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One question to decide when you need a hardware wallet
There is no minimum dollar threshold for a hardware wallet, so I use one question instead: would losing this amount cause me real financial pain?
Written by John AlewineReviewed by the Crypto Guidance team
Published ยท Updated
I get asked for a number a lot. How much crypto before it belongs on a hardware wallet? There is no minimum threshold. I use one question instead.
The question
Would losing this amount cause me real financial pain? If the answer is yes, use a hardware wallet.
It's personal. Some people hardware-wallet $500. Others are comfortable keeping $5,000 on a software wallet. But the default should be: when in doubt, move it to cold storage.
What the options are
- A software wallet is an app on your phone or computer. It is fine for pocket money you need this week.
- A hardware wallet keeps the keys on a device that does not live in your browser.
- Crypto sitting on an exchange is held by the exchange. That is fine for a first buy, but it isn't a plan.
Keep only what you need for trading on exchanges. Put the rest in self-custody.
Why a chatbot can't answer this
An AI chatbot can explain what a hardware wallet is. It cannot answer the pain question for you, because only you know what the amount means to your budget.
The full walkthrough is on the security page.