Topic: Are cold wallets safer than online exchanges? (Read 598 times)

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.

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

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.

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.

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.

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.

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.

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.

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.

If we look at the cases that have occurred on several exchanges and perhaps the latest one that still sticks in our minds is the FTX exchange, we should be able to understand that storing assets on an exchange is a careless act even though the exchange has a big name but it does not rule out the possibility that could go bankrupt at any time. .

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.

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.


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.

The thing is that, excahges are non custodial and at that, the security of funds are left in the hands of the exchanges, and at anytime the wallet onwer could lose control of the funds if the exchange feels like the operator may have violated they rules or excahge deciding to close it door on the face of the owner with all the funds in it, we have seen multiple cases of excahges becoming exit scam and with users not being able to ever recover their funds.


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.

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.

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.

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.

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?

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 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.

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 think institutional investors don't store their funds on an exchange wallet for a long period of time, it is a foolish move honestly and I think they know that exchanges are prone to hacking compared to cold wallet. There are many times already that funds from exchanges had disappeared, hacked or misused by the exchange, there's no way that big institution will hold their money on something that is not safe unless they can earn or get some benefit from storing it there.

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.

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.

if i have a lot of cryptocurrency i will choose a cold wallet over an online exchange, that's because cold wallets have good security and i don't have to worry about losing my assets when the online exchange goes bankrupt.  because cold wallets are designed to provide extra security to users who don't want their assets to be lost and buying it when you have a lot of assets is the best investment.

A cold storage wallet is by far safer than a hot on online wallet as we know and for large investments, it is much more safer and lesser to be attacked by scammers or hackers wanting to steal ones funds without their prior notice.
Unless you are a trader who does so frequently, an offline or cold wallet is best suited for long term holdings and with the keys or seed phrases, it makes it easier to be etched on steel on stored on hard drives where no one can easily detect it and steal it.

I  choose cold wallet over online exchanges, if not for anything Security reason and against Fraud or hacking of my wallet because you do not really control it as anything can happen while in exchange. I have seen cases, People's wallet are hacked, compromised in exchanges and the exchange give silly excuses, if we really understand the necessity of Self-Custody then, Cold wallet is the right option to choose from OP.

Cold wallet over exchanges, so you have your seed phrase with you and take charge of your wallet, not entrusting it to any external factor which is also one of the fundamental reasons Bitcoin was created.

I hope you understand that there is a difference between Hardware wallet, cold wallet and exchange wallet/custodial wallet. The least place you want to keep your money is an exchange wallet because you don't have the private keys to that wallet and that means you can't authorize a transaction from the wallet since you don't own the private keys or seed phrase, this is why it's not advisable to store your coins on online exchange.

Cold wallets or hardware wallets are considered the best wallet to keep your coins because they are both offline and all your keys are managed offline but because hardware wallets sometimes are used to interact with Defi such as the web3, there is high possibility of your wallet been comprised with some malicious things that can make you lose your coins, not necessarily your private keys but somethings can make you sign some transactions which can make your wallet zero, this is why cold storage are the best since you don't sign anything on web3 or have to interact with a smart contract that will steal your coins, it's strictly offline.

Essentially, cold wallets are much more secure than centralized exchanges, and storing assets on cold wallets is in line with the cryptocurrency industry's criteria for decentralization. But that depends on each person because as you said. If we want to make money by being traders then we need to leave our money on exchanges because that is the only option we have so far. But if we are long-term holders, cold wallets will definitely always be the choice because the exchange is too risky and we do not have full control over our assets when stored on it.

In addition, the safety of our assets will depend largely on us and not entirely on cold wallets. I mean even if we use cold wallets, if we don't know how to store the seed phrase safely then our assets will not be safe.

People who intend to store cryptocurrency on centralized exchange account and consider it as their storage wallet, might change their minds after knowing about stories of Mt.Gox, Celcius, FTX and more stories in Exchange graveyard.

These exchanges rest in peace but people, their customers, who lost money by storing it on these RIP exchanges, would surely not have had peaceful and comfortable experience. It's painful experience for them.

Certainly an option to store it in offline wallets because the online crypto currency exchange is not a wallet.
People try to be safe for their assets, so choosing to save in an offline wallet is an obligation rather than submitting assets to those owners of the Exchange.


For people who are pro, they think of the convenience obtained without the need for a complicated process rather than prioritizing the security and control of assets.
Online, the risk is big and needs to be avoided.

