Vaulting: What It Is, and How To Do It

XNL Labs is an independent organization specialized in Distributed Ledger Technologies and Cryptocurrencies.

June 6th, 2021

To understand more about Vaulting, please read our article on Premiere Paper Wallets (PPWs) linked here.

How To Vault Using Ballet Wallets

Why Vault Anyway?

The idea behind Vaulting is this; To create for yourself a personalized method of storing your cryptocurrencies in order to minimize the risks that are associated with holding all of your tokens on one device.

Another reason for Vaulting is its simplicity of access, especially for newer users of cryptocurrencies who may have difficulties using some of the older forms of cryptocurrency storage.

There are many ways to store cryptocurrencies, such as a hardware wallet, mobile/software wallet, or conventional paper wallet, but there are quite a few risks associated with each.

What are these risks you mention?

Some of the major risks and issues that users have experienced and described, specific to each wallet type, are the following;

Hardware Wallets

• Difficulty of integration for new adopters of cryptocurrencies.
• Lack of hardware space for adding and approving the storage of multiple cryptocurrencies.
• Your device being damaged and thus becoming inoperable.
• The risk of having your device stolen and losing every last bit of your funds.
• Your device being hacked through unknown malware installed on your computer, and having your wallet holdings stolen maliciously by hackers.
• You losing your device. That simple.
• You forgetting your password to access your Hardware Wallet, such as with Ledger wallets, and thus; Activating the protocol within the wallet that wipes your entire wallet’s cryptocurrency holdings by putting in the incorrect password 3 times.

Software/Mobile Wallets

• Your wallet software becomes unsupported, leaving you with a wallet that has cryptocurrencies stranded in limbo without a way to access the user interface in order to withdraw them.
• Regulations in your country may require that your smartphone manufacturer are not allowed to host these Mobile Wallets for download any longer on their App Store in your country, cutting you off from having what used to be an easy to use wallet-on-the-go.
• Lack of integration for cryptocurrencies on certain Software and Mobile Wallets may limit your ability to store the cryptocurrencies you would want, such as ERC-20 or BEP-20 cryptocurrencies.

Paper Wallets

• You lose your paper wallet.
• The paper wallet becomes damaged and inaccessible.
• The paper wallet only has a one time use, so you may end up trying to re-use it, and lose access to your cryptocurrencies forever.

Simply put, there are far too many risks and barriers to entry associated with older wallet storage forms. For the average cryptocurrency user, these risks are just needless and easily avoidable by just adopting a simple system like Vaulting through Ballet Wallets/Premiere Paper Wallets.

How To Vault

The following will be a brief but concise description for the easy to use, easier to understand technique behind Vaulting.

This technique is best used with Ballet Wallets, due to their functionality, ease of use, and portability.

We will start with 3 different categories;

1. Vault Wallets:
   Your Vault Wallets are your personal savings. They are the wallets that hold the higher amount, value or quantity of your cryptocurrencies, and you use multiple Vault Wallets so that you can spread out your risks such as the ones we mentioned earlier about lost or stolen devices.
2. Transfer Wallet(s):
   Your Transfer Wallet is simply the wallet you will utilize as a sort of transitional account for your cryptocurrencies to eventually find their home amongst either your Vault Wallets or Cash Wallet(s).
3. Cash Wallet:
   Your Cash Wallet is the one you load for the day. The one you need for when you want to go out, hang out with friends, buy some lunch or dinner, go to an event, or just to have any emergency cryptocurrency in your possession for whatever moment or situation may arise.

Ideally, you will always have multiple Vault Wallets. The low cost of buying a Ballet Wallet makes it so much easier to implement this strategy as well, as the retail cost for a single Ballet Wallet is running at around $25 to $35.

How Vaulting Looks When You Do It Right: A Brief Example

I have an exchange, such as Coinbase or Binance, where I purchase my crypto.

Today I decided to buy 100 Dogecoin, 2 Binance Coins, 1000 USDC, and 0.1 Bitcoin.

(All of these are cryptocurrencies that are supported on Ballet Wallet)

I want to withdraw ALL of my cryptocurrencies from the exchange, to my own wallets, so I can have more control over what my cryptocurrency does.

1. My first step is to send all of these cryptocurrencies to my Transfer Wallet.
2. From the Transfer Wallet, I deliberate.
   I finally decide how I want to allocate;
3. 50 of my Doge to Vault #1
4. 50 of my Doge to Vault #2
5. one of my Binance Coins to Vault #3
6. one of my other Binance Coins to Vault #4
7. 200 of my USDC to Vault #1, Vault #2, Vault #3, and Vault #4
8. My 0.1 of Bitcoin to my Vault #5.
9. My last 200 of USDC will be on my Cash Wallet, to have cryptocurrency in a stablecoin pegged 1:1 to the value of the US Dollar. Read more about stablecoins here.
10. I have now allocated all of my funds; my Transfer Wallet is totally empty, my Cash Wallet has some spending crypto on it, and my Vault Wallets are established!

In Summary

No matter what type of cryptocurrency user you are; hodler, trader, investor, or simply enthusiast, there is always a need for you to have some type of way to manage, access, and store your cryptocurrencies. Vaulting provides the Easiest To Use solution for anyone, regardless of experience, to store their cryptocurrencies in a safe and secure way.

I hope this article has helped you understand a little more about the impact that Premiere Paper Wallets will have moving forward in this ever-emergent space of Cryptocurrencies.

Feel free to ask any questions or give us any critique or insight you might have about the process of Vaulting by contacting us at cryptoxnl@gmail.com!

Thank you again for reading and have a wonderful rest of your day!
As always; Don’t Trust, Validate!

Making Crypto Easy