Levels of Bitcoin Security (ELI5)

Stuff I have learned, and simplified, to help the more confused of us right now.

Dangerous - Leveraged 3rd party Exchange. using any exchange that offers interest on bitcoin means your coins are leveraged and not your own. They may not even be real.

High Risk - 3rd party Custody. Bitcoin kept on a large exchange. Such as coinbase. Coinbase go under so do coins. Most have not yet given 100% proof that they are not part of the leveraged group.

Some Risk - Self custody coins on a USB device and app, such as Ledger, if ledger leak information you can be identified or if you use a shipcoin on the device it may open it to hackers.

Low Risk - Self Custody on a view only wallet like sparrow, use of cold card wallet or similar.

Lowest Risk - an airgapped wallet. Use an SD card to make the transfer on a device then plug into the airgapped device for signature before using that SD card back on the network. Your key is never on the network.

This list was collected by me asking questions in this Reddit group and also in the discord group. I have no doubt I've over simplified it, and that's deliberate. And for those who want to correct me please add information into the comments for others.

We want to drive adoption towards bitcoin not away from it.

Edit: Another Reddit member posted this great and more detailed view of different wallets:

https://www.reddit.com/r/Bitcoin/comments/zffjpb/for_what_its_worth_these_are_the_bitcoin_wallets/

Definitely worth a read.