I believe that individuals who prioritize the secure storage of their digital currencies often opt for cold wallets. However, in the case of traders, it is common practice to allocate approximately one-third of their assets to a reputable exchange, while keeping the remainder in a cold wallet for added security.
A trader who plays short term, of course, in their daily life will definitely put it on the stock exchange, they just want to make a quick profit and then sell it if they make a profit. This is different from investors who save for the long term. I think if we invest in crypto, we should keep the assets we own ourselves, or store them in cold wallets, which are much safer than online exchanges. Don't put your trust in online exchanges. Cases like this have happened and we can never forget what happened on crypto exchanges. 
Topic: Are cold wallets safer than online exchanges? (Read 621 times)
offline cold is always safer then online exchange or wallet. When you hold large amounts of Bitcoin or other cryptocurrencies, you should go for a hardware wallet instead of using a software wallet. Because the hardware wallet will always be offline so in this case hackers will not be able to hack your crypto. Online non custodial wallets are also unhackable if you keep your private key secure. In this case, keeping a note of the private key offline is much safer.
Cold storage, offline, airgap, is best storage method, better than storing your bitcoin online in hot wallets. Exchange accounts are one of worst ways to store your bitcoin because first it is a hot wallet, and second but more important, it's not your private key, it's not your bitcoin. Exchanges own private keys of customer wallets, while customers don't own any private key.Reminder: do not keep your money in online accounts
If you had a large amount of cryptocurrency would you prefer to keep it on an offline cold wallet or an online cryptocurrency exchange?
Both have pros and cons.
I'm interested to hear the thoughts of others.
offline cold is always safer then online exchange or wallet. When you hold large amounts of Bitcoin or other cryptocurrencies, you should go for a hardware wallet instead of using a software wallet. Because the hardware wallet will always be offline so in this case hackers will not be able to hack your crypto. Online non custodial wallets are also unhackable if you keep your private key secure. In this case, keeping a note of the private key offline is much safer. Both have pros and cons.
I'm interested to hear the thoughts of others.
If you had a large amount of cryptocurrency would you prefer to keep it on an offline cold wallet or an online cryptocurrency exchange?
Both have pros and cons.
You can't even compare, exchanges are custodial but cold storage is non-custodial. If you look at the pros and cons of the two, you will discover that the cold storage outweighs the hot storage ( exchange) in most of them if not only in the expansiveness. The risk of cold storage is so little and it has proven to be the most secure way to store your crypto assets. The risk with the hot storage (exchange and others) will always be there because the crypto asset is in the gadget that is being connected to the internet, so anything can happen at any time.Both have pros and cons.
Although the cold storage is not entirely free from hacking, the possibility is so slim if used correctly. This is so nice to the extent that experts are calling it an "excellent" way to secure your crypto assets.
If you had a large amount of cryptocurrency would you prefer to keep it on an offline cold wallet or an online cryptocurrency exchange?
Both have pros and cons.
I'm interested to hear the thoughts of others.
Both have pros and cons.
I'm interested to hear the thoughts of others.
There is hardly any debate that self-custody is the better option. It might be slightly more convenient to use a centralized exchange, but the cons far outweigh the pros. Holding your own keys involves more responsibility but you can have peace of mind knowing your coins won’t be frozen or seized because of arbitrary compliance reasons.
Of course, both have their pros and cons, but we need to evaluate whether the benefits we get from storing bitcoin on centralized exchanges are worth the trade-off. I mean, with services like staking, lending...as you mentioned, and how much percentage will we get from that each month? 1% or 2% per month and is that worth the trade-off because we risk losing 100% of our assets? Meanwhile, storing bitcoins in a cold wallet will not generate passive income but in the long run can generate 100% or 1000% profit and your assets are also safer. Which do you think would be a better choice?