Cold storage is 100% safer than storing your Bitcoin on an online exchange. Look what has happened in the past with Mtgox, Celsius, FTX plus many more. It’s boring & it gets repeated all the time but in crypto nothing is everas true as ‘Not your keys, not your coins.’

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.

Why would I keep it on exchange? I'm not a trader so basically I won't keep it there. For launchpools, airdrops? deposits and interests matters? Quite helpful but I don't want to entrust them with such amounts because they can just lock me there and delay my withdrawals if they want to. That's what happens to many huge depositors and remember that it is their money and the exchanges are giving them hard time when the time of withdrawal comes because they're asking for so much but they didn't do that upon deposits.

If you store bitcoins on centralized exchanges, you won't have to pay on-chain transaction fee when you sell, buy, sell, buy, means trading with your bitcoin but it's different if you move your bitcoins from exchange to another exchange, it's withdrawal. Withdrawal requires on chain transaction fee and exchange will charge you expensive withdrawal fee that includes some fees like on chain transaction fee, their wallet maintenance fee, service fee and many hidden fees they don't name.

People can think of it as it is attractive but there is risk like you said. Exchanges can stay next four years but they can bankrupt next year, we can not know their future.

We only can trust ourselves by controlling our private keys, controlling our bitcoins without dependence and uncertainty of centralized exchanges.

Nah, there are:
1. Transaction are off-chain, you don't have to pay fees for miner when you want to sell or move your coins.
2. Maximize your profit, holding 1 BTC for few years and sell it will make you earn a good amount of profit, but staking 1 BTC and give you like extra +0.1 BTC will make you to earn more.

But, it doesn't mean I will suggest people to hold their coins in exchange. I'm just telling the truth, if there are no pros, most people will avoid it, but we know most people hold in exchange.

There's no pros when it comes to storing your bitcoin in an online exchange, that will only beget you with nothing but misery because once you do that, it's not your bitcoin anymore, it's the exchange's bitcoin now and they've got the power to just quit the exchange and run away with all the cryptocurrencies that they have or they get hacked and your account becomes one of the victims of that hack. Just go for the safest which is the cold wallet, if you've got tons of money, you want to make sure that you're securing it in a way that is impenetrable and only a human error on your side could be the cause of losses.

Your fund safety should be your most concern, more than convenience when you store your bitcoins on centralized exchanges.

Convenience is clear but does it worth to take risk of losing your bitcoins if that centralized exchange goes bankruptcy or scam?

Reminder: do not keep your money in online accounts

The vital point for your fund security is "It's not your private keys, it's not your bitcoins".

Bitcoin Q&A: Not your Keys, Not your Coins. This is a 15-minute video and watching it can help you to get answers for following important questions.

Nope I would never prefer to keep my funds on an online Exchange. Because I already know that keeping funds on Exchange is nothing more than losing them, it has an almost 99% risk of being stolen, whether in the term of Exchange bankruptcy or a hacker attack. In both scenarios, you will fall victim to the loss of his funds. In spite of an offline cold wallet, you have been able to get rid of these two problems, namely, that neither your fund can be stolen easily nor you can be a victim of any hack easily.

I think there can be no pros except for taking trades. I mean That is, there is no other benefit to keeping funds on the exchange rather than trading. But keeping funds in exchange has too many cons

My opinion is that you should keep your funds in offline cold-air-gap wallet. With which you can keep your fund under full control. When you are under the ownership of the exchanges, if he wants, he can steal your funds or even get stuck without asking you.

For me, it's better to store your assets where no one can access them, and you can protect your assets from different scenarios. Meanwhile, if you store your assets in an exchange, there are some bad things that could happen. If you have been targeted by hackers, your assets can be stolen, or if an exchange malfunctions, you cannot access your assets. Yes, there are still advantages to storing your assets in an exchange, but when it comes to safety, cold wallets are the best option. You are the only one who has control over or access to it, as the wallet in which it will be stored has a physical body. You can bring it anywhere and anytime, but of course, as it is physical, you will need to keep it safe because your wallet can still be lost or stolen. So it's up to the owners, but for me, a cold wallet is the best option if you have the capability to purchase it.

     It is actually much safer to put your assets into a cold wallet. Now,  if you put your assets in a centralized exchange, just remember that you must also be prepared for the risk you may face because, in the first place, holding your assets is almost no different than putting money in the bank.

