Custodial vs. self-custody, and common beginner mistakes
When you buy bitcoin on an exchange like Coinbase or Kraken and leave it there, you're using a custodial wallet, the exchange holds the private keys on your behalf, similar to how a bank holds your dollars. This is convenient and fine for small amounts or active trading, but it reintroduces the exact trusted third party Bitcoin was designed to remove, if the exchange gets hacked, freezes withdrawals, or goes bankrupt, your bitcoin can be gone. Self-custody, moving funds to a wallet where you alone hold the private key, restores the 'no trusted middleman' property, at the cost of full personal responsibility for keeping that key safe.
The most common beginner mistakes all involve the private key or seed phrase leaving your control. Typing a seed phrase into a website, storing it in a cloud notes app, or reading it aloud on a screen-share are the top ways people get drained. Legitimate wallet support will never ask for your seed phrase, so any message, call, or pop-up requesting it is a scam by definition. Fake wallet apps, phishing links mimicking real exchanges, and 'giveaway' scams promising to double any bitcoin sent to an address are the other recurring patterns worth recognizing on sight.