How to Keep Your Bitcoin Safe
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Hackers can access crypto wallets and exchanges to steal funds, making secure storage and good digital habits essential. While cryptocurrency exchanges provide hot wallets for convenience, these are vulnerable to hacking, and stored crypto is not FDIC-insured. Experts recommend cold storage for better protection, though it carries risks such as potential loss of access if passwords are forgotten.
How to Keep Your Bitcoin Safe
- 1. Hackers can gain access to individuals’ crypto wallets or breach entire cryptocurrency exchanges to steal their holdings. That’s why it’s essential to store your crypto in a safe place, and practice good digital security habits. Cryptocurrency exchanges and third parties offer storage for your coins through hot wallets, which are secure, but still online (and therefore still susceptible to hacking). Crypto held on an exchange or in a wallet is not FDIC-insured like money in the bank. Make sure you trade and hold your crypto on a platform that offers robust security measures — including keeping a significant amount of holdings in its own cold storage and two- factor authentication for users. Some exchanges may even have private insurance policies in case of theft or hacking. For the best protection against online fraud, many experts recommend cold storage through an offline device not connected to the internet, similar to a USB drive. But even cold storage comes with risks, like the possibility of losing access to your investment completely if you forget your password.