Another (same old) reason to avoid centralized exchanges

Symmetrick

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Quote from: witcher_sense on November 03, 2021, 03:29:08 AM

Surely, when it comes to cryptocurrency trading, everything is different, everything is perceived differently, including the attitude towards matters of self-custody of your own keys, undergoing KYC procedures, privacy, anonymity, and security. It's all about compromises and sacrifices: you have to make them if you are to choose between the casual usage of cryptocurrency in your daily life and the professional usage of cryptocurrency in trading, investing, business... You can't stay anonymous while living off trading, you can't avoid KYC and other similar procedures, you can't retain privacy when filling out your tax form, you have to hand over your coins to access liquidity. However, those who are not traders can and probably should avoid taking risks of dealing with centralized entities.

Of course, all these admonitions about not your keys - not your coins, avoid KYC, avoid centralized exchanges, and in general any custodial services, they are more suitable for crypto investors. After all, why would an investor who holds cryptocurrency on his cold wallet need all this deanonymization and third party participation. But in trading, alas, you can't do without it. If you want to be a trader, get ready for KYC, centralization, and dependence on a third party. If you don't want to be a trader, be an investor. If I started my way in cryptocurrency now without trading, of course I wouldn't need all this centralization and I wouldn't pass KYC anywhere.

BD Crypto

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That's the main reason why I avoid centralized exchange. Because centralized exchanges aren't safe to hold crypto assets like a decentralized exchange. On the other hand, Decentralized exchanges are platforms that allow users to carry out trades without any intermediary. In terms of security, privacy, risk of being scammed decentralized exchanges are the only option to choose. There's an article where described the comparison between centralized and decentralized exchanges.

cryptoaddictchie

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Quote from: witcher_sense on November 03, 2021, 03:29:08 AM

You can't stay anonymous while living off trading, you can't avoid KYC and other similar procedures, you can't retain privacy when filling out your tax form, you have to hand over your coins to access liquidity. However, those who are not traders can and probably should avoid taking risks of dealing with centralized entities.

Completely agreed. Unless they are keep busy using fake accounts or buying someone identity for them to be able to use cex without touching their real identity which is sound terrible.

Quote from: Symmetrick on November 03, 2021, 03:33:32 AM

If you want to be a trader, get ready for KYC, centralization, and dependence on a third party. If you don't want to be a trader, be an investor. If I started my way in cryptocurrency now without trading, of course I wouldn't need all this centralization and I wouldn't pass KYC anywhere.

Thats the point. But there are some options to trade without KYC, but as you grow being a trader, you would noticed the difference of a good centralized market versus a non KYC exchange platform. Unless you are fond of using an autoswap dex line uniswap. Good point on this ratimov.

witcher_sense

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Quote from: ?? on ??

Yes, I agree here. On centralized exchanges, you should not keep all your funds and generally use the exchange as a wallet. This would be an extremely stupid decision. But still, in the case of trading, the phrase Not your keys, Not your coins! is not entirely applicable, since some part of the funds will have to be kept on the exchange. Those who claim that you can constantly withdraw and deposit funds in order to expose yourself to less risk, most likely never traded on the exchange, because this is still nonsense. But the frequency of conclusions still needs to be increased.

Surely, when it comes to cryptocurrency trading, everything is different, everything is perceived differently, including the attitude towards matters of self-custody of your own keys, undergoing KYC procedures, privacy, anonymity, and security. It's all about compromises and sacrifices: you have to make them if you are to choose between the casual usage of cryptocurrency in your daily life and the professional usage of cryptocurrency in trading, investing, business... You can't stay anonymous while living off trading, you can't avoid KYC and other similar procedures, you can't retain privacy when filling out your tax form, you have to hand over your coins to access liquidity. However, those who are not traders can and probably should avoid taking risks of dealing with centralized entities.

cryptoaddictchie

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Quote from: Bitcoin_Arena on November 02, 2021, 04:01:53 AM

Hey, I haven't insulted any trader still using Binance and haven't been fucked up by them yet, if that's how you might have interpreted it. All I am saying is that it's about time traders who are aware of the direction things are headed in binance start looking past it.

Regardless you haven't insulted or not some of those traders it's clearly you suggesting to stay away from it and use other which means you suggesting it's a bad one even if you didn't say it. I'm an old user of binance and I'm thinking majority also uses it. So to say its unwise to use it is depend on us mate whom experienced it right? We're literally aware of binance situation but everybody has their own downside it's just unfortunate for them. Anyway no offense taken there for your info. I just disagree that binance is just a fuck exchange compared to others platform. There could be some good or better alternatives but I haven't found a better contender with it.

Mind if I ask I'm sure you also uses it what are the negative aspect you experienced with the platform ( not the one you just heard somewhere)

Upgrade00

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I planned to lock up this thread, now, but there are some interesting replies, so I'll keep it open a bit longer.

