Topic: Are cold wallets safer than online exchanges? - page 2. (Read 621 times)

Online wallets are prone to hacking and much more with exchange wallets which is why it is highly advisable to use a Cold wallet as a storage wallet for the sake of security. Of course, we can't guarantee 100% safety assurance but at least, the chances are very slim compared to online wallets. Still, it is the way of keeping them safe matters a lot because if we are too careless, that makes no sense at all.
Aside from that - we never store all our funds in a single wallet for additional protection for not losing it all in case hacking become successful.

Trading is risky so always do trading with small capital, not all capital we have.
Storing money on centralized exchanges is risky too, so always store small capital on centralized exchanges.

Combine them together, the common recommendation is always store small capital we have on centralized exchanges for trading.

Two biggest barriers for safe practice. The first basic barrier is don't know about risk and the second barrier is knowing about risk and what is recommended safe practice but lack of determination to do such practice. Because they don't understand severity of risk and want to ignore risk to get convenience in practice.

People can use exchange account, wallet on exchange like their hot wallet and must have small money in hot wallet.

With hot wallet on exchanges, they can trade and with small capital in it, they will have smaller loss than if they store all money in hot wallet on centralized exchanges. Many risks at the same time, loss in trading and loss of capital by exchange problems.

because in principle the exchange is actually a place to convert or trade, not to store our assets. although I'm sure there are still those who do it (storing assets on the exchange), they definitely have their own reasons and they accept the risk.
Those who do this are not unaware of the risks or have not read history. they have that knowledge, but perhaps out of necessity, they still take that risk.

To minimize risk, it is better not to leave assets on the Exchange in large amounts or for long periods of time. if there is nothing you want to do with the assets on the exchange, such as make a trade. It is recommended to make a withdrawal immediately.
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.

I'd prefer to keep it in a cold storage. There's no debate about it. A cryptocurrency exchange is an exchange, a platform for those who are trading. So, if you aren't trading, you have no reason to keep your funds there.

The catch, however, is that a cold storage is only as safe as you make it. You are the sole owner, controller, and keeper. Such responsibility isn't light. One false move and it could cost you everything. So, it can't be overemphasized how important it is to know and understand the dos and don'ts of safekeeping your own coins. It's a must. It's even a prerequisite to owning Bitcoin.

Oh man, that landfill story is such a nightmare. How unfortunate for that guy. Always remember that an exchange is the absolute WORST place to leave your coins. Completely susceptible to getting hacked, either the exchange or yourself. With a cold storage wallet that is entirely offline there is no chance of getting hacked if you have it airgapped and take all the correct precautions. IF you're going to keep your coins on the exchanges then you're either converting your coins and getting them right off or you're trying to cash out or you're trading. Even if you're trading I would still convert whatever you need into whatever currency you want and them still take the extra step and send the funds back to your cold storage wallet for safekeeping until you're ready to swap them back into BTC or whatever or cash out.

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.

None is safe as even the cold wallet can still be attacked if you are very careless with it. But considering the pros and cons of both wallets, the cold wallet is safer. This does not mean that one should be careless with his cold wallet and still expect his bitcoins to be intact. As long as you are in possession of bitcoins, you are a potential target to scammers and they are always seeking for means to steal.
The rule still remains, save your bitcoins in cold wallets and send only what you need to the hot wallets so as to avoid losing everything you've laboured for. While you are trying to play safe with your choice of wallet, be vigilant too and keep your cold wallets safe.

I didn't know this page. The number of exchanges is insane. It doesn't mean that customers haven't been able to withdraw their funds or to get back them from another procedure though. In addition it doesn't explain how they've found the actual reason of those closings and how especially how they've decided which ones are exit scams/rug pulls and which ones are honest closing. More details would be welcomed to be able to get a relevent idea of the phenomenon IMO.
 

The only con of holding money in a hardware wallet is that you need some time to sell if you decide to do so. You can't sell bitcoin from a hardware wallet during crashes, which makes you vulnerable if you want to trade it and take advantage of volatility. That said, people who are like that should keep their money on exchanges the whole time.because hardware wallets aren't made for traders. You either put your money at risk in order to get a daily or weekly profit and realize that every single week, or you use bitcoin as a safety fund and a cold storage and you don't care about 5% swings.

Exchange is dangerous and it is not good that a large amount of assets should be kept there. The disadvantage of keeping them there is that if anything happens to the exchange all funds can be lost and you do not have any way to get them back since it is controlled by a central authority which is the owner and the dev. Also, a high number of attacks from crypto scammers were done through centralized exchanges compared to wallets.

