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According to a 99Bitcoins video and some writing, Web Wallets are to be avoided because they are not secure.

Does that mean when you buy bitcoins on Robinhood, Coinbase, Coinbase Pro, Gemini, or even the trust GBTC, they are all Web Wallets?

I think Robinhood doesn't even allow us to move the private keys to our wallet, while Coinbase, Coinbase Pro, and Gemini do.

GBTC, I am not sure: if they store the bitcoins "cold" in their trust, then maybe it is not as insecure? Robinhood also said they store a good portion of their bitcoins "cold", and I suppose they only move a small portion to their platform to satisfy the trading or the exchange-for-cash?

So should we consider Robinhood, Coinbase, Coinbase Pro, Gemini, or GBTC Web Wallets and avoid using them for too long but should transfer the private keys into our own wallets?

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Does that mean when you buy bitcoins on Robinhood, Coinbase, Coinbase Pro, Gemini, or even the trust GBTC, they are all Web Wallets?

You can call them exchanges or web wallets but in both cases you don't hold the private keys and just looking at numbers based on the database used by website/app until you withdraw bitcoin to an address for which you own the private key.

GBTC is completely different from others but still you don't own any bitcoin private keys and you can read more about it here: https://grayscale.co/faq/

So should we consider Robinhood, Coinbase, Coinbase Pro, Gemini, or GBTC Web Wallets and avoid using them for too long but should transfer the private keys into our own wallets?

Keep only the funds that you need for trading on exchanges or willing to risk in case exchange gets hacked, shutdown etc. Withdraw everything else to your address for which you own the private keys.

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  • so I guess for example, keep $500 or $1000 on the Web Wallets, and the rest (and the majority into my own secure wallet, perhaps a hardware wallet). But I guess it is not possible with Robinhood or GTC, unless if I just sell (at Robinhood) and buy (at Coinbase) both at the same time, to "transfer" the bitcoin to somewhere that can be transferred to my wallet – nonopolarity Jan 31 at 13:22
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    Depends on the individual. I cannot give such advice however you should hold less amounts in hot wallets or keep only amount you need for trading on exchanges. Everything else should be in cold storage with multiple safe backups. – Prayank Jan 31 at 13:48
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    Keep on the exchanges the amount that you want to risk in trading (will be a different amount for each person); keep in a "web wallet" only the amount that you expect to spend before anyone can hack the private key or password from your device, or the website, to steal it from you. The rest, transfer from your web wallet/exchange to whatever form of "cold" storage (paper wallets, hardware wallets, whatever) you feel most secure with. – Robherc KV5ROB Jan 31 at 16:35

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