Not Your Keys, Not Your Coins

One of the reasons Bitcoin is so beneficial is that people can transact their coins without a third party helping or hindering their transaction. This value is possible due to Bitcoin's blockchain. However, since there's no third party like a government or a central bank backing your Bitcoin, a holder of Bitcoin puts themselves in danger of having their crypto stolen if they don't take the necessary steps to protecting it. But how is this done?

First, it's essential to understand that to send and receive Bitcoin, a holder must have a wallet in place - think of it as a digital storage place for your crypto. When you first get your Bitcoin wallet, you'll receive a public key and a private key. A user's public key allows them to be found on the servers to make transactions happen, while a private key is how an individual accesses their wallet. It's much easier to think of the two as an email address (public key) and a password for that email address (private key).

There are two primary ways to store your crypto. The first is through a hot wallet, and the second is through a cold wallet—more on distinguishing the two here.