Bitcoin was created to be owned by individuals without anyone else involved. To keep Bitcoin secure, people have to hold their keys themselves. That can seem tricky since most people depend on banks to defend their money from online and physical attacks, but keeping bitcoin safe has been made very simple.
Purpose-made devices like the original Trezor hardware wallet offer full independent control over bitcoin, easily. When people keep coins on custodial exchanges – ones that retain control of customers’ bitcoin until withdrawal – they fail to acknowledge the risk that the exchange may go bankrupt or simply take their funds. Bitcoin can and should be secured in a wallet that only the owner has access to, firmly in their hands.
Exchanges are convenient on-ramps to buy bitcoin, but bad places to store it. Cold storage is the most effective way to keep your bitcoin secure for the long term. A hardware wallet keeps your keys offline but still lets you access your money without needing to leave the safety of the Trezor ecosystem. This includes direct-to-custody purchases using the built-in exchange comparison tool from Invity, eliminating the need to risk giving custody to an exchange. By avoiding well as online and physical attacks can bitcoin be kept secure for the long term.
Risks of using an exchange
Even a tiny amount of bitcoin could be worth a lot one day. It is essential to know how to keep them safe for the long term.
Everyday money sits on a custodial exchange, there is a chance it could be lost forever. It is not just bankruptcy that poses a threat; the infamous Mt. Gox exchange was hacked in 2014, and people who kept their funds there still have not managed to access them since.
Saving in Bitcoin should be assessed from a long-term perspective. Anyone without full control of their keys should consider their coins at risk. The collapse of a major custodian might not happen now, but the risk is constantly there. The first step to take is to withdraw purchases regularly, but a better solution is to never have to leave bitcoin on an exchange in the first place!
How to withdraw coins from an exchange?
Thinking about long-term custody is essential when deciding to start saving in bitcoin. It is important to be able to generate a secure, unique address offline for each new transaction, so you can be sure only you will have control over it.
To generate a new address in your wallet:
- Go to your Bitcoin account and click on the Receive tab.
- Click on Show full address. Hardware wallets will also confirm the address on their screen.
- Copy the address to your clipboard.
- Paste the address into the Withdrawal address field shown on your exchange account. Confirm the characters match those shown in your wallet.
Withdrawing from specific exchanges
If you need more guidance on how to withdraw your coins, most exchanges do have a guide documenting the process. Check out some of them below:
The price of custody
Exchanges tend to charge more than just network fees for withdrawals. There is a premium for taking back custody that raises the overall cost of acquiring bitcoin.
To avoid these fees it is tempting to wait and withdraw more at once, but the longer the coins sit on the exchange, the greater the risk. The best way to stack for long-term savings and avoid excessive withdrawal fees is by buying direct to your wallet from non-custodial exchanges.
Bitcoin lets people truly own their money. It is no longer necessary to hand control over to a third party for protection. Securing Bitcoin may feel different from most people are used to, but it is simple and safe to secure alone. Get started easily and take control with a hardware wallet.
Disclaimer: This is a paid post and should not be treated as news/advice.
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