More and more people now hear about Bitcoin, someone decides to buy, someone just started reading about it, and someone has been trading it for 10 years. Let’s say you become the happy owner of a piece or even a whole Bitcoin or several out of total 21 million. Just think about it, there will never be more than only 21,000,000 and there are 7,800,000,000 people on Earth.
So what next? how to store it so as not to be stolen. There are 3 options and each one I gave a star as far as safety is concerned.
The worst option is to store large amounts, because the whole idea of Bitcoin(BTC) lies in decentralization, and exchanges are centralized institutions, i.e. there are some individuals who own it. And if so, then they just own your funds. So recently I could not withdraw money from Coinbase. They were in my portfolio, but when tried to withdraw, they are were not available. Sure, first I wrote the support, 3 or 5 of them didn’t give me the answer how can I do it and why it happened. Then I found Linkedin of each Coinbase’ CEO and I asked them, why their support doesn’t answer me 😀. And only after 4 days I was told that it was in a hidden wallet, from which I should first withdraw to a regular one, and then I can move from the exchange. I am not very pleased when my funds are in someone’s hands, especially if tech support even doesn’t know how all features work. P.s. but in general Coinbase as a trade platform is pretty nice, it’s very convenient, very good for lazy. Check my previous article about where to buy Bitcoin.
Exchanges are good only for trading and if you are a beginner, because creating a wallet will not be difficult for you. Cryptocurrency exchanges are not a secure place to store your coins. Once you’ve bought your Bitcoin, move it to your software or hardware wallet as soon as possible.
Digital Wallets 🌟🌟
If you operate with large amounts, but not giants, which are often involved in buying and selling, then it is better to use a digital wallet. It usually looks like an App on a Phone or Laptop, or it can be an extension for a browser. You don’t need to go first to any exchanges, you just open your wallet as if it’s your online bank account. But again, the problem is that e-wallets are connected to the Internet, which means that there is still a possibility of theft.
Therefore, again, it is better not to store large amounts there. What’s big is up to you. I would say this – the amount that you will be very sorry to part with in case of theft :)) Software wallet should be fully non-custodial, this means only you can access your coins, not the wallet provider.
Hardware wallets 🌟🌟🌟
The most reliable option. Yes, it may look like a USB flash drive (how it may seem to some people), but firstly, this is not just a USB flash drive, but a high secure and cool high-tech device that cannot be hacked or almost impossible, unless you give your pin-code. And if you do, it will be a pin code from a fake account, because this device has a double bottom in case of fraud. And how do you like this “flash drive”?) This option is suitable for large amounts or, again, for the amount that you are not ready to lose. They must be from a company with a reputation, for example Ledger Nano S, because you will trust this device more than your mom 😀. Therefore, it should not have any secret chips or whatever. However, for quick trades, this type is not suitable, it is not very convenient. Therefore, the ideal option is a cold storage with a web interface. This is because hardware wallets are not connected to the internet, making them invulnerable to online hacking.