Here's how you can keep your cryptocurrency safe based on my 10 years of experience in crypto. I'm going to share lots of tips that I hope you'll love: how to avoid getting scammed, how to keep your wallets simplified, and how to spot some surprising ways that people lose crypto that you wouldn't even think of. None of this is financial advice — it's just what I've learned and what has worked for me personally.
So what experience do I have to share? I've been in crypto for 10 years. Never once have I lost my crypto to a scam, a hacker, an exploit, an exchange going down, or a wrong address. Not once in all the transactions I've done, because I have a few best practices I follow, I trust my intuition, and I check with other people as well.
The biggest danger is your own decisions
Here's something that surprised me. Despite being profitable every year since 2015, the areas where I've lost the most money in crypto are entirely my own doing — I've actually missed out on millions of dollars. So the number one thing I think you need to consider in crypto safety is that the decisions you make, or self-sabotage, are most likely to be the area where your crypto gains get destroyed. That's what I've seen personally.
In my experience there are two main ways this happens. The first is not thoroughly researching the cryptos you are buying and holding. The easy way to correct this is to immediately dig deeper into everything you own.
Put at least 10 hours into every crypto you hold
For every single crypto you have, I would suggest putting at least 10 hours into using it yourself, learning about the team, understanding the value proposition, considering it in the bigger market picture, and looking at the alternatives. If there are cryptos in your portfolio you haven't spent at least 10 hours of dedicated research on, it's time to decide: do I really want to put the time into this crypto, or should I just get rid of it and consolidate my portfolio?
The easiest way to not get ripped off on poorly researched cryptos — the ones that turn out to be scams, rug pulls, or ideas entrepreneurs put out that never get successfully executed — is research. And in my experience, using a crypto yourself is the easiest way to research it.
This is how I figured out the Internet Computer Protocol was different from anything I'd ever used before. I actually took it off an exchange and started seeing all the things I could do with it. One of the first things that stuck out to me is that there are fully on-chain applications I can actually use. There are so many things I can do with my crypto on ICP — I can swap into all these other cryptos, I can tip people in OpenChat. By actually using ICP, I could feel it was so different from anything I'd ever touched. That whole journey is why I eventually realized ICP wasn't a scam, and you can see more of how I think about it in my ICP Crypto playlist.
Simplify: fewer coins, fewer wallets, nothing on exchanges
One of the most common problems I see is having an overly complex crypto portfolio you don't understand. If you want to keep your crypto safe, I think you need to simplify what you're doing. You can do that by consolidating the number of wallets and currencies you have — and obviously, everything needs to come off exchanges immediately.
Some of the biggest losses I've seen, and that I've consistently avoided, come from people leaving their money sitting on exchanges. I don't care which exchange it is. Yes, some are more reliable than others — for example, I have the highest level of trust in Coinbase. That said, your crypto on any exchange, including Coinbase, could have something happen to it. So I never hold my crypto on an exchange. To me, that totally defeats the entire purpose of cryptocurrency. It's funny seeing videos about how decentralized the blockchain is, and then realizing how many of the people holding those coins are holding through a completely centralized entity — a crypto exchange. So I always get my crypto off exchanges. If you want to see exactly how I move coins into self-custody, I walk through how to withdraw crypto from Coinbase to the NNS and OISY wallets.
One wallet, one recovery phrase
Another way I've seen people lose money — and again, you end up being responsible for the problem — is by having too many wallets and too many tokens. If you have several different wallets, you'll have too many tokens. If you're trying to use multiple wallets for a bunch of different cryptos, your portfolio is too complicated.
So to keep your crypto safe, I suggest having one single wallet that holds all your crypto, or the vast majority of it. That's what I'm practicing myself. Almost all the crypto I have is in the Network Nervous System wallet, directly on chain on the Internet Computer Protocol. I've done a bunch of videos about that — if you want tutorials, you can search "Jerry Banfield Network Nervous System" or "Jerry Banfield Internet Identity tutorial." Those show exactly how I've set up and hold my own crypto.
