Not only Bitcoin exchanges but Ethereum exchanges have been hacked since the days of Mount Gox. What is the lesson here? Do not leave your Bitcoin on an exchange. A popular saying these days among Bitcoin advocates is, “Not your keys. Not your Bitcoin”. The key being mentioned here is the cryptographic key that is connected to the digital wallet used for storing Bitcoin. Using an exchange, the keys to the Bitcoin are with the exchange. Andreas Antonopoulos is clear about this. If you do not control the keys, it is not your Bitcoin.

Risk management involves using good computer sense. Although there are hardware wallets that increase the security of digital money, they require correct usage. This means learning a bit about computer security. Loading a Bitcoin wallet onto a computer that is connected to the internet many hours a day may not be a good idea. If you are a person who is good with computer security your Bitcoin will be relatively safe. If not, learning the basics about computer security or getting a hardware wallet. Do some shopping around. There are other hardware wallets that are highly rated as well.

Selling and buying Bitcoin with individuals. Just like with any other commodity, you should only deal with trustworthy people. Buying and selling Bitcoin on Craigslist or other online trading systems comes with the common everyday risk. Only deal with people who have good online reviews. This may seem obvious, but Bitcoin is gaining in popularity and with that popularity come risks.