Topic: "Funds are SAFU": Here we go again, but with Coinbase! (Read 602 times)

Statistics shows that less and less coins seem to be stored at exchanges, so at least those that have the most skin in the game are learning their lesson and storing those coins on their own, however it is very difficult for most people to forfeit the convenience that exchanges provide, since they are leaving the responsibility to store their coins to a third party, and since this is what they have done with banks all their lives, they do not see the problem to do this with their bitcoin as well, a mistaken posture without a doubt, but if they do not want to listen despite the repeated warnings we give, there is not much else we can do.

Quite clearly that is not happening. Investors are storing crypto in exchanges in order to free up space on their own PC/laptop hard drives but there are other options than downloading blockchains for each crypto.

Some people just never learn. I thought after the FTX crash people would actually stop keeping their coins on exchanges. At least most of them.

I think non-custodial storage is much better because I trust myself more than I trust corporations. I'm okay with taking responsibility for my own funds, and I understand the risks. However, I also understand that many people simply aren't like that. They're used to bank accounts and web banking, where you might lose your password many times, but successfully restore access to your funds by contacting support. They're used to losing their info and relying on someone else actually having access to it when it happens. If a company is big and seems highly reputable, they trust it more than they trust in their own abilities to not lose access to their funds.

Surely this is not the way to run a multi-billion USD$ company.

If their own customers are letting the world know about the problems they are facing, it shows they have problems. As already mentioned, maybe next time their customers might not even see their real balance again. And that does not apply to just Coinbase. People really need to start familiarising themselves with the words: not your key not your coins

Exactly how Coinbase found themselves in this public relations disaster will be investigated and steps taken to ensure it does not repeat itself otherwise Coinbase could end up losing more customers.

Thanks

As for the danger, there's none because I trade with registered brokers. These are guys that run physical exchanges in the area and trade metals, foreign currencies and cryptocurrencies. When you want to exchange a larger sum, you call them first to make a reservation and then you sit at an office and trade in a friendly atmosphere. The place I use is situated in an office building with its own underground car park and security. Nobody knows you're coming to exchange money and nobody can rob you on your way in or out.
Their fees are higher than what you'd pay trading on Coinbase or Binance, but there's no KYC and you don't get a bank transfer but cash that you can use however you like. IMO this is the safest and most anonymous way of trading.

The official Coinbase support account posted yesterday an update on X in this [tweet] that the glitch for customer balances has already been restored on the platform, but what I saw from the customer comments after this update indicates how completely inefficient this exchange platform is, One person mentioned he couldn't send/transfer to another wallet, another said he couldn't trade, another couldn't log in, some demanded compensation from the platform, and others mentioned their balances appeared lower than before. Indeed, Coinbase has become a joke now, and it is worth noting that this exchange, like any centralized exchange, is prone to technical errors and glitches, and those who pay the price for this are the people who hold their assets through third parties. They will fear and panic and lose the profits they made from the rise in Bitcoin due to increased traffic affecting the exchange's services and causing glitches, and they'll face delays until the platform's specialized team fixes this glitch. This matter may also happen again in the future, with Bitcoin achieving a new ATH. I agree with OP that this time, Coinbase customers were very lucky. Perhaps next time, it won't go as smoothly.

I like the way you captured the numbers. No matter who it was, losing 14% would definitely hurt and without a doubt even losing 1% would hurt if it was preventable. Keeping crypto on exchanges is a bad idea unless you deposit them with the intention of trading them immediately.

In your case, if you transact with a broker in person for cash rather than use centralised exchanges it means you have to be careful meeting buyers but other than that it is a good way because it removes dependency on exchanges.

Losing 14% would still hurt, right?
10% of a million is still 100k. It won't bankrupt you, but you can buy a very nice car with that, or a piece of land.
If you had that 14% in a physical item like a house and lose it, you'd feel it more I guess.
Also, you're talking like holding a small part of your investment on exchange makes it OK, while you could hold 0 and be completely safe.
I hold 0 on exchanges and haven't used a centralized exchange for years. When I want to sell I transact face 2 face with a broker.

You can buy Bitcoin as low as $10 worth of Bitcoin on any centralized exchange but I don't think Blackrock is going to allow them to do the same. I personally will allow them stay with centralized exchanges to experience a little feeling about how Bitcoin really works instead of us to lose all our people from centralized exchanges to ETF too. Who knows what will come later of Bitcoin ETF because I know for a certain that the government will one day come for them for not fulfilling one thing or the other, they are never bored of disturbing Bitcoin.

I thinks the network or server rather of Counbase is experiencing over load, this is the time when they experienced large number of people and it could even double coming to bitcoin halving day, they should upgrade their serve and stop disappointing people but it's strange that of all exchange, it's that of US that is under watch that is having such traffic.

