Bitcoin Basics Series — Part 4
“But What If I Lose It?”
If I had a satoshi for every time someone asked me that… well, let’s just say I’d be stacking a lot of sats.
Here’s the truth: One of the biggest fears beginners have about Bitcoin isn’t buying it — it’s keeping it safe.
Maybe you’ve heard stories about exchanges getting hacked, or someone losing their password and being locked out forever.
It can sound intimidating to be sure.
But here’s the good news: Keeping your Bitcoin safe isn’t rocket science.
With a few simple habits, you can hold it securely and sleep easy at night.
Start Simple: Custodial Accounts
When you first dip your toe into Bitcoin, most people start on the big, well-known exchanges like Coinbase, Kraken, or Gemini. They’re widely recognized, easy to use, and viable options.
That said, my personal preference leans toward Bitcoin-only platforms like Cash App, Strike, Swan, and especially River — which is my #1 favorite.
Why?
Because it’s Bitcoin-only. No distractions, no gimmicks. Just Bitcoin.
Think of these custodial platforms like a checking account. Convenient. Accessible. Easy to get started.
Is it where you’d keep your life savings?
No.
But as a place to buy your first slice of Bitcoin and experiment a little?
Absolutely.
The important thing is not to get paralyzed by fear.
Start simple. You can always level up later.
“Not Your Keys, Not Your Coins”
There’s a saying in the Bitcoin world: “Not your keys, not your coins.”
Here’s what that means in plain English: If you don’t hold the private keys — the digital “passwords” that control your Bitcoin — then you don’t truly own it. You’re trusting someone else (like an exchange) to hold it for you.
And with that trust comes third-party risk.
It’s not unheard of for exchanges to get hacked and lose millions of dollars’ worth of Bitcoin and crypto. In the worst case, governments could even order those platforms to freeze accounts.
It’s like renting a storage unit. Your stuff is inside, but technically you don’t hold the keys to the lock. You’re trusting the company to give you access when you want it.
With Bitcoin, you have the option to move it out of that storage unit and into your own safe.
That’s where wallets come in.
“Hot” Wallets vs. “Cold” Wallets
There are 2 basic types of wallets, and each has its place:
- “Hot” Wallets → apps on your phone or computer. Great for small amounts or everyday spending. Quick, convenient, but connected to the internet (which makes them more vulnerable).
- “Cold” Wallets → hardware wallets or even paper backups stored offline. These are your long-term vaults. Much harder for anyone to hack because they’re not connected to the internet.
Think of it like this:
- “Hot” Wallet = your checking account. Money you might move in and out regularly.
- “Cold” Wallet = your savings vault. Money you set aside for the long haul.
Rule of thumb: Don’t keep more Bitcoin in a “hot” wallet than you’d be comfortable losing if your phone or computer were stolen. Just like you wouldn’t carry your entire net worth in cash in your pocket, don’t carry more sats in your “hot” wallet than you can afford to part with.
Most Bitcoiners use a mix of both — a little in “hot” wallets for convenience, the rest in “cold” storage for long-term security.
Common Sense Security Tips
Each of these is easily worth a full article of its own (and maybe I’ll cover them in this series).
But at a high level, here are a few simple rules of thumb that will keep you miles ahead of the average person:
- Never share your seed phrase. That’s the master key to your wallet.
- Don’t screenshot or store it in the cloud. Hackers love easy targets.
- Write it down on paper (or on a metal seedplate or something similar) and store it securely. (Check out seedplate.com if you want an example.)
- Use two-factor authentication (2FA) on any custodial account.
- Stay alert for scams. If something feels “off” or too good to be true, it is.
None of this is complicated. They’re just simple, practical habits.
The Sleep-Easy Principle
Here’s the big idea: Security doesn’t have to equal stress.
Owning Bitcoin is about empowerment, not paranoia. You don’t need to become a tech wizard or live in fear of losing everything.
You just need to set up a simple, layered system that you trust.
And if you’re feeling intimidated by all the new terms and tools?
That’s normal. Everybody feels that way at first.
Everything new is confusing at the beginning.
But like eating an elephant, you just take it one bite at a time.
Before you know it, you’ll look in the rearview mirror and think, “Wow, that wasn’t nearly as difficult as it seemed at first.”
Start where you are. Use a custodial app if that’s easiest.
When you’re ready, graduate to your own wallet. And eventually, consider a hardware wallet for long-term storage.
Every step you take gives you more control and more peace of mind.
The Takeaway
Bitcoin safety doesn’t have to be complicated.
- Start small.
- Learn the basics.
- Build confidence one step at a time.
Once you move your first sats into a wallet you control, you’ll feel it — that moment when you realize, “This is my money. Nobody can take it from me.”
That’s when the fear melts away and the empowerment kicks in.
What’s Ahead in This Series
This article is part of my Bitcoin Basics series…
In Part 1, we unpacked what Bitcoin actually is and why it’s not “internet money.” In Part 2, we looked at its scarcity — the 21 million cap. In Part 3, we cut through the noise on Bitcoin vs. “crypto.”
Now, in Part 4, you’ve got the essentials to keep your Bitcoin safe without losing sleep.
Next, we’ll talk about the mindset that separates long-term winners from short-term tourists: the HODL strategy. Why time horizon matters more than timing — and how to think like a Bitcoiner for the long run.
👉 Coming up in Part 5: “HODL 101: Why Long-Term Thinking Beats Chasing Prices.”