How to create inter-generational wealth - Part 3

Abraham George Essay Series

Read Part 1 and Part 2 if you haven’t already.

There is a lot happening in cryptoland and let me remind you all once again of the importance of keeping your cryptos in a cold wallet away from the exchanges.

All cryptos may not be supported by the same wallet. Therefore you may have to buy more than one. For a fact, I know the most popular Ledger wallet does not support XDC. So you may have to buy another wallet like d’cent if you already have Ledger. Or you only buy d’cent as it supports around 1200 cryptos. You need to figure that out.

There are many other cold wallets available but do check if they support the cryptos that you are buying. Ledger Nano and D’cent are two of the high-end wallets that you can buy. If you are a medium to the long-term investor you shouldn’t be looking to trade the cryptos. For traders, putting your cryptos in the cold wallet is an annoyance. But it is for you to decide if you’re going to make inter-generational wealth by trading or investing. As a seasoned market veteran, I can vouch that much of the real wealth is all made in investing. At times you need iron-clad conviction and patience with your holdings. So, do enough research before you dive in.

Everything will become clearer once there is regulatory clarity and institutional adoption. Nonetheless, the present low price levels are great to accumulate in some excellent projects at the basement levels considering their future prospects.

Always ask: what is its utility? What global problem is it trying to solve? How soon will it be obsolete? There are many risks in keeping your cryptos on the exchanges but the three very important ones are:

1. crypto exchange hack or theft

2. exchange failure or insolvency

3. forfeiture, access revocation, or withdrawal suspension due to excess market volatility or regulatory order.

The whole idea of cold storage is that it is not connected to the internet, hence protecting your wallet from unauthorized access, cyber hacks, and other vulnerabilities to which a system connected to the internet is susceptible. So an expense of $100 to $200 is worth it depending on your holdings and the peace of mind it provides.

Once your cryptos are in the cold wallet, it is safer than keeping it with leading banks or any other security measure you can think of. It is the most secure way to hold your digital assets as long as you hold the security protocols in your safe custody.

Remember when your cryptos are on the cold wallet it is on a blockchain protocol. You will be able to access it from anywhere in the world as long as you have your dongle which looks like a USB or you have a biometric wallet like d’cent. Swaps between cryptos can be done on the cold wallet itself. Any time you want to cash any part of the crypto you will send that part to your exchange, sell it and transfer it to your bank or any other institution where you are holding your account.

This in itself should tell you how banks will be losing out heavily down the line over time as most assets will be digitalized and tokenized. Any bank that will not adapt to the new technological changes will disappear over time. The role of banks and their functions will also change drastically but that will be a discussion for another time.

I will not be discussing the security measures and methods for your crypto anymore. Remember: “Not your keys, not your crypto!”

Continue to Part 4.

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Abraham George is a seasoned investment manager with more than 40 years of experience in trading & investment and multi-billion dollar portfolio management spanning diverse environments like banks (HSBC, ADCB), sovereign wealth fund (ADIA), a royal family office and a hedge fund.