Conclusion: If you keep any cryptocurrency on an exchange or online service that can or is capable of controlling your private keys - MOVE all your cryptos to your own deterministic wallet YESTERDAY!
https://www.investopedia.com/news/new-bitcoin-malware-change...
Looks like he copy-pasted a corrupt version of the address. There are three transactions to this destination, from different exchanges.
- keep only (most of) my long term holds in my hardware wallets (e.g. NEO, OMG, ...)
- spread my shorter term holds over several exchanges
Storing your coins might be the best solution in theory, but in practice unless you're very savvy about the whole stack - hardware, OS, software and blockchain tech, it's hard to be sure you're not making a dumb mistake and exposing your whole stack.
Even hardware wallet can have vulnerabilities, and any form of "paper wallet" can be physically lost or destroyed.
My opinion is that you should hedge to make any loss tolerable, instead of trying to prevent it completely.
You're right on with your approach -- I think the answer is multiple wallets -- even multiple brands of hardware wallets, multiple exchanges, multiple computers, multiple different types of paper wallets stored in different places, even multiple cryptocurrencies in case one has a catastrophic issue.
The idea that one must download the entire blockchain makes maintaining a wallet very difficult
Electrum, Multibit to name a few.
As such, the wallet is super lightweight and easy for an average user.
Doesn't protect you from exchange hacks though.
Given that cryptocurrencies have become pretty mainstream and given the average level of technical literacy among the general public I can understand why some might prefer to keep their coins in somebody else's hands.