It seems most bitcoiners prefer cold hardware wallets over online platforms but why is that? Considering platforms like coinbase are FDIC insured and have the best security in the business, it seems much riskier to try to secure my bitcoins on my own. I feel my house burning down or some other accident destroying my wallet is much more likely than losing it on Coinbase. And if there is a breach in coinbase, I get it back... so what am I missing?? While I’m not new to owning bitcoin, I am new to learning about it. So I apologize if this is an annoying newb question.
Coinbase only insures the % , they have in hot wallets, which is ~2% of the total they control.
The rest is in cold wallets that , that are not insured.
If you store funds with Coinbase, you are trusting their people to keep the coins secure.
If you keep your own wallet, they you are trusting yourself to keep the coins secure.
The problem is , most people, are not ready for a fire , flood, or even a simple thief that gains physical access to their home.
They may not even be ready if the hardware wallet fails. Or they may store their recovery phrase in a easy place for a criminal to discover.
You take risks either way, your decision is deciding whom do you think is going to better protect your coins in the long run.
* Not to mention if you die unexpectedly, your children can probably get access to your coins on coinbase by using your will and a court order,
while a cold wallet, where no one but you has access will be lost to them. *