Poloniex went down, again

Today the exchange market Poloniex went down. Fortunately, they acknowledged the issue on twitter to avoid a general panic.

Whatever caused the website to go down you should ask yourself this question: What if it’s down FOREVER?

Your assets are being taken hostage

Most of us keep all their wallets online, on websites similar to Poloniex. Coinbase, Kraken and so on are the same. In fact, they all can be hacked, can go down, can be submerged with traffic or even disappear.

Correct me if I’m wrong but your assets are not insured. If something happens, you can’t go to the police and complain. The whole point of cryptocurrency is not having any regulation.

Thus, when your “wallet” is down there is nothing you can do really. You just have to wait until it hopefully goes back up. In the meantime, you might miss trading opportunities but the worst would be not being able to access your wallet anymore.

What are the other solutions?
1. Move everything to a different “online wallet”

That’s what Poloniex is. This type of wallet is accessible from any device connect to the internet.

2. You could use a “software wallet”

Basically it’s a program you download to your computer or your smart phone. The security level of these wallets is as secure as the hosts. For instance a malware could compromised your information.

3. Print out your wallet on piece of paper

Yes that right, a piece of paper can do the job. All you need on it are your public and private keys. To use it you’ll need to add those keys to your existing wallet service.

However remember this:

  • Paper can burn
  • Paper can get water damage
  • Ink can fade

If you go this route, remember to make many copies, just in case, and store them somewhere safe.

4. Use an hardware wallet

The hardware wallet looks like a USB thumb drive. It has to be plugged to your computer only when you need to make a transaction.

What’s make it ultra secured is the fact that the keys are generated (offline) on the device itself. The device is password protected and offers backups so you can’t lose access to your wallet.

Conclusion

Take it as a warning. What happened today could happen to any exchanges. Many storage solutions exist and we will be testing some of them in the upcoming weeks, so stay tuned.