Why is cold storage better than coinbase?

Khaos77

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Quote from: Doubleflip7 on December 31, 2020, 12:10:32 AM

It seems most bitcoiners prefer cold hardware wallets over online platforms but why is that? Considering platforms like coinbase are FDIC insured and have the best security in the business, it seems much riskier to try to secure my bitcoins on my own. I feel my house burning down or some other accident destroying my wallet is much more likely than losing it on Coinbase. And if there is a breach in coinbase, I get it back... so what am I missing?? While I’m not new to owning bitcoin, I am new to learning about it. So I apologize if this is an annoying newb question.

Coinbase only insures the % , they have in hot wallets, which is ~2% of the total they control.
The rest is in cold wallets that , that are not insured.

If you store funds with Coinbase, you are trusting their people to keep the coins secure.
If you keep your own wallet, they you are trusting yourself to keep the coins secure.

The problem is , most people, are not ready for a fire , flood, or even a simple thief that gains physical access to their home.
They may not even be ready if the hardware wallet fails. Or they may store their recovery phrase in a easy place for a criminal to discover.

You take risks either way, your decision is deciding whom do you think is going to better protect your coins in the long run.

* Not to mention if you die unexpectedly, your children can probably get access to your coins on coinbase by using your will and a court order,
while a cold wallet, where no one but you has access will be lost to them. *

Shasha80

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Because online platforms are very prone to being hacked, there is evidence that there is an increasing number of exchanges and online wallets
that have been hacked. Moreover, online platforms like Coinbase, they store the user's private keys and at any time the user's account can be frozen,
so we don't fully have power over the coins we have. In contrast to hardware wallets as long as we keep our own private keys, and of course our
private keys are stored in a safe place. No need to worry about our hardware wallets, if they are damaged and burned. As long as we have the private
key is very safe, because it can perform recovery.

acener

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Quote from: Doubleflip7 on December 31, 2020, 12:10:32 AM

It seems most bitcoiners prefer cold hardware wallets over online platforms but why is that? Considering platforms like coinbase are FDIC insured and have the best security in the business, it seems much riskier to try to secure my bitcoins on my own. I feel my house burning down or some other accident destroying my wallet is much more likely than losing it on Coinbase. And if there is a breach in coinbase, I get it back... so what am I missing?? While I’m not new to owning bitcoin, I am new to learning about it. So I apologize if this is an annoying newb question.

We want privacy for our own that is why some of us are here in crypto and also you should know that "Not your Keys, Not your Coin" .
You could use whatever platform or wallet you want but always remember those words you don't have total control on your crypto and they are monitoring every transaction that you would have.
And not to mention that if we would have some fork in BTC you wouldn't get your reward in those centralized wallet like coinbase.

passwordnow

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Quote from: SmokerFace on February 23, 2021, 10:58:53 PM

For me, it's better to have strong privacy than paying the high transaction fee. Security always matters and cold storage win in that regards. I have a great experience with both wallets and I personally think that cold storage is more reliable in term of high security. Many exchanging are now getting hacks, and stolen the bitcoins is now easy because of less security of wallets

It has been said and we've got different good experiences about hardware wallets. In all of the time that I've used a hardware wallet, I didn't have any worry that my funds would be unsafe. The feeling of being secured is at best with hardware wallet. Whilst in exchanges or online wallets with Coinbase, soon you'll feel what we feel about keeping there as an unsafe place for your money. Several people have told you the importance of owning and holding your private keys.

bakasabo

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Cold storage wallet wont send you one day an update of terms of service, saying that starting from next month they will charge you extra fees for something. Or you wont face the fact that transaction service fee will be doubled.

Cold storage wont even produce a peep sound if you receive unusually huge amount of funds and will ask you to explain their origin.

Cold storage user will never be in situation, when third party sends a claim due to that all companies funds are frozen and are under investigation.

Rehan Zakir

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Cold storage means that Hardware Wallets.
Hardware wallets are offline wallets and keeping Bitcoins are safe in it. Because they are offline and no one can access it. Online wallets such as coinbase, hackers can easily access these wallets. But coinbase wallet has secured with multiple security layers. Hackers have to break all the security layers to access anyone wallet. They set these security layers to protect users wallets from Hackers

Sithara007

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Quote from: Doubleflip7 on December 31, 2020, 12:10:32 AM

It seems most bitcoiners prefer cold hardware wallets over online platforms but why is that? Considering platforms like coinbase are FDIC insured and have the best security in the business, it seems much riskier to try to secure my bitcoins on my own. I feel my house burning down or some other accident destroying my wallet is much more likely than losing it on Coinbase. And if there is a breach in coinbase, I get it back... so what am I missing?? While I’m not new to owning bitcoin, I am new to learning about it. So I apologize if this is an annoying newb question.