By lending your money to third party platforms you be making something between 4%-8% yearly, what gives an inferior monthly margin to 1%... Compared to the risks of losing 100% of your funds it definitely doesn't worth. It's better to keep your money safe in a cold wallet.Since there are no guarantees when investing in such platforms, this comparison is the final proof we need to reach the accurate conclusion of which storage method should be adopted: hardware wallets.
Even the legalized businesses aren't safe to invest your funds, as we saw in 2022 the scandals involving Celsius and FTX. Regards Celsius, investors were able to recover about 33% of their funds, but it's still a big loss after all. The interest generated until the scam happened just doesn't cover the losses faced by investors.
When we choose letting our money deposited at such websites we are aware about the high risks involved, therefore we shouldn't deposit all our money there, neither amounts of money we can't afford to lose.
In my opinion, unless we are day traders then we have no choice but to use and even store our funds on exchanges. For long-term holders, we should not just regret a few percent and face the risk of losing 100% of our capital when storing money on exchanges.
Cold wallets are not guaranteed to give us absolute safety because it depends on how we use them, but they are clearly many times safer than exchanges. Furthermore, don't forget our goal when entering this market is that in addition to making profits, we are tired of having to depend on banks to store our assets. So don't let yourself fall into that tired situation anymore by placing your trust in the exchanges.
If you had a large amount of cryptocurrency would you prefer to keep it on an offline cold wallet or an online cryptocurrency exchange?
Both have pros and cons.
I'm interested to hear the thoughts of others.
It doesn't matter if cryptocurrency is low or high I will always consider cold wallets more secure than exchange wallets. Because exchange wallet wallet authorities can access your Cryptos at any time but if you hold your assets in your own hardware wallet then no one can access your assets except you. Both have pros and cons.
I'm interested to hear the thoughts of others.
If you had a large amount of cryptocurrency would you prefer to keep it on an offline cold wallet or an online cryptocurrency exchange?
Both have pros and cons.
I'm interested to hear the thoughts of others.
But the pros and cons do not hold the same weight, storing a large amount of bitcoin requires that you do so on the safest way possible, so storing your coins offline will always be better than the alternative, now keeping a small amount at an exchange is reasonable as you never know when you may want to exchange those coins for another currency, gamble or buy something you may want, but it is unreasonable to keep all your coins at an exchange for that reason alone. Both have pros and cons.
I'm interested to hear the thoughts of others.
I know the main reason they don't make withdrawals every time is trading or fees that may be charged every time they want to make a transaction on the exchange.
Some people might not withdraw their assets from exchanges because of the fees but that shouldn't be a problem if the person isn't using those funds daily. If you have extra funds in your exchange wallet, and you are not using them for trading or staking purposes, then it is better to simply withdraw them and keep them in a non-custodial wallet.A few months ago, I heard or read somewhere over the internet that some institutional investors keep their funds in the exchange where they buy them, I think the reason was that they believe exchanges are safer than wallets but that isn't true in all cases because exchanges have higher odds of getting attacked by hackers so there can be negative consequences of doing that.
So saving in a non-custodial wallet is the best option, especially for large amounts. While I sometimes use a DCA strategy on exchanges, once every month or two I transfer to a non-custodial wallet.
In essence, no matter how many assets we have, don't get into the habit of storing assets on the stock exchange, we have to get used to prioritizing non-custodial wallets because we have control over ourselves or in other words we have our own bank so that the assets we own remain safe.
Some people might not withdraw their assets from exchanges because of the fees but that shouldn't be a problem if the person isn't using those funds daily. If you have extra funds in your exchange wallet, and you are not using them for trading or staking purposes, then it is better to simply withdraw them and keep them in a non-custodial wallet.
Will you prefer to lose the entire portfolio to exchange than to lose some cent-few dollars to some random group of people you know nothing about? I understand how some people think, they don't really understand how Bitcoin actually works under the hood, they just hear about it and want to hold it but know noting about how it operate, this is why scams looks easy to pass through them as they don't even know how to smell some dangers and what's is wrong from what is right.