     That's why sometimes it seems like we don't have a choice and others don't know either. That's why others always say, Be careful and do it at your own risk.
And be prepared.

It is always advisable to store your coins in a wallet where you have full control of it. Hence, the question of the OP should be very easy to answer. It is not recommended in any way to store your coins in a crypto exchange, even if it is the top 1 exchange.

As most of crypto users know - "not your keys, not your coins." You will understand such phrase when you happen to lose your coins in an exchange hack or similar events.

Yes if I have large amount of assets such as bitcoin, I will rather store them on a hot wallet where I have total control of the wallet, most especially if I intend to keep them for a long term.


Sometimes one can buy bitcoin and keep it for let say 10 year without looking back to the wallet or how much it have generated, this way it a risk to save such bitcoin on an excahge wallet, so for long term holding, personal custodial wallet is the best choice.

What are the cons of storing a large amount of your coins in cold storage, i do not know of any cons, but only pros. Your money is in your control, it is safe if you know what you are doing, it is off the internet and not vulnerable to online attacks, etc. It is recommended to store your funds in an offline wallet, and only hold funds for spending on the go in your online wallet.

However, a crypto exchange should be used for trading only and shouldn't hold any of your funds for longer than the time you are trading.

Actually things like this may go back to their respective perspectives but indeed when talking about security I think everyone will agree that a cold wallet will be much more worth it than a wallet that has been provided by an online exchange considering that at least we don't have to worry that the assets we have are controlled or can be supervised by the exchange unless you want to try trading so the exchange will definitely be an option but when it is an investment then it will indeed be more worth it if it is stored in a cold wallet in the end.

But that does not mean that cold wallets will also directly avoid some fraud syndicates or hacks because after all about security issues in the end it is always a problem that is always discussed where we must realize that security problems depend on our foresight because even if it is stored in a hard wallet, cold wallet or exchange wallet even as long as you are negligent then it could endanger your assets.

The answer is that, it depends. It depends on what your intentions are with the assets. If you want the asset to be readily available when you need it without the need to access the wallet, acquire some other BTC / or gas if EVM to send out the asset in question, then it's an online exchange. But if you simply want to keep it and hold, then you should really opt for a cold wallet. The biggest drawdown with storing it directly on an exchange is that the exchange could close up at any time and there is nothing you can do about it. Nada. But with a cold wallet, you have full control and access to it at any time possible.

So here's my TLDR version.

• If you want it to be readily available and on demand, then store on an exchange.
• But if you're just going to hold it for a long time and not move it around a lot, definitely recommend a cold wallet

Choosing wallets must be done carefully and precisely, because this is related to the security of our assets and is also related to the possible fees that we will incur.

Well, if the condition is that I have a lot of assets and it is for long-term investment, then I would much prefer cold wallets or offline wallets to hot wallets. Because this is related to the security system and also control of our assets. In Cold wallet, we store our own exchange and it is offline so it will be much safer than holding them in any exchange. which means that online swallows or exchanges can cause various types of cyber crimes, which of course has also become one of the things to be wary of.

See and read or learn the following source taken to add more knowledge about hot wallets vs cold wallets.

More information about hot vs cold wallets can be read here:
https://thegww.com/hot-wallet-vs-cold-wallet-which-is-right-for-you/

I noticed you just joined our forum  - welcome! With a fresh set of eyes, you likely havent had the chance yet to poke around previous threads on securing your crypto holdings.  So let me drop some wisdom real quick. 

Cold storage wallets? Definitely the move for stacking sats long-term.  Exchanges make sense for active trading because convenience.  But for hodling? Nuhuh.  Not your keys, not your cheese!

If you are just dipping your toe into crypto, Id take a scroll through old threads about cold storage and hot versus cold wallets.  Plenty of handy know-how already up in here to help a newcomer.

Stay curious my friend!

It has been said multiple times on the forum here that coins shouldn’t be stored on exchange. If you store a coin on exchange, then it means you are not totally in control of your money and you can lose your coin at any moment, because no matter how reputable an exchange is, anything can happen to it at any moment. We have all seen different exchanges fail us in the past, and we should be expecting more in the future, so people will be losing money. The only time I do recommend that people leave their money on exchange is when they are trading with the money, but if you are not trading, then your funds should be in an offline wallet.

