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.
No, you still have unsure answer if Coinbase is hacked. They can reason that all funds were stolen by the hacker. It's best to keep your bitcoins alone, on a hardware wallet. What you only need to keep are those recovery seeds, other than that when you're accessing the wallet, you'll be asked to confirm your withdrawals or addresses for deposit which you need to do and be done on the hardware wallet. You don't own your private keys in Coinbase and you don't have control over it. 
Topic: Why is cold storage better than coinbase? - page 3. (Read 920 times)
All I know is, if you store your coins in coinbase, you don't have access to your private keys of your wallet. It is coinbase that has access to it. This means that you actually don't own the coins. Again, coinbase is centralized. This means if coinbase gets taken down, you might lose all your coins. Again, if your coinbase account isn't secured enough, and if your email gets hacked, chances of your coinbase account getting compromised is high. So many reasons why you should avoid coinbase if you wish to store coins for long term.
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.
To make it easy and simple I like to tell people it is more safer to have your coins in my possession in my lock box then it is to keep them on a exchange. This way I know my keys are in my possession and not someone else.
Even if I could someway lose my hard wallet in my lock box there is a better chance of a platform like Coinbase going down for long periods of time as happened many times in the past.
The platforms are insured like you say but it will still be a horrible process I think to go through a hassle to recover coins that were lost or hacked. It is okay to store some coins in a exchange in my opinion but only some and not all of them.
OP, check out: https://NotYourKeys.org/
Quite simple: Not your private key's? Not your coins!
You can't really trust online platform no matter how they promise to be secure. Who knows when something bad happens and they back out of their deal. Sure storing with yourself seems risky but if you do store it properly the chances of it being destroyed are pretty slim. I read a guide that allowed me to properly store my bitcoin, here https://mycryptoparadise.com/best-bitcoin-wallet-to-use-in-2020/
Cold storage is not prone to attacks online, the only risk of security for cold wallets is that it is physically stolen from you. Unlike Coinbase which locks some users accounts, you can access your funds anytime. You have to watchful because cold wallet are far more inconvenient when you are trading.
I understand that the online platforms are prone to cyber attacks but doesn’t the FDIC insurance make that a non issue? The frozen accounts thing is concerning. I wonder the reason?
I understand that the online platforms are prone to cyber attacks but doesn’t the FDIC insurance make that a non issue?
Coins at Coinbase are not FDIC insured, only fiat can be insured up to $250k this way.
The frozen accounts thing is concerning. I wonder the reason?
The reason is whatever they think a reason might be to do so.
I was under the impression that just your USD FIAT CASH was FDIC insured on Coinbase.
This is true for FDIC insurance, as digital currencies are not legal tenders, but there is an insurance for digital currencies stored in coinbase (hot wallet) and lost as a result of a breach in their security.I understand that the online platforms are prone to cyber attacks but doesn’t the FDIC insurance make that a non issue? The frozen accounts thing is concerning. I wonder the reason?
A breach is not the only risk when storing on an exchange, your funds are not under your control as such, you only spend them when the exchange allows you too. They can be frozen at any time *pending any investigation.Also, there is a privacy concern, as exchanges require you to pass KYC to transact in certain amounts. Coinbase in particular has been known to submit user details to government agencies to help blockchain analysis. This removes the pseudo anonymity in Bitcoin.
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.
Your Bitcoins are in your address and not stored on your 'wallet', so you can always recover it if anything happens to your device, as long as you backup your seed phrase.Creating multiple backups and storing in safe locations is a prerequisite for security.
Pretty simple. It's because you have the full authority to your coins. Hence the saying "Not your keys not your bitcoin". Using non-custodial has the possibility to lock or suspend your account for whatever reason. To some extent, aside from considering the security part of your holdings, people are using hardware wallet or even creating their own air-gapped device to improve not just the security but also the privacy of their holdings which is a missing factor in most of the exchange.
But still, putting much of your holdings on a centralized exchange is a big NO since it defeats the purpose bitcoin in the first place. You don't want your wealth to be controlled by banks isn't it? Then you should take a bit of effort to secure your money from intermediaries.
But still, putting much of your holdings on a centralized exchange is a big NO since it defeats the purpose bitcoin in the first place. You don't want your wealth to be controlled by banks isn't it? Then you should take a bit of effort to secure your money from intermediaries.
Cold wallet always I prefer because short wallet somewhere is risky to hold our assets and cold wallet is offline since we not been use. So I prefer cold wallet to use..
I was under the impression that just your USD FIAT CASH was FDIC insured on Coinbase.
Cold storage is not prone to attacks online, the only risk of security for cold wallets is that it is physically stolen from you. Unlike Coinbase which locks some users accounts, you can access your funds anytime. You have to watchful because cold wallet are far more inconvenient when you are trading.
I understand that the online platforms are prone to cyber attacks but doesn’t the FDIC insurance make that a non issue? The frozen accounts thing is concerning. I wonder the reason?
Cold storage is not prone to attacks online, the only risk of security for cold wallets is that it is physically stolen from you. Unlike Coinbase which locks some users accounts, you can access your funds anytime. You have to watchful because cold wallet are far more inconvenient when you are trading.
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.
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