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.
One of the vital points to note down before venturing into the crypto space is that, once you are not in control of your private keys then that funds or assets does not belong to you because, you will have limited control over it and your funds can also be frozen. The reason why cold storage or hardware wallets are better is that, you assume 100% contorl of your funds, because you have the private keys and so far your keys are safe, you are secured but same cannot be said of online platforms or exchanges be it Coinbase or whatever, because if a security breach happens, you will be on your own in fact you will be reminded of the terms and conditions you agreed to which includes the risks associated with trading cryptocurrencies. Also, it is not an annoying question, it is good you asked and get enlightened hence taking every security caution. Lastly, many exchanges has been hacked and funds lost, even if the exchange want to refund, not all will be refunded.