With a cold wallet, you have full control over your cryptocurrency, eliminating the need to rely on a third party for security. In contrast, online exchanges act as custodians, holding your cryptocurrency on your behalf.

Just a simple answer "NOT YOUR KEYS, NOT YOUR COIN", it is always better to keep your crypto in a wallet that you have full control.
Yes using an exchange or trading site would cut the transaction fee and time when you want to convert, sell or trade your crypto, but you don't have full control of the wallet and there are so many events before that trading or exchange got hacked.

An exchange is a place to buy and sell, not a place to store assets.
It's not really a matter of pros and cons, but about the security of the assets. If you store assets on an exchange, then the assets are not yours, but theirs. How is that possible? Because the address obtained from the exchange to receive and send is not controlled by us. We only have a password for access to the exchange that is registered using an active email.

This has been repeated because there have been many questions like this that have been asked.

 
Its not even a matter of weather it's safe or not. Just don't forget this not your keys not your coins. Yes you might feel like because you see the amount of funds displayed on your exchange account, you literally own the funds in that account but the truth is that you as an exchange users, creating an account with them is like giving them your funds to keep and do what ever they want with it.

For large amounts of funds, make sure to store them in cold storages. The risk of losing funds using cold storage is very low compared to another form of storage. As long as you keep your keys safe.

People who store their funds on exchanges account are mostly short term traders who performs daily transactions. But as a normal holder, short term or long term, you should avoid keeping funds in exchanges.

Yes, both has it's merits and demerits, but on a general scale, when it comes to safety and security of funds, I think cold wallets are more safer than crypto exchanges, because it offers you the access to have full control over your funds and its private key. However, there are several factors that will warrant one to choose which option, such as;
1. If you are a trader, and needs funds/coin for your daily trade, then keeping them in your exchange wallet is far better, as it saves you the stress of transferring funds too and fro using high fees.
2. If you are just an ordinary investor who wishes to just buy coin and hold for very long period of time, then storing it on a cold wallets is far better, as it grants you the full control over it.

So why are the exchanges gotten hacked? A Japanese exchange was hacked few days ago and it will not be the last exchange that would be hacked. Also many exchanges have been hacked before.

For faster withdrawal, exchanges have some or most of their coins on hot wallets. But some exchanges make use of multisig. I noticed OKX makes use of multisig wallet.

What would be the pros of storing bitcoin on exchanges? Convenience? Maybe easier trading?  But for large amounts, security trumps all that.

Cold storage is the way if security matters. Exchanges get hacked like every other week.  Poof - there goes your life savings in Bitcoin.  Not a good feeling, and convenience ain't worth that stress. But with cold storage, you control the keys. Only keep on exchanges what you're cool with losing.

Cold wallets or cold storage is the best wallets to keep large amount of funds. There are hardware wallets that are airgapped, or electrum airgapped cold storage wallets are good.

The exchange themselves in which people are keeping their funds in, are using cold storage wallet to keep their SAFU to prevent it from hackers.

Only traders should keep their coins in which they are using to trade in an exchange, apart from them nobody should think that an exchange is safe to keep funds. Exchanges are vulnerable to attack and they are in charge of your keys which means that your coins is not yet yours until you have withdrawn it from the exchange.

#Offline/Hardware wallet/Non-custodial would be the best - Or something that you do possess the PK of that wallet
#NOT YOUR KEYS NOT YOUR COINS- This has always been the primary rule when it comes to crypto possession.

This is why if you are trading up actively then you should really be just that putting on the amount that you would really be tending up to trade and not really that putting up all of your assets on an exchange
because you dont know on when shit things do happen. We've seen exchange hacks and other incidents on which it causes up for someone to lose up money and on the moment that you've been on such
condition then recovery would really be that so hard. This is why you should really be careful on where you would really be storing your coins with.

Always consider out on having that kind of securing your coins rather than on being that too confident with the current set up you do have. We wont know on when
unfortunate conditions do happen and this is why we should really be that careful.

I don't have large assets but I never keep them on exchanges, use cold wallets as more security because it is a safe way than exchanges are not so recommended.

Actually many people keep large amounts of assets on exchanges, there are several reasons behind it for them, trading becomes more instant as you can trade anytime, they can withdraw directly to fiat over exchanges and many more reasons.

If it is just for HODL it is better to use a cold wallet even if you spend more than $50 to buy a cold wallet but your assets will be safe as long as it can be a seed phrase.