This makes things super easy for me, because it's just one recovery phrase. I've got my devices authorized, and I know exactly what I have to do to keep that wallet secure. The more complicated your setup is, and the more cryptos you hold, the easier it is to start making mistakes, losing positions, getting exploited, getting confused, and getting ripped off.
So, back to where I started: consolidating your portfolio into cryptos you have absolute conviction about and have thoroughly researched will help you get your wallet down to an absolute minimum.
If you want a hardware wallet
If you have Bitcoin, Ethereum, Internet Computer, and a few other popular cryptos, a Ledger hardware wallet is probably the best option if you want a hardware wallet. Now, every single wallet setup has ups and downs, and I've used a bunch of different ones to see what they are. For example, Ledger users have been upset that there's potentially a backdoor into the device. Ledger also has a recovery service that can help you if you lose access. Honestly, if you're the kind of person who loses passwords and can't say you're 100% confident in keeping access to your recovery phrase, that service could actually be helpful for you. The Ledger wallet can hold Bitcoin, Ethereum, many other cryptos, and the Internet Computer.
Ideally, you want to have one single wallet, one single PIN, and one single recovery phrase that you can totally focus on. What you don't want is your crypto spread across several exchanges, plus some in MetaMask, plus some in the Network Nervous System, plus a Ledger, a Trezor, and a few other wallets — because then you could easily lose portions of, if not all of, your portfolio.
Selling early is where I lost the most
One of the bigger ways you might not think of in terms of crypto safety — and losing your crypto — is by selling early. This is actually where I've missed out on the most money in crypto, and that combined with poor research is an exact recipe for failure. Even when it's not a total loss, it's a failure to realize the big potential gains. My poor research involved holding cryptos that Bitcoin far outperformed, and that shows you that a lot of the ways you'll lose come down to making bad decisions about where to allocate your capital. Everywhere you hold crypto is an opportunity cost, because you can't hold that capital somewhere else.
That's why I'm all in on the Internet Computer Protocol — because in my opinion it's going to far outperform Bitcoin and Ethereum, and I think those two will far outperform the majority of altcoins. So for me, anything that's not the Internet Computer Protocol is, in my view, getting less gains than I'd get somewhere else. This is exactly what happened to me: by choosing to go all in on the cryptos I picked in the past, I missed out on huge gains I would have had by just leaving my money in Bitcoin and Ethereum.
In the short term, a lot of us are tempted in crypto to swap into altcoins for bigger profits, or to diversify hoping to catch hundred-x's. But since so many cryptos go to zero or just lose against Bitcoin and Ethereum, the easier strategy is often to find a crypto that's very unlikely to be valued less than it is now and that has huge upside potential. Bitcoin and Ethereum, to me, are unlikely to be valued less in the future than they are now, and they still have good upside. But I think ICP has a lot more value in the future than where it is today — that's my personal opinion, not advice.
The mistakes that cost me millions
Once you pick your projects, selling too early is where I missed out on millions of dollars of earnings. I sold my 60 Bitcoin for $1,700 each, feeling like that was a good deal at the time — and to be fair, that was the top we'd ever seen back then. I missed out on hundreds of thousands of dollars I would have made by just waiting eight more months, and millions I would have made by holding a few years longer. Same thing with selling my Ethereum. And I sold my Dash before it went up another 10x — instead of turning $10,000 into $80,000, I could have turned $10,000 into millions.
So with keeping your crypto safe, the thing to begin with is to really see the huge importance of picking the right project to invest in. There's nothing more important than that, because all the other stuff — the scams you're likely to get into, the Telegram bot ripoffs, the wallets, holding on exchanges — everything else starts with which cryptos you invest in. From there comes which wallets you use, how easy they are to use, and the utility of the token. So for keeping your crypto safe, there's really nothing more important than picking, extremely carefully, which cryptos you invest in. You might think of it like picking a wife or a husband, rather than a bunch of one-time hookups that you're then stuck with until you sell them.