Quote from: ?? on ??

You cannot compare centralized exchanges and decentralized exchanges, arguing that one is the decision of the other.

I was not comparing one or the other, only discussing a situation with using an exchange that has full control over your funds. If you noticed, I added an extra note on not storing funds on centralized exchanges for a long time if you really have a need for it that DEXes cannot offer, this includes different types of trades.

Also, liquidity is a direct result of the number of users, one of the reason centralized exchanges has high liquidity is cause more people use it when compared with a DEX.

BITCOIN4X

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Quote from: Upgrade00 on November 01, 2021, 11:29:08 AM

To users of centralized exchanges, this is not major news. Exchanges can limit withdrawals, block accounts etc, for whatever reason they deem fit and one would be prevented from using their funds deposited there.

If any investors and traders here read about it then I'm sure they will start considering it because storing large amount of money (any crypto asset) on a centralized exchange is always discouraged just because of the risks.

Apart from security and risk reason, I think a centralized exchange will form a partnership with the government so that our asset and profit will be very easily monitored by them. IMO, Government can periodically request data on centralized exchange to find out who may own large amount of asset due to their desire to prevent money laundering and other illegal activities even if it is about income taxes. So a centralized exchange is not the best and safe wallet for long term asset holding.

joker_josue

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We have to be aware that, increasingly, it will be difficult to find an exchange without KYC. Especially if you trade in fiat currency. Governments will increasingly force brokers to have this data if they want to have everything legal.

Taskford

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Quote from: Rikafip on November 02, 2021, 04:08:26 AM

Quote from: Bitcoin_Arena on November 02, 2021, 04:01:53 AM

Hey, I haven't insulted any trader still using Binance and haven't been fucked up by them yet, if that's how you might have interpreted it. All I am saying is that it's about time traders who are aware of the direction things are headed in binance start looking past it.

I am a long term Binance user, never had any big issues with them but still I think it is a good thing to look at the alternatives, and to be prepared. Not so long time ago Bittrex was top and well respected exchange and we can see how that ended up, and considering the way Binance is doing the business, sooner or later they might find themselves in a lot of trouble.

My alternative to Binance when it comes to centralized exchanges is FTX, and plan is to migrate to that one completely.

I'm also a long time Binance user and the only exchange where I trust my personal details and so far until now never encounter any issue by using at that platform. I am also bittrex user before but suddenly they change their terms which make them questionable and I don't like their implementation on KYC before since I don't trust them much compare on what binance achieve so far. Maybe in future we might gonna get a problem but the bottom line here is never deposit any huge amount if you don't trust the exchange or trade any if you don't have any idea on what you are doing.

aysg76

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This is the same case with these exchanges and what excuse will they deliver will be server crashes due to heavy traffic or there were some maintenance issues on the site but they are simply denying withdrawal because they are not having liquidations for the funds.They have all the keys to your bitcoins or any other coins and can easily use them or say spend them and when you try to withdraw they will put up this excuse.Like it happened at the time of meme coin or doge killer Shiba Inu hype and insane rise that investors were not able to withdraw all over the exchanges.But that's why we need to avoid them to the possible extent and use hardware wallets for our safety.So don't trust these centralised exchanges as whosoever is in custody of the keys is the sole owner of funds and rest you compromise your indentity with them thorough submission of KYC documents even for low withdrawals.But they will remain the same.

Rikafip

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Quote from: Bitcoin_Arena on November 02, 2021, 04:01:53 AM

Hey, I haven't insulted any trader still using Binance and haven't been fucked up by them yet, if that's how you might have interpreted it. All I am saying is that it's about time traders who are aware of the direction things are headed in binance start looking past it.

I am a long term Binance user, never had any big issues with them but still I think it is a good thing to look at the alternatives, and to be prepared. Not so long time ago Bittrex was top and well respected exchange and we can see how that ended up, and considering the way Binance is doing the business, sooner or later they might find themselves in a lot of trouble.

My alternative to Binance when it comes to centralized exchanges is FTX, and plan is to migrate to that one completely.

Bitcoin_Arena

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Quote from: cryptoaddictchie on November 01, 2021, 11:58:37 PM

I only used Binance for trading some major coins especially those who aren't erc20 and any l1 metamask package tokens. I have coins which have different chain that isn't present on some exchange or likely I don't trust some of the platform offering trading. Been binance users for a long time, and indeed no problem at all but minor issues which I could understand. So to say I'm not a wise trader? I don't think so, it depends on someone preference how they could handle such risk or factor.

Hey, I haven't insulted any trader still using Binance and haven't been fucked up by them yet, if that's how you might have interpreted it. All I am saying is that it's about time traders who are aware of the direction things are headed in binance start looking past it.

For example, ask this chap how they feel about binance right now, and we are all sure what his response might be.

joker_josue

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A popular Portuguese saying says:
"Never put all the eggs in one basket."

