Bitcoin wallet


farhad hossain asked 10 months ago

Why is it dangerous to keep all your cryptocurrencies in coinbase? What will happen if you keep your cryptocurrency in coinbase? Also, after you sell your fraction of a bitcoin can you withdraw that money or invest it back into bitcoin? When the price of bitcoin drops, will it cost less than before to buy a bitcoin? Am I too late into bitcoin?  What is the best digital wallet and is “coinbase vault” on your recommendations?
Thankyou

1 Answers
Steven Hay answered 10 months ago

Hi Farhad,
 
It’s dangerous to keep your bitcoins in any wallet to which you don’t control the private keys. This goes for online wallets, exchange wallets, gambling or game site wallets and even personal wallets on your own machine if you haven’t made a backup of their private keys. Major exchanges have been hacked or otherwise been taken down before – see Mt. Gox as the best known example – and people who had their coins on such exchanges have been very fortunate to get even a fraction of their coins back.
 
Yes, you can withdraw or reinvest your coins after selling on an exchange.
 
Yes, when the price of Bitcoin drops it becomes cheaper to buy, in other words the same amount of fiat currency can purchase a higher amount of Bitcoin.
 
I wouldn’t say you’re too late, no. I don’t think that even 1% of the world’s population is into cryptocurrencies yet.
 
The best wallet is probably a hardware wallet. They’re easy to use, even for newcomers, and provide excellent security so long as you create an accurate backup of your seed phrase and store it securely. Here’s a lot more on the topic of hardware wallets:
 

Here are the Winners for 2018’s Best Bitcoin Hardware Wallet


 
Coinbase Vault, hmm… I believe Coinbase used to offer a multisig vault service whereby you kept one private key and they kept another, perhaps with a 3rd “tiebreaker” key somewhere, although I believe this has been discontinued.
 
Coinbase have been rather damaging to the Bitcoin ecosystem of late, so I wouldn’t really recommend them as an exchange any longer. See here for alternatives:
 

2018’s Best Bitcoin Exchanges – Bitcoin exchange comparison & review

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