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A few months ago, I heard or read somewhere over the internet that some institutional investors keep their funds in the exchange where they buy them, I think the reason was that they believe exchanges are safer than wallets but that isn't true in all cases because exchanges have higher odds of getting attacked by hackers so there can be negative consequences of doing that.
Only a lazy person that is used to how the banking system works will believe an exchange is a safe haven to keep coins, some people don't even know that doing this is selling privacy plus security. Only if it's mandatory for people to learn how Bitcoin works before they are allowed to buy them but the marketing push of centralized exchanges precede any knowledge been push for new people that are new to crypto.
but it depends on the trust you give to the exchange or how reputable it is, like Binance, Bitget, and Bybit. In short, do it at your own risk.
Take note that you should not trust any exchange or custodial service with your funds, no matter how reputable you believe the exchange is. Recent events have shown that any centralized exchange can collapse and even if they don't, they could still confiscate your funds for any reason at all. Store your funds only in your self custody, back up your seed phrase in a safe location and add extra layers of security.Much more also we have to know that when you store your bitcoin on a cold wallet, you have total control over the money and can use it at whatever time that the owner which to use such funds.
So there is a big difference between an exchange wallet and a cold wallet in terms of freedom and control of assets.
The biggest cons of having your funds inside a cold wallet, in my opinion, is the fact you aren't going to make any passive income from it.
Not really. You can earn passive income by simply holding an asset that works as an inflation hedge.
Many people don't understand what making money is. Let's say you hold an expensive necklace. You can put it to work and make women pay for being able to wear it at events, but you'll be taking a risk.
You can also put it in a safe place and because fiat money is being created out of thin air, the necklace will grow in value anyway.
I hold my bitcoin offline and it's worth more with every halving.
Of course, both have their pros and cons, but we need to evaluate whether the benefits we get from storing bitcoin on centralized exchanges are worth the trade-off. I mean, with services like staking, lending...as you mentioned, and how much percentage will we get from that each month? 1% or 2% per month and is that worth the trade-off because we risk losing 100% of our assets? Meanwhile, storing bitcoins in a cold wallet will not generate passive income but in the long run can generate 100% or 1000% profit and your assets are also safer. Which do you think would be a better choice?
By lending your money to third party platforms you be making something between 4%-8% yearly, what gives an inferior monthly margin to 1%... Compared to the risks of losing 100% of your funds it definitely doesn't worth. It's better to keep your money safe in a cold wallet.Since there are no guarantees when investing in such platforms, this comparison is the final proof we need to reach the accurate conclusion of which storage method should be adopted: hardware wallets.
Even the legalized businesses aren't safe to invest your funds, as we saw in 2022 the scandals involving Celsius and FTX. Regards Celsius, investors were able to recover about 33% of their funds, but it's still a big loss after all. The interest generated until the scam happened just doesn't cover the losses faced by investors.
When we choose letting our money deposited at such websites we are aware about the high risks involved, therefore we shouldn't deposit all our money there, neither amounts of money we can't afford to lose.
A few months ago, I heard or read somewhere over the internet that some institutional investors keep their funds in the exchange where they buy them, I think the reason was that they believe exchanges are safer than wallets but that isn't true in all cases because exchanges have higher odds of getting attacked by hackers so there can be negative consequences of doing that.
Reasons that are not based at all. I think they have a certain time to maintain their funds in the exchange because they also realize the risks that will be received if they continue to maintain a sum of money in the exchange.
Only investors do not know anything ready to lose some money. Maybe they only see convenience such as no need to pay shipping costs if the money is left stored on the exchange.
No matter how great the stock exchange and no matter how big the trust of a stock exchange, it's still not a good choice to save money online because the exchanges and cold wallets are two things that have a very large difference in function.
If you had a large amount of cryptocurrency would you prefer to keep it on an offline cold wallet or an online cryptocurrency exchange?
