Hardware wallets: Why you should have a recovery plan

Have you ever lost your crypto asset with no clue how to get them back? Or are you having doubts about why you should choose hardware wallets above keeping your holdings on exchange platforms? If you have any of these thoughts or need to understand the concept behind having a hardware wallet and having a recovery plan, you should read this to the end.

What are hardware wallets?

Hardware wallets are fragments that make the entire crypto blockchain network. They provide utility and security in blockchain and blockchain-related activities. They provide an extra layer of security against malware, cyber-attacks, and phishing links. You need not worry about your assets using the hardware wallet because they are very secure. It's that keeps your assets intact even when your PC isn't safe.

Asides from being very secure, hardware wallets avail you of the opportunity of having numerous assets stored in just one location. So, you could have bitcoin, altcoins, DeFi tokens, NFTs, and more in just one single wallet. Each of them could be backed up easily with just your keyword passphrase. When you lose your wallets, the first step you take to recover blockchain wallets is to contact the right recovery services. Those that are competent and understand the blockchain ecosystem could help you recover all your lost assets since they all have one location.

Hardware wallets are such that they allow seamless transactions between wallets to a wallet. So, you can easily send assets or transact from your hardware wallet to another without having to go through the stress of imputing passwords and OTP before transacting. However, sending assets from one wallet to another is one of the safest means of transacting crypto, instead of first having it deposited in an exchange platform.

Why should you have a recovery plan?

If you have ever lost your phone password, and you've had to restore the phone to default before you can assess it, you'd have a clearer picture of why there's a need for a backup. It would help if you were careful with sensitive and financial topics like crypto. One of the most important decisions you'd have to make is backup and how to go about it. Having a backup is strongly advisable. However, be sure the backup itself is safe and reliable; otherwise, it will be the same as not having a backup in the first place.

Once your assets are in a hardware wallet, a backup recovery plan should be prioritized. Since all your assets are now in a location, you need to keep them safe consciously, and having a backup would aid the recovery process if the need ever arises. Here are some of the reasons why you need a recovery plan

It's the second layer of security

You can never be too sure of what happens next. That's one of the mantras of wallet recovery services. Since it's somewhat impossible to predict what might happen to your wallet the next minute, the only thing you can do is plan. More than wallet security, having a recovery plan is the second layer of security. In planning, you need to understand why you need wallet recovery services to help you recover blockchain wallets when the need arises.

It helps you stay prepared

Recovery plans help you stay far away from loss, either from cyber-attacks or your negligence. As mentioned earlier, it's impossible to know what comes up in the next minute, and when it comes to your digital asset, you don't want to be caught unawares. So, having a recovery plan helps you stay ahead of any loss that might be looming or that might become. Hence, it gives you an edge over the chances of losing your holdings anytime soon.

It makes portfolio diversification possible

One of the significant reasons crypto investors keep their assets on exchange is that most do not understand portfolio diversification. If you have a thousand dollars as your overall portfolio, you could have $500 sent to your hardware wallet, where you keep that to hold for the long term, and the other half will be your trading balance. Most investors do not want to spend some part of their assets on other wallets, sometimes because of FOMO. However, with wallet recovery, that's an added advantage since you know that whatever happens, you still have a portion of your assets kept with an added layer of security.