When you create paper wallet or hard-copy wallet backups, you normally create multiple copies and keep them in different locations. So even if your house burns down, you won't lose the access to your coins. However, there is a chance of it getting stolen and precautions need to be taken to prevent such a scenario. Coinbase on the other hand is not very trustworthy. They have close down user accounts and frozen the coins from time to time for silly reasons.

SmokerFace

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For me, it's better to have strong privacy than paying the high transaction fee. Security always matters and cold storage win in that regards. I have a great experience with both wallets and I personally think that cold storage is more reliable in term of high security. Many exchanging are now getting hacks, and stolen the bitcoins is now easy because of less security of wallets

Altcoinsintel

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Having a middleman was against the very idea of Bitcoin. Transactions should be P2P as it was intented any other way makes someone else control your money and authorize your transactions. PayPal, Coinbase and anything that acts as a third party just makes Bitcoin worthless and no different.

Since this is becoming the new norm then why not make it completely centralized then?

dre1982

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Quote from: rokon1234 on January 18, 2021, 12:48:45 AM

Cold hardware wallet is much trusted and secured than coinbase or other online wallet.because, online wallet have chance to hack or ban account.so, i think everyone should choice cold hardware wallet for better safety.

Yep I only use online wallets as a hot wallet. So to make small payments with.

I never had that much money in it because of your reason. It can be hacked or banned. Even there is a change that they run into other problems like hosting.

rokon1234

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Cold hardware wallet is much trusted and secured than coinbase or other online wallet.because, online wallet have chance to hack or ban account.so, i think everyone should choice cold hardware wallet for better safety.

Rasel5209

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Quote from: Doubleflip7 on December 31, 2020, 12:10:32 AM

It seems most bitcoiners prefer cold hardware wallets over online platforms but why is that? Considering platforms like coinbase are FDIC insured and have the best security in the business, it seems much riskier to try to secure my bitcoins on my own. I feel my house burning down or some other accident destroying my wallet is much more likely than losing it on Coinbase. And if there is a breach in coinbase, I get it back... so what am I missing?? While I’m not new to owning bitcoin, I am new to learning about it. So I apologize if this is an annoying newb question.

Cold hardware wallet don't possible to hack cause you can keep it without online. But coinbase is online so you will be hack.

Garant581

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Quote from: Doubleflip7 on December 31, 2020, 12:10:32 AM

It seems most bitcoiners prefer cold hardware wallets over online platforms but why is that? Considering platforms like coinbase are FDIC insured and have the best security in the business, it seems much riskier to try to secure my bitcoins on my own. I feel my house burning down or some other accident destroying my wallet is much more likely than losing it on Coinbase. And if there is a breach in coinbase, I get it back... so what am I missing?? While I’m not new to owning bitcoin, I am new to learning about it. So I apologize if this is an annoying newb question.

I did not know about insurance before, but I myself kept the cryptocurrency in the cold Trezor wallet, because I always believed that there was no way to get to it. It's funny that practically without dealing with cryptocurrency for 1.5 years, I even forgot how to create a bitcoin wallet ... Today it was a serious task for me!))

momchilandonov

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Coinbase can ban any account. You dont have private keys for your accounts on exchange. However, if you know your seed phrase, you can use any wallet as you want and your money is truly yours

imstillthebest

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your not new owning a btc but your new on learning it ? How was that possible and your lucky if you didn't loose most of your btc because of lack of knowledge .

Learning should come first before trying or you can do them together ,

you can own a btc and at the same time learn by doing research and try to increase your btc knowledge every single day and if you do that before , you will not came up with this question because you already know the important or the difference between the two kinds of wallets .

sujanpatil

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Quote from: Doubleflip7 on December 31, 2020, 12:10:32 AM

It seems most bitcoiners prefer cold hardware wallets over online platforms but why is that? Considering platforms like coinbase are FDIC insured and have the best security in the business, it seems much riskier to try to secure my bitcoins on my own. I feel my house burning down or some other accident destroying my wallet is much more likely than losing it on Coinbase. And if there is a breach in coinbase, I get it back... so what am I missing?? While I’m not new to owning bitcoin, I am new to learning about it. So I apologize if this is an annoying newb question.