Going all in simplifies everything
For me, I've gone all in on the Internet Computer, and this makes everything else I'm doing simpler. Since I'm all in on ICP, I have one single wallet — the Network Nervous System — where I keep my ICP. I've got it locked up for the long term, so I can't prematurely unload it like I did with Bitcoin, Ethereum, and Dash. I also can't impulsively put that capital into some other project — like Steam — without thoroughly researching it. I've spent hundreds and hundreds of hours researching, I've locked it up, I'm committed, I'm in position, and all I have to do is wait. It's secure, and this keeps me out of a lot of the ways people get ripped off in crypto. I've got 90-plus percent of my money in crypto, and most of that is in ICP. Then I do small transactions, but only in a very limited number of places.
Never use direct messages, and never share your recovery phrase
We just saw an example in my OpenChat group, which is linked on jerrybanfield.com. Someone said they got ripped off in MetaMask recently. They had trouble with one of the apps they were using, they went looking for support, and then a scammer acted like customer support in a direct message and ended up draining their MetaMask wallet.
So for me, a general security practice is to not even use MetaMask to hold crypto at all. I know for some of you that'll be heresy, but I've seen so many people get their MetaMask wallet drained, because it's so easy to have a problem with some coin you don't even use that often and then get ripped off in a direct-message scam. A general safety practice is to never do anything at all in crypto through direct messages. The scammers always use direct messages, and they'll say anything possible to get your crypto.
The one reason I've never been ripped off by scammers is that I've never given out my recovery phrase to anyone. You never, ever give your recovery phrase to anyone you don't want to be able to take full control of your wallet. Obviously my wife has access to my recovery phrase, but other than that, no one has access to it. For better or worse, the way I've got things set up, if my whole house, and my wife and I, got wiped out, I'm not even sure my kids could ever access my crypto. So I'm going to work on setting that up somehow, so they could potentially get to it.
How I store my recovery phrase
With your recovery phrase, you also need to make sure you can't lose access to it. Here's what I like to do. I keep the majority of the recovery phrase in a password manager, plus a hard copy — so the bulk of it is very accessible. Then I take some of the words out of the recovery phrase entirely and leave them out of both the password manager and the written version.
That works because each word is multiplicative. There are about a thousand or so possible words for each single position in the phrase. So if you take out as few as two words, that's helpful; three or four words is extremely effective, especially if you take them from random positions in the phrase. If you memorize those, truly nobody will be able to get into your wallet except you. You could even split the words or have some secret system.
Think about the math: two words is roughly a thousand times a thousand, so someone might be able to brute-force two missing words out of a 24-word recovery phrase if they could figure out where they belonged — but it would take potentially hundreds of thousands of tries. Memorizing just two words makes it very hard; three or four makes brute-forcing it almost impossible. With a couple of words safely in your head, you could keep a copy of the rest practically anywhere — in your wallet, in your car, even taped right next to your computer.
You really want to make sure you don't lose your own recovery phrase, because a lot of people have lost access to their crypto simply by losing it. If you have a Ledger, for example, and you forget the PIN or the device gets damaged, the recovery phrase is the only way to restore it — and if you lose that, it's over. So ideally you should have one recovery phrase that is kept both securely and available, which is exactly why taking a few words out is such a good method: it keeps the phrase available without keeping it fully exposed.
Keep it simple — most losses come from doing too much
Once your wallet is set up, I'd keep what you're doing simple and not get into a bunch of other stuff in crypto. Where I see people lose their crypto a lot is trying all these advanced things. I've been in crypto 10 years, I'm pretty tech savvy, and I don't get into much today. I have my Network Nervous System, I stake, I have my OpenChat community. I've tried some things like providing liquidity and buying NFTs, but I don't get into very many different things in crypto anymore, because that's often where you waste a lot of time and energy — and where you get ripped off.
For example, I've seen some of you in Discord say you got ripped off on airdrop scams. This is why I generally suggest not even trying to do airdrops in most circumstances, especially anything involving MetaMask — those are almost always scams, where you connect your MetaMask, try to claim an airdrop, and your wallet gets drained. So I'd say never do an airdrop on something like MetaMask, Trust Wallet, or Coinbase Wallet. Some ICP airdrops, because of how ICP is set up, you might be able to do securely — but in general, the more you reach for these things, the more exposed you are. I broke down a recent example of exactly this kind of fraud in my look at the Skyren presale scam and airdrop fraud.