Cold wallets should not be compared with exchanges, this are two totally different things.
You should never keep anything on centralized exchanges long term, and if you do this you have to know that this are not really your coins because you don't own the keys.
Only trader would have some excuse if they are trading all the time, but they should never trade with all their coins.

If it's a really large amount of money, I would prefer to put it in cold wallets compared to the exchange because you have more full control over your assets, while in the exchange you don't. Because the risk in the exchange, especially if it is centralized, is that it can shut down anytime, and when that happens, you have no choice but to wait, just like what happened with Ftx.

But if in the cold wallet way there is nothing like that, instead you really have control over your assets and there is no KYC that needs to be given, 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.

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I would definately prefer cold wallets because they can be more secure and as we can see now days the online wallets are being hacked and people are going through in everyday almost.
Not only wallets but blockchains are also being hacked and hijacked. We can see multiple incidents in the past and this arises a question that are our assets safe? Thats why cold storage is more likely prefered.

I prefer to hold large amounts of coins on a Cold wallet because I know how to create a cold wallet safely, how to back up seed phrases and store them in a secure way. In overall, I know how to keep my cold wallet safe. For a person like me, it's better to use cold wallet instead of online exchange. If you are a person who doesn't know how to create and use cold wallet, how to keep seed phrases safely and other details, then it's better to use online exchange. Many will argue with me cold wallet is better but in this case when person doesn't know how to create a cold wallet and how to keep Bitcoins safely, such a person will lose access to his bitcoins anyway, so in such a scenario, using an online exchange is a better choice but long-term, this will lead to the lose of your coins because exchanges often get hacked.

To sum up, learn how to create a cold wallet, how to keep your seed phrases safely and stick with cold wallet. If you don't know how to do it, then use an online exchange until you'll understand how to create and keep a cold wallet.

Cold wallets also have risks. Your cryptocurrency can still be attacked by hackers if you don't know how to preserve your cold wallet's private key/seed phrase. If your seed phrase is leaked, someone will also have access to your cold wallet, or worse, you will lose access to your assets if you lose your seed phrase. Everything has its own risks and the safety of your assets is up to you, not just using a cold wallet means your assets become inviolable.

But using cold wallets will be a more perfect choice because we have full control over our assets, whereas if we store them on centralized exchanges, we will lose some authority over our assets making it unsafe.

Like you said both have their strengths and weakness, and depending on how you choose to grow your money will tell how you  can store your coins...
If say you are a trader trading on the charts most likely an exchange will be appreciate, or say you are into p2p trading an exchange will be ideal as you want coin's  readily available for your business without having to waste your small profits on transaction fees, and if you aren't into trading and going for the old Skool way of letting price grow your portfolio.. then you can hodl in a cold wallet to have a peace of mind without worrying of an exchange closing or getting hacked.

Are cold wallets safer than online exchanges? Totally one of the crypto motto "Not your keys not your coin"

If you have a ton of coins, then a cold wallet is a must rather than plain put in an exchange. I mean cold wallet nowadays is pretty much cheap and can be bought anywhere. The pros is pretty much everything the cons is that your coins is idle there but crypto has significant growth so don't bother with and up and down.

The only use for online exchange is to bought the coins and that it

Undoubtedly, exchange wallets are much more risky than cold wallets. In particular, the access to the cold wallet can only be taken by the owner of the wallet, no other third party can take access to the cold wallet. So there is no risk in keeping Cryptocurrency in cold wallet. But if you keep cryptocurrency in the exchange wallet, the exchange authority can take access to that wallet apart from the user, so the cryptocurrency remains at risk for the user. So I am currently more interested in using cold wallets than exchange wallets.

Keeping such amount of cryptocurrency in an offline cold wallet will always be my first and only available option, and I do agree that storing crypto on online exchanges and offline cold wallet both have their pros and cons, but if you are well experienced in this space, you will agree with me that the pros of choosing to store your crypto on an offline cold wallet very much outweighs it's cons (if actually there is any con in choosing this option).

Over time in crypto, "Not your keys, not your crypto" have become a very popular slogan, which also have become the number one golden rule in cryptodom, this slogan teaches us that which ever wallet that you choose to keep your crypto on, which you are not in custody of the private keys or seed phrase to that wallet, it simply means that you have just successfully handed someone else your crypto to keep for you, and that person may decided to do anything with it, he or she may sell it, use it to do business, make huge profit through it and not pay you a dime as interest, or worst of it all, he or she may decide to run away with this funds, by simply moving the funds to another wallet that you have absolutely no access to.
So, it's always better to keep your crypto in a wallet where you and you alone have access and control the keys, and the best option in this regard is offline cold wallet.