You would have easily gotten this information by doing a quick search. Keeping large amounts in an exchange is risky because you can lose your funds if the exchange is ceased, go bankrupt, or suffer a hack. The funds you keep on centralized exchanges are not your own because you can lose them at any time. But people have come up with several reasons why they use it which include the ability to recover passwords and the ease of exchanging or trading. It is advisable to keep only small funds in exchanges
Decentralized cold wallets are suitable for keeping large funds because they are more dependable. You also have total control of your funds which makes it recommendable for long-term hodling. But if you lose your password or seed phrase you might lose your money.

One of the features I admire about crypto is decentralization so why would I use crypto if I were just going to do pretty much the same thing I was doing before which was entrusting my money to centralized banks. I would prefer to hold my own coins and if there are already quite a lot then I would store it somewhere discreet in a cold wallet to reduce or completely eliminate the possibility of hacks.

Do you want to store money your way and only you can access your funds or do you want to deposit them in the bank and depend on the bank? The bank can go bankrupt or freeze your assets at any time without prior notice to you while it is your money.

Similarly, using a cold wallet gives you full control over your assets, you are like your own bank, you will be responsible for the safety of your assets. Meanwhile, centralized exchanges are even riskier than banks. They can be attacked by hackers, go bankrupt, freeze your assets without notice or compensation to you. It will all depend on your preferences and choices.

Is their any benefit of keeping you coins in an exchange that could be compared with savings your coins in a cold storage wallet?.

Firstly I don't believe exchange wallets are really wallets infact they are classified as creating an account with an exchange which practically means you do not have power over you coins, that means exchange do not have wallet but an account which you register to keep your coins with them. "Not your keys not your coins".

Cold storage/offline wallets, I haven't seen anything that's better than having full control of your coins which this cold storages provides.  cold storage/offline wallets are the best way to store you coins, maybe the safest for now since their is nothibg with has been provided thst is more safer

There is no pro in storing coins in a online exchange, it is a blunder.

Aside from the coins that are on active orders, do not keep coins on exchanges because you do not hold their private keys and those coins can go into KYC-lockout/exchange hack and limbo and so on.

While coins on your own wallet are always ready to be accessed. Hence for storage, a wallet is always the best option.

This Is a question really easy to answer. I think also that this Is a basis about innovation bring by Bitcoin and the blockchain. There Is a simple motto "not your keys, not your coins". And you can understand why exchanges are less secure then cold wallet.
Great resource below...
Visit https://glacierprotocol.org/assets/glacier.pdf you will find the state-of-the-art guide on how to setup your cold wallet...so cold that they call "glacier"!

It depends. Am I using that money to trade? If not then I wouldn't want to hold my coins in an exchange as they are only recommended primarily for trading not holding. So if I had a large sum of bitcoin, I'd put it in a cold wallet safely secured somewhere that no one would know. However I'd still leave some coins in a wallet located on my phone for emergency purposes as they are more convenient.

It's not a pro and con but you keep large assets in a cold wallet so you have control over them, whereas if you keep them in an exchange then the exchange owner will control your assets.

I'm sure the majority of forum users here would advise you to use a cold wallet because it's safer, storing on an exchange is full of risks where the exchange can go bankrupt at any time.

One last message for you to read. Reminder: do not keep your money in online accounts

Yes, cold wallets are much more safer than storing them in exchanges, if you can imagine what I'm describing to you then you'd understand, picture cold wallets as something like safe in your house, you can store anything in that safe and only a handful can open it without forcing the safe to get to the inside and exchange wallets are like those informal lending that's organized by a group of your acquaintance in your work, they may say that it's safe but there's really nothing that's stopping them from running away with the money or risk the money being stolen because of a thief. So based on how I've described it, it basically means that your cold wallets might be the best thing for storing your bitcoins, just don't forget about how to access them or you'd end up like that dude that's suing the landfill because he can't find the laptop that contains a lot of bitcoin but I digress.

Always remember these saying: "Not your keys, not your coins."

If I had large amount of a cryptocurrency I would always keep that in a offline cold wallet with an air gapped system. There's no point to keep your cryptocurrency at an exchange unless you're a full time trader.

Even traders keep their investment in cold wallets and anyone who knows about Bitcoin and cryptocurrencies would prefer a cold wallet over an exchange's wallet.

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.