Topic: are crypto owners naturally paranoid? - page 7. (Read 980 times)

Wouldn't agree on this one because when you do have that cold storage then it is really just normal for you to keep that HW on best as you can plus if ever that one breaks then you could still have an access if you do tend to import to other wallet.Why? as long you do have the Private key then you could
really always have that access.In HW you do only have that 2nd layer of security.

Unlike when you do store you coins on an exchange then once hacking incident happen then those coins are lost forever even just on having a simple
problem of scam on a certain platform and since you don't know the keys of the said wallet then you cant do anything much about it.

Well, the only reason you shouldn't keep your money into exchanges wallet are not just solely from hacking. There are some other factors that people recommends to prevent using exchanges for storing money such as downtime(that you can't access the website on certain time), fixed fees from the exchanges and etc.

I would rather store my small amount of money on the wallet that I can fully access than relying on third party to store my money even you think they are "well-known" to the community. It feels weird to store your money on third party that could steal your money anytime!

You are less likely to get hacked than an exchanges. Exchanges are targets of cybercriminals who are ready to use the most expensive zero-day vulnerabilities, because they can profit tens or hundreds of millions from a hack. You are not a target, because they don't even know about you and it's not easy to hack a cold storage or hardware wallet.

But hacking is just one of the risks, exchanges can also pull an exit scam, or the government can seize their funds, there can be regulations designed to lock you out of your funds and so on. The risks of self-custody are clear and low, the risks of trusting a third party can't be fully calculated.

Definitely, however the answer is for most people probably not. It requires discipline to actually secure your assets, but you could effectively make it 99% sure that your assets are safe with a offline wallet. Something which banks can't do. Banks have an issue with cyber attacks, as well as actual physical attacks, and being a public bank they actively broadcast they have a lot of money in their vaults.

As for exchange being breached, then history tells us that usually the customers are the ones to get hurt. You'll probably find it in their terms of service that they aren't responsible for any data or funds breaches. The fact is; the attack vector on banks, and exchanges are much larger than Billy Joe down the street who owns a couple of Bitcoin. Malicious users will always go for the biggest target, since they have more chance of actually coming out with something.

It's exactly why Microsoft Windows operating systems are targeted more by malicious code than Linux, though that changes when you get into servers. Though, most low level criminals are targeting the every day user, because it's the easy of the two.

There's something entirely wrong with trusting a third party to manage your money. Banks actually actively use their customers funds to make more money as a business. How else would they be able to offer interest? This can, and has gone wrong in the past. However, yeah the government has set up a system in most countries that they secure a certain amount of money in a bank. Though, they've only done this because they've acknowledged the risk in trusting someone else with your money. Plus, it's usually a small amount like 85k.

I guess for me I would much rather have $1000 bucks at bank of america than ten one hundred dollar bills at home in a dresser. Of course that's not a perfect analogy because the exchanges are not FDIC insured.

Perhaps in the future when crypto is more mainstream, crypto assets will be insured and backed by the banks and that will make cold wallets obsolete, or maybe I have no idea what I'm talking about.

Ahhh no. I'd rather lose my crypto funds due to my own fault than to let others do it, and have this feeling and expectation that they will reimburse me in the event that they got hacked or they mess up. Not your keys, not your coin. And not entrusting your coins to a third-party is not really being paranoid but rather just eliminating the possibility of letting others mess up your funds.

There are tons of cold storage options nowadays wherein the user doesn't have to be tech savvy at all. I'd rather get one of those than to let an exchange handle my funds for the long term. They can simply freeze my account and state some crazy things that I did not do and bam, I got my funds lost forever. One simple change on their ToS and I'm powerless over my own money.

Regarding the 'naturally paranoid' statement, I think you are on the money with that one, but it boils down to most of the BTC users being brought up in the earlier stages of the internet where there was little to no regulation and we have learned to become more suspicious, paranoid and aware of the dangers that the internet brings.

I/m not paranoid of anything to do with my personal wallets, the ones I have full
control of. I have the right precautions in place to make sure my private keys are
accessable by me and my family.

As regards exchanges, they should be used as such and if done so there would be
no need to be paranoid.

If you feel paranoid then you either know there is a threat as in the case of storing
your crypto somewhere you have ot got 100% control or you dont have the proper
security measures in place for your wallets.

Make it right and be confident

Thanks for the replies, it's very interesting, and I look forward to experimenting with the ledger nano X.

I know the online exchanges keep the private keys in "cold storage"-- so it comes down to can the average person keep the private keys safer than the professional corporations with huge amount of resources? In addition if there is a security breach, it seems like there would be a better chance of you coming out whole if your funds were on an exchange.

I have a large stock/mutual fund portfolio stored with Fidelity/Vanguard and never think twice about it, I guess the logical question is what's the fidelity or vanguard equivalent in the crypto space..