Cold storage is the safest wallet. Because they are decentralized. Full control is in your hands. Online theft is less likely. If the wallet is damaged, the recovery seed can recover it. If you want to work, you can work by connecting to the computer. Now the topic is recovery word so you can keep it safe in the cloud. wallel means it must be kept in safe. The other thing is that you have to buy them.

Hippocrypto

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Quote from: acener on January 02, 2021, 02:08:14 AM

Quote from: Doubleflip7 on December 31, 2020, 12:10:32 AM

It seems most bitcoiners prefer cold hardware wallets over online platforms but why is that? Considering platforms like coinbase are FDIC insured and have the best security in the business, it seems much riskier to try to secure my bitcoins on my own. I feel my house burning down or some other accident destroying my wallet is much more likely than losing it on Coinbase. And if there is a breach in coinbase, I get it back... so what am I missing?? While I’m not new to owning bitcoin, I am new to learning about it. So I apologize if this is an annoying newb question.

The easiest and best answer would be "Not your keys, Not your coin" .
It is safer in the cold storage rather than online or mobile wallet which could be hack when your phone is infected with virus.
We have back up keys so we could recover what's inside the wallet if the device ends up being misplaced.

Online or mobile wallets had also a back-up keys which you can use as a backup, so it's not a big deal if either cold wallet or other else will be used. That always depends on your comfort or easy access on your funds. Most importantly, you're securing all the best options on how to manage your asset security. Nature calamity or any device potential loss is always possible, don't ignore those ideas and always think of some presumptions.

acener

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Quote from: Doubleflip7 on December 31, 2020, 12:10:32 AM

It seems most bitcoiners prefer cold hardware wallets over online platforms but why is that? Considering platforms like coinbase are FDIC insured and have the best security in the business, it seems much riskier to try to secure my bitcoins on my own. I feel my house burning down or some other accident destroying my wallet is much more likely than losing it on Coinbase. And if there is a breach in coinbase, I get it back... so what am I missing?? While I’m not new to owning bitcoin, I am new to learning about it. So I apologize if this is an annoying newb question.

The easiest and best answer would be "Not your keys, Not your coin" .
It is safer in the cold storage rather than online or mobile wallet which could be hack when your phone is infected with virus.
We have back up keys so we could recover what's inside the wallet if the device ends up being misplaced.

irixo10

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Quote from: Doubleflip7 on December 31, 2020, 12:10:32 AM

It seems most bitcoiners prefer cold hardware wallets over online platforms but why is that? Considering platforms like coinbase are FDIC insured and have the best security in the business, it seems much riskier to try to secure my bitcoins on my own. I feel my house burning down or some other accident destroying my wallet is much more likely than losing it on Coinbase. And if there is a breach in coinbase, I get it back... so what am I missing?? While I’m not new to owning bitcoin, I am new to learning about it. So I apologize if this is an annoying newb question.

One of the vital points to note down before venturing into the crypto space is that, once you are not in control of your private keys then that funds or assets does not belong to you because, you will have limited control over it and your funds can also be frozen. The reason why cold storage or hardware wallets are better is that, you assume 100% contorl of your funds, because you have the private keys and so far your keys are safe, you are secured but same cannot be said of online platforms or exchanges be it Coinbase or whatever, because if a security breach happens, you will be on your own in fact you will be reminded of the terms and conditions you agreed to which includes the risks associated with trading cryptocurrencies. Also, it is not an annoying question, it is good you asked and get enlightened hence taking every security caution. Lastly, many exchanges has been hacked and funds lost, even if the exchange want to refund, I don't think all will be refunded.

alexeev.tosha0109@yandex.

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Not your keys, not your coins. If you use cold wallets, you can be sure that no one has an acces to your funds. Storing crypto on exchanges means that you don't really own your private keys. Even non-custodial mobile wallets, for example Guarda, Lumi or Ownr, are better alternatives to using exchanges as a crypto wallet.

Topic: Why is cold storage better than coinbase? (Read 920 times)