The 2 most important things are to have full control and a good backup of your bitcoin.
If you have bitcoin on a Bitcoin or crypto exchange, move it ASAP to your own Bitcoin wallet. Don't choose the trade-off for convenience. They make it easy to store your bitcoin and give low fees on each transaction you make. Below it will be explained how. Here are a few reasons why an exchange is a high risk:
They have full control over your bitcoin. If they're not giving you your bitcoin because it's seized, frozen or blocked, then you're out of luck. It's the same with money in your bank account.
Especially exchanges that also use crypto (every cryptocurrency other than Bitcoin).
A Bitcoin/crypto exchange can manage, hold, freeze or confiscate your bitcoin, depending on the regulations at the time:
Chainanalytics companies work with governments, as well as crypto exchanges, especially American ones such as, e.g., Coinbase, Binance, Bitfinex, Kraken and Gemini. Their goal is to link your identity with all your Bitcoin transactions.
Mopst crypto exchanges work with chain analytics companies to comply with regulations, prevent illegal activities such as money laundering and terrorist financing.
They can give bitcoin coming from a specific Bitcoin address a red signal that allows exchanges, usually from the government, to censor or even take away this Bitcoin transaction. The latter is only possible if it is through an exchange or through a Bitcoin wallet that you do not manage yourself.
Below are ways to obtain bitcoin without the use of a trusted party that could censor or ask for personally identifiable information:
When your bitcoin is on a Bitcoin or crypto exchange, then you do not own it. The exchange has total control. Just like your money in the bank. To truly own it is to have your bitcoin in a wallet you fully control, also called a non-custodial wallet.
Below are steps to create a bitcoin wallet you truly own:
If the government decides to censor this app via the Play Store (Android), then get an Android phone and download the app outside the Play Store on their Github releases page. Select the latest version and choose the .apk file. Download this file, open and install the app.
Write the words down on 2 pieces of paper and store them in 2 different places. Tap on the button "OK, I wrote it down".
When you sell stuff, products, services, money in your bank account or cash for bitcoin, then it needs to be send to a Bitcoin address:
You can copy the Bitcoin address and send it to the person that wants to send you bitcoin. You can also use this to send it from an exchange to your Bitcoin address and thereby moving your bitcoin out of the exchange and into a wallet you own and control.
When you give the address to someone else, they can enter the number of bitcoin. You can also make sure that they send you a specific amount of bitcoin. Do this by selecting the "Receive with amount" option on the Receive screen in Blue Wallet. Enter the amount in your currency or in bitcoin. Then the person that wants to send you bitcoin has to scan the QR-code. Inside the QR-code is the Bitcoin address including the amount.
After you've moved your bitcoin from your crypto exchange to your own wallet, the second most important step is to test your Bitcoin backup.
Don't worry, your bitcoin are not in your phone and they are not in your Bitcoin Wallet app. They are on the Bitcoin blockchain, also called the Bitcoin network. This is a network of computers worldwide running the Bitcoin software. Each computer keeps track of who owns what without using personally identifiable information. This means your bitcoin is on all these computers worldwide.