Paranoid is normal, it is better than get hacked and lose your money in every way we can get stolen. Mine get hacked once, but it is purely my mistake which i think my friend don't have problem with safety and i give him my private key and some of my exchanges id. And then his email got hacked and unfortunately all files is saved in his google cloud. Want to angry but can't because he get hacked too. For now i am saving my private key into harddrives and keep it by myself.

We're paranoid enough to not trust banks, though I think there's more than enough evidence out there throughout history that indicates trusting banks is one of the fundamental flaws of modern day society. So, you could call us paranoid or enlightened, whatever takes your fancy. Though, I'd say anyone who takes responsibility for their own assets, and doesn't give someone else permission to manage them is smart, not paranoid.

I wouldn't quite put it like that I'd say; depositing onto an exchange for a prolonged time (prolonged defined by more than it requires for you to immediately withdraw into fiat etc) is a bit like gambling, don't do it for unless you are prepared to lose it. Although, there's a major difference to gambling, and that's there's no real upside to storing on an exchange, whereas in gambling at least you could potentially benefit.

They are not being paranoid. If you own a large number of coins that's worth hundred thousands of dollars, you wouldn't want to hold it in an exchange. There is a probability that the exchange might get hacked. There is a chance the exchange might confiscate your funds even if you have done nothing. There is a chance that the exchange might freeze your funds because someone else did something and they somehow linked you into it. The coins you store in the exchange aren't yours. Not your keys, not your coins. If you hold the funds in a cold storage that you own, none of the above will happen other than getting scammed.

I guess being "paranoid" is why we have Bitcoin in the first. I wonder if those who trust the system so much will be able to create something as revolutionary and secure (secure, by the world standard) as Bitcoin.


By the way, I think it's better to have the keys inscribed on hard objects and buried in multiple places you can remember, than having them controlled by centralized exchanges.  
I hope people also realize the need to control their private/sensitive data in similar manner .

I'm sure many won't support this view, but I actually thought about it once. If an exchange is highly reputable, the money might be safer there. For instance, Binance was hacked, but it gave all the stolen money back to customers. If you somehow have your wallet compromised, nobody will do that. But if you mean messing up your cold storage in the sense of accidentally putting it in water or anything, it won't kill your money. As long as you have your passphrase, you can recover the money. If you mean losing your passphrase, it's a different thing, but you can store it in multiple places to ensure that you don't lose it. Also, while Binance has shown that it returns money to customers, they also imposed KYC now, and who knows what else they'll require over the years. So it's not like it's without its huge disadvantages. Not to mention that they might perform an exit scam or be terribly hacked at some point after all.

It's not safe neither convenient.

First off, let's define what's a cold wallet. It's money you want to spend in the far future, when the asset you're holding will be more appreciated than currently. When you give your bitcoins to the exchange, you're actually handing out your asset to receive liability which is considered a poor move.

Really, how can you be so sure that the exchange you've deposited your future won't shut down or get hacked within the next years? How can you feel more convenient knowing that others have your money? Don't you prefer to just write down a seed phrase and sleep easy knowing that only you're able to touch those coins?

That's the reason we have Bitcoin BTW.

No no and no, leaving your cryptocurrency on an exchange is the last place you want to leave it.  In regards to your question "are crypto owners naturally paranoid"..I would probably say no.  Most of crypto owners, just like most people, are inherently stupid..if we are being honest.  Most crypto owners don't do their homework or don't want to listen to good advice so they aren't as paranoid as they should be.

If you just want to store your coins a cold wallet is the best choice, because this way you have the assurance your money will be untouchable for how long you want. And I don't think there is a serious risk of messing everything up. You just need to be responsible and store your keys in a safe decent place. When you buy the physical wallet the company send you everything you need to keep the informations needed to access the device organized.

But since you mentioned blockfi, I suppose it's more convenient to deposit your funds in different online platforms, so your coins won't stay "idle". They will generate passive income while you don't use it.

from the previous cases i will learnd , it's better for me to store my bitcoins in a personal wallet than a third party, to be honest with the previous incident that made me paranoid about famous exchanges, because it would be the target of hackers,
I swear I'd go crazy if that happened to me

LMAO, that's a nice question and I think yes, crypto owners are indeed paranoid. Atleast the ones that I know are all as paranoid as me or may be more but not less.

Even if I would hold 0.001 BTC, I will prefer to hold it in a non-custodial wallet rather than on an exchange.
My wallet my coins. No wallet no coins. I just made that up and it makes sense 

I think all have a sense of worry, but at least don't make them up to severe fear.  If comparing Exchange wallets and Offline wallets as you mentioned Ledger Nano of course I choose to save in Ledger Nano. At least Ledger will make the wallet a little secure, because not every time connected to the internet and can be accessed by anyone at any time. Although I believe exhange wallet has also provided protection to its users, through GA, or AUTY. I think at the end of the day there's no need to be paranoid, you're just pretty careful.