. What is the result? You might own tokens that could have had a high value, but since you didn’t swap them for the new tokens, they are worth absolutely nothing and there is nothing you can do about it. Unfortunately, token swaps normally have a time limit, meaning that it can be performed until a certain time, and after that – they are worth nothing.

Personally, I have 2000 REBL tokens I got from an airdrop a few years ago. Recently, they did a token swap and got their own mainnet. But, as I didn’t perform my duty before June 30th, I lost out on it. Currently, the tokens would have had a value of 1 USD, but that doesn’t really matter now. What does matter, is that if they would be worth 1 USD anytime in the future, I would lose out on that money, simply because I didn’t swap in time.

In other words, you have to pay attention and perform what’s needed of you!

But, is it better to store in exchanges?

Not at all! That is a very risky business, and we have seen in the latter years how everything changes in the world of exchanges in no time at all. First, Poloniex was the big thing, then it was Bittrex, and currently, it is Binance. But, then something happens, and an exchange disappears (read Cryptopia), and then another exchange is hacked, and who knows what will happen in the coming years?

In my mind, there is no easy solution to this. You cannot just leave your cryptos without paying attention to them, too much is at stake, and you might up regret your mistakes dearly in the future.

These were just some thoughts about storing your cryptos in cold wallets without paying attention. I know, it would be much easier to just buy and forget about it for many years. That is nice, but there are some hidden dangers coming together with this strategy as well!

Leave a Reply