If you are talking about storing Bitcoin then there is no advantage to choosing a centralized exchange. If you want to trade daily basis, then the advantage is you can sell your coin instantly. But it should be limited only for trading if you no need to trade, nothing advantage there.
On the other hand, storing Bitcoin in hardware means there is no disadvantage. You have full control of your funds. You can spend it anytime you want. Lately, hardware starts giving the option to swap your coin. So you can swap instantly from there as well.
In simple language, storing funds in exchange means you are storing funds in the centralized bank. They could freeze funds and happen bankrupt. Storing funds in a hardware wallet means you are strong in your own locker that only you have the key. So you must keep safe your key.
Topic: Exchange or hardware wallet ? - page 7. (Read 790 times)
Exchanges are not the right choice for storing crypto for a long period of time even the famous exchange. Storing your crypto on an exchange is like entrusting your crypto to someone else who has a big risk of losing it. hardware wallets are still the right choice for securely storing crypto where only you hold the key
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The foundation of cryptocurrency was built on freedom and decentralization and you achieve the freedom aspect of cryptocurrency foundation through hardware wallet (and other noncustodial wallets). This is the reason why the crypto community always advises people to make use of a noncustodial wallet because if not your keys it's not your coin and the major disadvantage of a hardware wallet is the stress of using it on a computer sometimes and you need to avoid the human error which could expose your wallet to danger.
The advantage of an exchange wallet is that it easy to use while the cons are that your holding can be stolen from you by the exchange itself, the exchange can also get hacked and you may need to go through KYC.
The advantage of an exchange wallet is that it easy to use while the cons are that your holding can be stolen from you by the exchange itself, the exchange can also get hacked and you may need to go through KYC.
What are the advantages and disadvantages of these two methods to store your coins?
Exchange itself is for exchanging and you shouldn't use it for keeping your assets especially for a long time.Hardware wallet just what everyone has said to you are safe with it as long as you don't publish the private keys on any online spreadsheet or notes. Just keep it offline.
Hardware wallet is the right choice to protect the assets you have, you don't need to use the internet to access a hardware wallet. for asset security, this wallet is considered more secure because without an internet network it makes it more difficult to hack. if you use the exchange market for security it is very risky even if you use 2FA Google authenticator because it is still using the internet network
Read:
tl;dr
- https://bitcointalksearch.org/topic/general-bitcoin-wallets-which-what-why-1631151
- https://cryptosec.info/wallets
tl;dr
- exchange gets hacked, you're screwed
- if you use a hardware wallet and not store your wallet's seed phrase digitally, your funds getting hacked is near impossible unless you make a big mistake
There is good example of this happening in the past and it was no one but the famous exchanger Binance which got hacked and millions were swiped in a blink of an eye. According to the sources around $40 million were stolen. Not only this, API token and 2FA codes were also got stolen by them. Imagine even with such high security by the binance it was not safe to keep the coins there. Now whether it was a conspiracy theory or real stuff I am not sure but things like can happen. Better go for hardware wallet.
Other than what mk4 said, could also be described as:
Exchanges - you let them manage your stuff, down from storing your funds to security.
Hardware wallet - you manage your own stuff, storage, security, transfer, etc. down to the last bit.
You can also compare it to how you have a knife. You give it to someone else, and you let them handle what's going to happen with it. You don't give it to someone else, you decide how it's used. It's like letting the responsibility fall to someone else (to lessen the burden for you, but also leaving it to the hand of others) vs using full responsibility for it yourself. Imo a hardware wallet defeats exchanges by a mile.
Exchanges - you let them manage your stuff, down from storing your funds to security.
Hardware wallet - you manage your own stuff, storage, security, transfer, etc. down to the last bit.
You can also compare it to how you have a knife. You give it to someone else, and you let them handle what's going to happen with it. You don't give it to someone else, you decide how it's used. It's like letting the responsibility fall to someone else (to lessen the burden for you, but also leaving it to the hand of others) vs using full responsibility for it yourself. Imo a hardware wallet defeats exchanges by a mile.
What are the advantages and disadvantages of these two methods to store your coins?
Storing your coins on an exchanges can be super risky as you do not have complete control over your funds in the exchanges. By complete control i mean that you should have access to your private key which exchanges do not give you. In case, the site is closed or hacked all your funds are lost.
Hardware wallets are the best way to store your crypto although you need to spend some money in buying a hardware wallet.
Hardware wallets will add an extra layer of security to protect your crypto if your computer is exposed to a virus or malware that can steal your private key using a key logger, they also protect you from tricks, for example, fake sites or those using phishing to try or retrieve the private key You.
and using a hardware wallet is a good way to keep control of your private keys while leaving them offline, and exchanges are not secure due to the possibility of being hacked or something unexpected happens that costs you.
and using a hardware wallet is a good way to keep control of your private keys while leaving them offline, and exchanges are not secure due to the possibility of being hacked or something unexpected happens that costs you.
Hardware wallet :
- You are in control of your own Seed. (VERY important)
- You can sign your own Bitcoin address for verification purposes and if you want to put a message on the Blockchain.
- No centralized entity can block your coins.
- No ToS requirements to use your coins. (Most Exchanges do not allow gambling)
- No KYC requirements
Exchanges :
- They control your Seed
- They will in most cases not sign your Bitcoin address, if it is needed for proof of ownership.
- They can block transfers to and from your account (Bitcoin address)
- You are forced to abide by strict Terms of agreements to use their service
- You are forced to link your true identity to your Bitcoin address. (stripping all your financial anonymity and privacy)
Easy decision ..... right.
- You are in control of your own Seed. (VERY important)
- You can sign your own Bitcoin address for verification purposes and if you want to put a message on the Blockchain.
- No centralized entity can block your coins.
- No ToS requirements to use your coins. (Most Exchanges do not allow gambling)
- No KYC requirements
Exchanges :
- They control your Seed
- They will in most cases not sign your Bitcoin address, if it is needed for proof of ownership.
- They can block transfers to and from your account (Bitcoin address)
- You are forced to abide by strict Terms of agreements to use their service
- You are forced to link your true identity to your Bitcoin address. (stripping all your financial anonymity and privacy)
Easy decision ..... right.
A hardware wallet is a little bit expensive than using exchanges but in terms of security, you'll never be in doubt of it. But try to be considerate if you have a huge amount to store coz it was just a waste of money. Like to know that using an exchanges wallet is as risky as we don't have full control of our wallet. But if you are just fine and are comfortable using an exchange wallet then there is no problem, it was your choice either but you know they are prone to hacking which might include your account.
for managing your own assets, hard wallets are the recommended choice. You don't have to worry about the exchange getting hacked, or other negative things. In addition, hard wallets are the most recommended thing for bitcoin or crypto users to keep their assets safe.
however, people sometimes choose exchanges as their repository because it is simpler to trade. however, if you can afford to have a hard wallet, it is more recommended.
however, people sometimes choose exchanges as their repository because it is simpler to trade. however, if you can afford to have a hard wallet, it is more recommended.
Read:
tl;dr
- https://bitcointalksearch.org/topic/general-bitcoin-wallets-which-what-why-1631151
- https://cryptosec.info/wallets
tl;dr
- exchange gets hacked, you're screwed
- if you use a hardware wallet and not store your wallet's seed phrase digitally, your funds getting hacked is near impossible unless you make a big mistake
What are the advantages and disadvantages of these two methods to store your coins?
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