Both have pros and cons.
The biggest cons of having your funds inside a cold wallet, in my opinion, is the fact you aren't going to make any passive income from it. Meanwhile, at exchanges and similars, it's possible to make some extra income besides Bitcoin's positive fluctuations in price, through the interest these services pay to you for the coins under their custody.Both have pros and cons.
On the other hand, the cons of having your coins at third party platforms is the lack of guarantees and safety over your money. Although they pay an interest rate over your coins, you are under constant risk of being scammed and having your coins stolen by hackers or by the platforms' operators themselves.
In the end, it's better to just stick your money to a cold wallet, as it's safer, and even though you aren't making interest from it, you are assured your money isn't going to disappear due to you being hacked or scammed.
Despite the pros and cons, one needs to understand that an exchange is not a wallet and you are not supposed to use it as one. An exchange provides trading and related financial services to its customers, and only the funds that are being used for these services and activities should stay on the exchange any extra funds shouldn't be kept there just because it can keep the funds doesn't mean it should be used as a wallet.
The answer to this question is obvious, of course, I would use a cold wallet to store my cryptocurrencies that I aim to hold for the long term and have no plan on selling in the near future, if I plan to sell them then I will keep them in the exchange and sell them whenever I want to and then buy again with the funds, that means I will be trading and that's a different scenario.
The answer to this question is obvious, of course, I would use a cold wallet to store my cryptocurrencies that I aim to hold for the long term and have no plan on selling in the near future, if I plan to sell them then I will keep them in the exchange and sell them whenever I want to and then buy again with the funds, that means I will be trading and that's a different scenario.
If you had a large amount of cryptocurrency would you prefer to keep it on an offline cold wallet or an online cryptocurrency exchange?
Both have pros and cons.
The biggest cons of having your funds inside a cold wallet, in my opinion, is the fact you aren't going to make any passive income from it. Meanwhile, at exchanges and similars, it's possible to make some extra income besides Bitcoin's positive fluctuations in price, through the interest these services pay to you for the coins under their custody.Both have pros and cons.
On the other hand, the cons of having your coins at third party platforms is the lack of guarantees and safety over your money. Although they pay an interest rate over your coins, you are under constant risk of being scammed and having your coins stolen by hackers or by the platforms' operators themselves.
In the end, it's better to just stick your money to a cold wallet, as it's safer, and even though you aren't making interest from it, you are assured your money isn't going to disappear due to you being hacked or scammed.
Keeping your coins in an exchange is not a good idea. Keep them in a cold wallet for security reasons
I know the main reason they don't make withdrawals every time is trading or fees that may be charged every time they want to make a transaction on the exchange.
Some people might not withdraw their assets from exchanges because of the fees but that shouldn't be a problem if the person isn't using those funds daily. If you have extra funds in your exchange wallet, and you are not using them for trading or staking purposes, then it is better to simply withdraw them and keep them in a non-custodial wallet.A few months ago, I heard or read somewhere over the internet that some institutional investors keep their funds in the exchange where they buy them, I think the reason was that they believe exchanges are safer than wallets but that isn't true in all cases because exchanges have higher odds of getting attacked by hackers so there can be negative consequences of doing that.
I know the main reason they don't make withdrawals every time is trading or fees that may be charged every time they want to make a transaction on the exchange.
Some people might not withdraw their assets from exchanges because of the fees but that shouldn't be a problem if the person isn't using those funds daily. If you have extra funds in your exchange wallet, and you are not using them for trading or staking purposes, then it is better to simply withdraw them and keep them in a non-custodial wallet.A few months ago, I heard or read somewhere over the internet that some institutional investors keep their funds in the exchange where they buy them, I think the reason was that they believe exchanges are safer than wallets but that isn't true in all cases because exchanges have higher odds of getting attacked by hackers so there can be negative consequences of doing that.
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