If you fail to prepare then prepare to fail. This may sound like a platitude but it is especially true when dealing with cryptocurrencies. The last two years have shown how poorly human beings predict the future. No one expected a pandemic or war to break out. Our circumstances differ tremendously but when you develop an “anti-fragile” mode of living you can thrive in times of chaos. 

Nassim Nicholas Taleb discusses managing uncertainty in his books and I’m a fan of his mental models. He argues that what you don’t know is more important than what you do know and unknowns have a significant impact on results. Not knowing crypto exchanges have been hacked before can lead you to think your digital assets are safe there until it happens. Withdrawal of assets to a hardware wallet improves your ability to deal with adverse situations when they arise.

For instance, companies that proactively enabled their staff to work from home long before the COVID-19 outbreak, were streets ahead of companies that didn’t, when lockdowns were imposed. If you purchased a hybrid or an electric car to reduce your carbon footprint years ago, a war leading to rising petrol/diesel fuel wouldn’t affect you as much. That is not to say any of these bad circumstances were predicted, it's just embracing optionality pays off. Finding different ways to do the same thing decreases the occurrence of a single point of failure. That’s why wealthy people diversify their investment portfolios to decrease risk.

As I said in my previous article, a cold wallet is great for managing counterparty risk (custodian holding your assets). With a hardware wallet, you don’t need to trust a custodian because you can take full custody of your assets. Ledger has made this easy and I do regular hardware wallet raffles for my subscribers as a result (subscribe here). You can win one completely free by subscribing to my Newsletter and Podcast. The rest of this article is a short guide on how to set up a Ledger hardware wallet.

Startup

Set Up for a Ledger Nano S Hardware Wallet

* Download Ledger Live (on your PC and mobile phone). The app is essential for managing your crypto and setting up your wallet.

* Initialise your Ledger device by watching the video above and/or below.

* Note your recovery phrase on the provided sheet of paper in the box. This information allows access to your keys so keep it safe and private.

* Install apps on your Ledger device for each crypto you want to manage.

Set Up for a Ledger Nano X Hardware Wallet

Transfer Funds

* On Ledger Live, select crypto, tap Receive/Deposit. Choose the correct network. Confirm address using your Ledger. Copy address.

* On an exchange like Binance, tap Withdraw on the same crypto. Ensure the network matches. Paste address.

* Check the first 5 and last 5 characters of the address are correct on both Ledger and Binance.

* Send the minimum or lowest amount first to see if it arrives.

* If the low amount succeeded, send your higher intended amount.

If you’d like to move funds from your Ledger to an exchange, you can do the opposite by swapping steps 1 and 2. Instead of receiving assets to your Ledger, you’d be withdrawing. Rather than withdrawing from your Binance, you’d be receiving. Check out the useful video tutorial below.

Transferring Assets from Binance Crypto Exchange to Ledger

Staking

Staking depends on the Ledger device you have and the cryptocurrency. A Ledger Nano X has a battery and Bluetooth so it can connect to your phone wirelessly. You can connect your Ledger Nano X to the Yoroi Mobile App and manage Cardano (ADA) on the go. However, a Ledger Nano S and S plus don’t have a battery and also don’t have Bluetooth. You need to connect to a PC using a USB to handle your digital assets. You can still stake ADA both ways but through different means.

Staking ADA using the Yoroi Google Chrome Extension on PC

Bitcoin operates using proof-of-work protocol while Binance Coin (BNB) and Cardano (ADA), use proof-of-stake. These function like Android and iOS so the user experience varies. Staking is possible with a protocol akin to proof-of-stake. It allows holders of that type of crypto to be rewarded via smart contracts. Storing BNB or ADA secures the network and enables earning both in your sleep. This facilitates gaining interest on your digital assets at much better rates than you get from a bank.

The highest I earned on BNB at peak bull market was over 30% daily. It now ranges from 8–10% in the current bear market but it still accrues every single day. ADA is more consistent in that interest varies from 3–5% and you receive it every 5 days. One of the reasons I consider crypto as superior to traditional banking is the nature of staking. No bank in the world grants you daily or weekly APY (annual percentage yield) of 3–30%. Cryptocurrencies and smart contracts make this all possible. 

Its denoted as passive income but there are steps to automating stake rewards. Regarding the Cardano blockchain’s native currency ADA, you need to delegate to a stake pool. These are decentralised networks of computer nodes running Cardano software. They mint blocks and secure the blockchain. Each stake pool is run by a validator, possibly working on a project to improve the adoption and functionality of Cardano.

You can delegate ADA to any project you find interesting and earn more crypto along the way. For over a year I utilised my ADA to fund a stake pool called ‘Proof of Africa’ that enhanced the skills of Nigerian youth in the realm of Web3. Visualise Web1 being PC, the first iteration of the internet. Next came Web2 which was the move to mobile phone internet services and apps. Now we’re progressing towards Web3, an immersive internet experience with cryptocurrencies, NFTs, the metaverse, augmented, and virtual reality.

Africa is typically one of the last to acquire access to new tech so it was fulfilling to support black adolescent women and men with early exposure to these concepts. Many see crypto as a road to amassing riches but that’s just the tip of the iceberg. It’s a novel approach to affecting change and revolutionising the world for the better.

*** If you made it this far it’s been a pleasure writing for you. I hope you enjoyed it and picked up something along the way. I want to simplify complex things including sustainability, economics, and crypto. Please follow, like, and share as it helps me a lot. Subscribe to get exclusive access to crypto prizes and the audio version of this article. Tune in weekly for more insights.

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