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Author: Admin | 2025-04-28
Phrase or write it on a piece of paper and keep it in a safe place. Never take a photo of or take a screenshot of your seed words.Read more: 4 Ways to Stay Safe in CryptoTypes of bitcoin walletsAlso, as with bank accounts, there are different types of wallets for storing your bitcoin, each offering its own set of pros and cons. In a broad sense, there are two main categories of bitcoin wallets:Hot wallets: These types of bitcoin wallets are connected to the internet and are typically available online or on your smartphone.Cold wallets: These types of bitcoin wallets cannot be accessed through the internet. They often involve physical devices (like a USB stick), where bitcoin and other cryptocurrencies can be stored securely offline.Hot walletsAlthough relatively less secure, hot wallets are the most popular in the crypto world because of their convenience. Because hot wallets are already connected to the internet, it means people can access and exchange funds quickly – something that’s important if you want to make quick trades when the crypto market is moving. Some popular examples in this category include mobile wallets (for example, BitPay), web or online wallets (for example, Coinbase) and desktop wallets (for example, Bitcoin Core).When you register on a cryptocurrency trading platform, a web wallet will be automatically created for you to store your bitcoin. One of the downsides of using web wallets on exchange platforms is your private keys are being held by a third party. Remember the front door key analogy? Now, imagine someone else owning the key to your house. If they wanted to, the owner of the key could decide to lock you out or someone could break in without your knowledge if the owner lets the key slip into the wrong hands.To put things in perspective, in 2019, the New Zealand-based exchange Cryptopia was hacked, and more than $17 million in ether and other cryptocurrencies was stolen, forcing the exchange to shut down. A former employee of the exchange was also convicted for stealing $170,000 in crypto by creating copies of Cryptopia's private keys and
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