Things like providing liquidity, or swapping all these different coins — I've seen people on ICP who couldn't get their coins out, or didn't even know where they sent them. The simpler you keep what you do in crypto, the fewer ways there are for it to go wrong. That's why holding as few currencies as possible and as few wallets as possible matters: there are fewer things to screw up. And it's usually when people screw something up that they become vulnerable to getting scammed. You mess something up with your wallet, you need help, so you post on X or Telegram asking for it — and then a scammer tricks you and takes the rest of the money out of your wallet that you didn't already lose. Simplicity will help you enormously with crypto.
The easiest safety move: just ask for help
Finally, one of the easiest things you can do is just ask for help and ask for other people's opinions. There have been so many times where people got their wallets hacked or drained, or bought into some bad coin that went to zero, when literally all they would have needed to do was ask first. If you go to jerrybanfield.com and click on my OpenChat, or click on my Discord, those are places you can post questions.
A lot of times I don't even need to visit a website to help — I can look at the URL and say, "That's obviously a scam." Something like "free Ethereum airdrop" is obviously a scam. I don't even need to go to the URL to see it. And the only thing you do at a site like that is connect your MetaMask wallet, and it drains you. So ask someone before you do something. Ask other people for feedback.
I know a lot of us don't want to ask for help. We try to do these things on our own because we think we're smart. But smart people ask for help. That's exactly why I have my community — so I can ask for help and opinions all the time.
The Steam story: what asking first would have saved me
When I poured 20 Bitcoin into Steam in May 2017, if I'd just held that 20 Bitcoin, I would have turned it into several hundred thousand dollars effortlessly. I literally wouldn't have had to do anything. Instead, I plowed it into Steam, spent a year promoting it, and made less money than that with a full year of effort — at a time when I was charging as much as a thousand dollars an hour. I had a huge crypto following, and I destroyed my crypto channel promoting Steam. People got sick of it, because unlike ICP, there were some big differences with Steam. I wrecked my existing business and made less money than I would have by just holding. I'd even sold some of my Bitcoin into US dollars and re-bought 20 to put into Steam — I literally could have done nothing and made more.
You know how I would have avoided that? If I'd had an OpenChat community or Discord like I do now, and I'd asked for everyone's opinions instead of deciding something in the dark, relatively alone, before dumping a year of my time and energy into it. If I'd just asked beforehand and let people tell me why Steam was a bad idea — the good, the bad, and the ugly — I'd have known.
So I encourage you: before you buy the next crypto, before you sign up for the next airdrop, before you swap coins, join a community somewhere. My communities are both paid — my OpenChat is paid to keep the scammers and spammers out, and my Discord is paid for the same reason — but there are lots of free communities too. Just remember, I will never direct message you first, and you should generally not trust people who direct message you. You need to have a community somewhere where you ask people for advice and share projects. If you ask me what I think of some coin you're holding, and you ask other people too, in a couple of sentences we might say, "That's pretty bad, and I definitely wouldn't hold that over Bitcoin, Ethereum, or ICP." Get our opinions. If you'd like that kind of feedback from me directly, you can join my community and ask away.
Check with other people, the way some people check with God
In AA and in spiritual circles, people often talk about getting divine guidance, or guidance from God. Spiritual people check with whatever guidance they got from a higher power. We check with other people, because sometimes the idea that seemed great — the one that felt like it came straight from God — you start telling other people about it, and it turns out, "Oh, that's not such a good idea, is it?" Maybe that one came from the lower power rather than the higher power.
So join a community, ask people about what you're doing, and please keep your crypto safe. I've talked with lots of people in one-on-one calls, which are also on my website, who've lost a lot — collectively probably millions of dollars in crypto. From my point of view, almost all of those losses were preventable. So I hope this has helped prevent you from losing money in crypto. If you enjoyed this, you can watch more of my coin breakdowns and money videos in my Money playlist.