Many people believe that Bitcoins come with the ultimate in online security. In truth, however, it's possible to lose your Bitcoins, or have them stolen. This doesn't mean that they are unsafe. It only means that as with cash, jewelry or other valuables, you need to be careful about their security.
Secrecy: The first rule of cryptocurrency security
When you buy a Bitcoin, you get a private key passphrase that helps you access the coin. It's never a good idea to share your private key with anyone. If you do it, chances are that you will lose control of the key, and the Bitcoin that it represents.
Using a third-party Bitcoin wallet can make keeping your money much simpler. Only two parties know your private key then -- you, and the company running the wallet. While a wallet offers convenience, there are risks involved there, as well. The company running the wallet could take control of your Bitcoins if they chose to do so. If you're using such a wallet, you need to make sure that the company is trustworthy.
If you own a large number of Bitcoins, using a hardware wallet is much better idea. Your money is bound to stay safer then.
You must be careful never to lose your Bitcoins
If you lose your private key for any reason, you lose access to your Bitcoins along with it. There have been numerous stories about such unfortunate incidents reported in the news over the years. In one case, a man in Britain accidentally threw away an old hard drive that contained private keys for $10 million worth of Bitcoins. He was never able to recover his coins. It's important to make multiple backup copies of your private keys, both online and off-line. read more
