Where should the obtained Bitcoin be stored/herd? Part 1 (Episode 9)

Serialized Column：From Zero: Cryptocurrency Trading：Episode 9

Where should digital currency like Bitcoin that has no banknotes or coins be stored (kept) after you buy or receive it?

Keep it on an Exchange

If you bought Bitcoin or other cryptocurrencies on an exchange, you can store and keep them there on the exchange as is.

That will probably become the norm. However,Counterparty Risk(risk of loss if an exchange fails, etc.) is something users should beware of, and those who do not trade daily tend to transfer to their own “wallet” for storage.

This is also a lesson from Mt. Gox. Although I do not know about that time, in crypto investing, the phrase “investment is your own responsibility” should perhaps be extended to say “storage is your own responsibility.”

Even if you keep it on the exchange, you should check whether the exchange has adopted at leastCold Walletto ensure security.

What is a Cold Wallet?

It is a mechanism in which the crypto assets such as Bitcoin that the exchange has custody of arestored in a completely offline environment not connected to the Internet.

This makes it impossible for malicious people to attack the servers and steal assets.

Mt. Gox, which collapsed, did not manage cold wallets in a fully offline state, so security was not ensured. But… there are rumors that it was a self-inflicted act...

For domestic exchanges,the previous articleis introduced, so please refer to it.

Which Exchanges Are Famous Overseas?

The most famous and highest-volume exchange is operated in the United States, Delaware: POLONIEX(Poloniex)

Here you can trade not only Bitcoin but also altcoins and other cryptos called Bitcoin 2.0, etc.

In addition to spot trading, margin trading is also possible. There are many promising cryptos that are not handled by Japanese exchanges (though there are many others that are not…).

These topics will further show how exciting and thrilling crypto investing can be, but I will write about each in future episodes, so please look forward to it. Next time, in the sequel, I will write about keeping in a “wallet” and its types!