Bitcoin Exchange Hacks

One of the first things that come to mind when Bitcoin is mentioned, is that some exchange is hacked or someone lost money.  Then the plus sides are sometimes mentioned, if not at all.  Bitcoin has a lot of negative press because of the media focusing on Bitcoin exchanges not the real software behind it.  Many people like to store their Bitcoins in hot wallets, mainly for ease of use and ability to buy Bitcoins quickly. Hot wallets are not supposed to be used to store fund for long-term use, they really should only be used to hold Bitcoins that you bought before transferring them to another wallet.  All these people who lost money could have been fine if they didn’t keep large amounts of money in Bitcoin hot wallets (exchange web wallets).  If they used more secure methods of storing Bitcoin, they might never have lost it in the first place.  The easiest way to store Bitcoins cheaply and securely is  through paper wallets or cold storage.  Another safe and easy way to store Bitcoin is through a software wallet that is only on your computer, but that can be risky because of malware.  Oh and don’t forget to back up your wallet if you run it yourself, there wont be a third-party to save you in case your hard drive is destroyed.  Other than cold storage, the most secure way to hold Bitcoins is through the use of hardware wallets.  Two hardware wallets that you can currently purchase are Trezor and Ledger.  I will be getting a Trezor soon and have used the precursor to the Ledger wallet.  I really love using hardware wallets as they tend to offer the security needed to protect your coins while making the process of using Bitcoin streamlined.  For the best security no one should store long term amounts of Bitcoin in hot wallets of Bitcoin exchanges, as history shows exchanges are huge targets and even secure ones can be hacked.  I do not have any Bitcoins in wallets, when I buy Bitcoins I immediately transfer them to a wallet where I control the keys.

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