This idea is valid, for eggs... Roll Eyes

but also for all investments, whether in Bitcoin or not.
Therefore, you should never have a lot of money in exchanges, whether big or small.
Exchanges are for that very purpose, to exchange currencies. That's what they should be used for, and in that sense you should only have enough there to do that.

So, whether Binance or anyone else, we should only have the money we need there for our trades. It may be a high value, but never all you have.

dbc23

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In as much as we don't have much decentralized exchange and the few available aren't promoted just like the centralized exchanges this issues will keep arising. Exchanges implement most of this policies because they know 70% crypto investor uses centralized exchange. If we can use more of decentralized exchange this challenge would be limited

NeuroticFish

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Quote from: blatchcorn on November 02, 2021, 12:53:36 AM

Bitcoin was never designed for centralised exchanges, if you are going to deposit your coins to exchanges like binance then you need to be prepared for such things. My account was limited and I kyc was not approved on binance, they said someone else has attempted kyc with my ID ( wh is something impossible). It took me 3 complete days to fully activate my account.
P2P accounts are decentralized but they are prone to cyber stacks which are lesser in centralised exchanges.

Bitcoin was designed to pay without any third party. As simple as that.
From here on everybody can make his own use case and everybody has to pay attention that the other party of the deal/transaction is not malicious/scammer.

Quote from: Upgrade00 on November 01, 2021, 12:14:41 PM

It seems such a day is becoming less likely; more crypto users are getting comfortable using centralized exchanges which takes away the responsibility of building their funds themselves, at the cost of their privacy.

Unfortunately far too many have also proven that they cannot be careful with their keys, they cannot be careful with their funds, they cannot make any (financial) step without having support and insurance.

blatchcorn

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Bitcoin was never designed for centralised exchanges, if you are going to deposit your coins to exchanges like binance then you need to be prepared for such things. My account was limited and I kyc was not approved on binance, they said someone else has attempted kyc with my ID ( wh is something impossible). It took me 3 complete days to fully activate my account.
P2P accounts are decentralized but they are prone to cyber stacks which are lesser in centralised exchanges.

bittraffic

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The trading volume is what big traders need on Binance, if they keep doing this these traders will move to another or perhaps on DEX which is probably the reason why the volume on Dydx, Unisawp and Pancake getting higher.

If cryptopia had made it very difficult for us to claim our coins, so can binance. And there is nothing we can do unless you have withdrawn your coins already.

cryptoaddictchie

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Quote from: Porfirii on November 01, 2021, 03:58:34 PM

But hodling your coins in a centralised exchange you can get some interest for your coins.

This is a perks of staking on some centralized exchange like binance which absent on a personal wallet but in return those hassle withdrawal limit. Its up to you, to accept such consequence and perks.

Quote from: Bitcoin_Arena on November 01, 2021, 05:02:09 PM

A wise trader would avoid Binance and look for budding but reputable exchanges.

I only used Binance for trading some major coins especially those who aren't erc20 and any l1 metamask package tokens. I have coins which have different chain that isn't present on some exchange or likely I don't trust some of the platform offering trading. Been binance users for a long time, and indeed no problem at all but minor issues which I could understand. So to say I'm not a wise trader? I don't think so, it depends on someone preference how they could handle such risk or factor.

n0nce

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not your keys, not your coins!

Quote from: TheNineClub on November 01, 2021, 04:36:19 PM

The thing is, exchanges like that make it easier to do transactions on the fly, so that is a reasonable reason why people are holding money on it, but it's interesting how, at the end of the day, no decentralization can work without some amount of centralization. Maybe it has to be that way, but also maybe we can find some way to flip everything back to decentralised.

That's not true at all. Sending funds from an exchange account to somewhere else costs way more than what you'd pay when using your own wallet. Usually for Bitcoin, they charge around $5-10 per transaction, while on most days we can send with real wallets for around $0.08 per transaction. It's also faster, since when you send from an exchange account (withdrawing), they usually batch them and you may have to wait for a while until they aggregate enough transactions to submit.

It's also completely wrong that decentralization can't work without some amount of centralization. You can easily buy your Bitcoin on decentralized exchanges like https://bisq.network/, send the funds to a hardware wallet and there you go; all decentralized, easy, cheap and anonymous.

noorman0

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[Nope]No hype delivers more than hope

Centralized ones are usually designed to be as attractive as possible and will be improved because their features are flexible. DEX is also not the best choice for active traders because it is not cost efficient.

CEX is still superior in some ways, I wouldn't argue with those who use it, especially for trading reasons (I personally can't avoid it). CEX is just not good for storing large amounts and long term, staking is included in this. Even if you see their number increase, you can't do anything when their value decreases.

Topic: Another (same old) reason to avoid centralized exchanges (Read 279 times)