The exchange is too unreliable! What should I do with Bitcoin?

To prevent hacker attacks and security breaches, Bitcoin users must have a variety of ways to control their assets. Here are a few simple but effective ways.

First, understand what Bitcoin is

Bitfinex’s security breach cost it nearly 7000万美元. The incident was painful but also a wake-up call for Bitcoin users. Some Bitcoin users ignored the fact that the exchange had been stolen multiple times and still relied on it to protect their funds, and the Bitfinex incident gave them a blow.

Before exploring the safe storage methods of cryptocurrencies such as Bitcoin, it is important to first understand that the Bitcoin network does not have a central institution like a bank.

The decentralized and transparent nature of the Bitcoin network makes it almost impossible to reverse a hacking incident. Therefore, we must have appropriate methods and strategies to ensure the safety of funds.

Purpose of the Exchange

The reason why Bitcoin exchanges exist is that they can provide users with the ability to trade Bitcoin with various assets and legal currencies (US dollars or euros). The payment methods provided by the exchange are relatively traditional, such as bank transfers, credit card transactions, checks, etc.

Although exchanges are responsible for ensuring the safety of user funds, they rely heavily on instant transactions on hot wallets to ensure the smooth progress of orders.

Therefore, users are advised to use exchanges to trade when necessary, but funds must be transferred to Bitcoin wallets in a timely manner at the end of the transaction.

Non-custodial wallets

Transferring Bitcoin from an exchange to a wallet is difficult for many technically naive users. For new users, they must understand that reliable Bitcoin wallet platforms will never attempt to control user funds. As long as they do not control your Bitcoins, hackers will have no way to do anything.

If you are more accustomed to using mobile wallet platforms, there are indeed a few safe and practical Bitcoin wallet apps. However, in essence, since these apps are built on the mobile service provider's system, if there is a problem with the system, then these apps are not so safe. Therefore, wallet platforms like Breadwallet, which do not rely on external servers and are directly connected to the Bitcoin network, are the safest and most reliable choice for users.

Cold storage and other methods

Several exchanges also provide cold storage services for users. Bitstamp and Kraken, for example, use both multi-signature technology and cold storage to manage user funds. If it is convenient, users can indeed choose cold storage to store bitcoin offline, which can reduce attacks to a certain extent.

Users can also use the API or services of cold storage wallet service providers to ensure the safety of their funds in the exchange. For example, Bitcoin hardware wallet service provider Trezor said that in order to ensure the safety of their funds, users are best to use Bitcoin cold storage hardware wallets such as Trezor or Ledger. At the same time, users can also directly embed Trezor accounts or embed secure login modes in APIs.

With our TREZOR Connect API, it is easy to connect to any Bitcoin service (exchange). This allows exchange users to create quick orders directly on TREZORs without the hassle of switching to other wallet providers.

As Bitcoin security companies and wallet service providers develop technology, more and more methods can be used to ensure the safety of funds. We must remember that Bitcoin is a public network that does not rely on any central authority. Therefore, users are responsible for the safety of their own funds.