It seems that almost everyone in this thread is against storing Bitcoins online, well I'm all for using online wallets
And I believe people will change their stance on this over time,
you can't keep all your money under your bed your whole life For me, personally using Coinbase to store my Bitcoins is immeasurably more convenient than using local or paper wallets. It means that I can access my coins anywhere in the world without having to carry my computer and my private keys with me or
having to download the blockchain every time.Coinbase is insured anyways. Here's an excerpt from an article from Coinbase's support center regarding this:
"
Coinbase is insured against employee theft and hacking in an amount that exceeds the average value of online bitcoin it holds at any given time. Specifically, Coinbase's insurance policy would respond in the event that bitcoin stored in Coinbase was lost or stolen as a result of a breach of our physical security, cyber security, or as a result of employee theft.
Coinbase has held this insurance since November 2013 with highly rated carriers (S&P rating of A+ or A.M. Best Rating of A XV or higher).
This insurance policy does not cover damages resulting from a specific user's loss, such as the losses resulting from a compromise of the user's login credentials."
there are a lot of things wrong with what you just said here. i have made them bold.
first of all you use cold storage (under your bed
) for large amounts that you don't need everyday. like putting 20
BTC there that you don't need to have access to every day!
second you can use online wallets, nobody is against them you should only know the risks. so keep what you want to
spend there not all your bitcoin.
last but not least, the insurance as you quoted here only covers the loss if it is on their end. as i said in second, the risk of using an online wallet is being hacked, losing your coins because of weak password, having a keylogger, other social engineering hacks, .... which are not covered by coinbase or any other wallet.
You highlighted "having to download the blockchain every time." as a mistake/misconception but didn't mention it in your comment? I know of wallets like Electrum and such where you don't have to wait long but it's still a mild annoyance for me.
Also, Coinbase offers a service called the 'Vault' which is essentially offline/cold storage
Of course they gonna cover the loss on their end only, you won't find any business willing to pay for customers' negligence. And it's up to each and everyone to make sure they understand the risks involved before they make any decision.
In the old days banks were being robbed all the time and people were wary of trusting them with their cash. I believe we're going through the same phase right now with Bitcoin and that it will get better as we get closer to going mainstream.
I understand that by having paper or local wallets, you control almost all aspects of your coins' security, I'm not arguing against that. It's just that for me, I would gladly trade off some of that security for the benefits offered by an online wallet service like Coinbase.