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I've been invested in btc, eth, and ltc for about a month on Coinbase. I'm still working to learn about this expansive realm. I don't totally understand the need for a wallet and how that works. Somehow I can keep my money growing in the exchange and keep them secure in a wallet? How do I do that and what should I use? I've also heard things about protecting your "keys". What are keys and what is the best way to protect them? Thank you for your answers!

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Private key: Your wallet stores the private key. With the private key, you can don transactions. Never give someone your private key or this person has controll over your coins. And: There are no bitcoins in your wallet. They are all saved as transactions in the decentalized blockchain!!

If you let your coins on the exchange, it means automaticly that you trust the exchange. If there is a security issue and all coin on the exchange are stolen, it's your problem. If you send them to an adress generated by the public key (also stored in your wallet), you only need to trust yourself. If there is a hardfork (Bitcoin-Cash-hardfork for example) and the coins are on the exchange, you don't have access until the exchange allows you to trade the BCH. So you should think wheather it's maybe usefull to store the BTC in your wallet instead of your exchange. But you could also wait a few months until the transaction fees are maybe lower.

The best way to protect your keys is letting them in your wallet and (of course) don't publish your private key.

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  • Where do I find my key? What wallet is easiest to use and the most secure?
    – Emmanuel Bailey
    Dec 24, 2017 at 23:10
  • You install a wallet and after that you have the opportunity to "create a new wallet". If you do that, your wallet generates a private key and a public key and (in most cases) already a few adresses. In my wallet programm, I can chose "Wallet->Private Key->Export" for example (if I want my private key). There are a bunch of wallet programs. I would recommend a desktop application (I'm using Electrum, but as I said: There are a lot more). But: An exchange handles more coins, a wallet is only able to manage the keys of 1 coin). So you need 1 wallet for LTC, 1 wallet for ETH and 1 wallet for BTC.
    – hardfork
    Dec 25, 2017 at 0:04
  • What do you think of Coinbase Vault?
    – Emmanuel Bailey
    Dec 25, 2017 at 2:32

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