So, the whole Coinbase "glitch" where folks saw their accounts vanish got everyone freaking out again, right? It's like a record player skipping, but instead of your favorite jam, it's your life savings on repeat. Scary stuff. This whole thing reignited the debate about keeping your crypto on exchanges versus those fancy non-custodial wallets. Let's break it down, homie to homie.

Exchanges are like the corner store for crypto. They're convenient, user-friendly, and have everything you need to buy, sell, and trade. Plus, they handle the technical stuff, perfect for crypto newbies. But here's the catch: you don't actually hold the keys to your crypto; the exchange does. This means if something goes wrong, like a hack or the exchange decides to say "adios," your coins could vanish faster than your phone battery at a music festival.

You hold the keys, which means you're in total control and nobody can touch your coins without your permission. Sounds good, right? But here's the thing: it's like carrying a briefcase full of cash – you gotta be extra careful not to lose it! These wallets require more technical know-how, and if you lose your keys, your crypto is gone forever, poof!

I had no problem with Coinbase or any exchange having such issues with these on important days. Because I don't keep my funds there but it's alarming that this keeps on happening. Selling through those integrated exchanges on wallets are way too high for the conversion because they get % for each sale and that's also regretting upon calculation of that amount. The customers can't do anything with this when another skyrocket happens and they show bugs because they don't want people pulling out their funds after selling it on them. That means that money flowing out of them also losing them money. That's why some technical maintenances are like their slowdown to their customers and to calm the fluctuation of visits on them. But that's unethical when it happens mostly on these bull runs that we're having. SEC or any agency of the government that are monitoring them should step in and force them to stop from doing it.

I don't think Binance will become Mt.Gox 2.0, it's the largest exchange in trading volume, and supposedly the most trusted one as well. If that happens, the whole cryptocurrency world will be permanently dented, no one would trust them anymore and they'd eventually collapse, along with other exchanges due to the chaos Binance's fall will cause. On the positive side, I don't believe it's a possible scenario, I highly doubt Binance would fall, however, I don't support storing large amounts on exchanges, despite their status.

If I remember correctly, two years ago they had a glitch but that glitch was very positive for customers. Georgian national currency was priced 100x more than it was. E.G. 1 USD was equal of Gel 290 instead of Gel 2.90 and that let Georgians to make 100x profit out of thin air.

Btw Binance had similar glitch in 2021 and even more dangerous was the moment when Bitcoin crash after Elon Musks's and China's statement and it was impossible to sell Bitcoin while the price was crashing and crashing because their servers and system went down.

Btw I don't understand why people ignore not your key not your coins advice. FTX went down and people still hold most of their coins on exchanges, so, this small glitch is not going to change their mind.

The sad thing is that in general many people simply do not learn. They have seen example after example of exchanges getting hacked yet they still opt to keep their crypto stored on them. Not your keys not your crypto does not seem to resonate with some people.

The best advice is to only use exchanges when you are about to trade otherwise there is no need to store crypto on exchanges.

The possibility of an exchange being hacked or the exchange's owners executing an exit scam is always present, despite the scenario being a bull or bear market. However, there will be more motivation and incentive to execute a hack or scam when there are higher potential rewards to be achieved by the thieves. It's logical (and obvious) to think thieves will prefer focusing their attention and effort to thick pockets than average pockets when choosing their victims to pickpocket.

I see this thread is about a day old, and I'm never really sure about the time difference between bitcointalk and NYC where Coinbase is traded on the NYSE, but today their stock is down 2.14% as of right now.  (note: I haven't read the last page of this thread; someone might have already mentioned that, but I doubt it)

That's probably due to Coinbase's little 'technical glitch'--which isn't a glitch but sheer incompetence on Coinbase's part.  And the people freaking out about this are probably ignorant about crypto and finance in general.  They might have thought they'd been hacked, but there's no way Coinbase would get away with either stealing funds or letting a customer's balance go to zero without explanation or reimbursement.  They are accountable to the SEC and who knows how many other government agencies, after all.

And no, people should not be storing their crypto on any exchange, even Coinbase.  But there's always going to be a non-zero number of people who do exactly that.

Your points doesn't make any sense.

If the hackers can hack an exchange regardless during bear season or bull season, they will do it ASAP.

If you meant people in general or criminals that attack with $5 wrench, someone can know your Bitcoin if you share it to other people, as long as you stay private, no one will know your holdings.

It's hard to completely get rid of exchanges from our routine in crypto universe. I used to keep all my funds in third party platforms, especially for passive income purposes, however, since the scandals involving big companies from the industry in 2022, I finally took the decision of withdrawing a large portion of my money from such websites and store it in a hardware wallet. Anyway, I still keep some funds in online platforms, although now I consider the risks to be more calculated and manageable than before.

If you store the largest portion of your funds safely, I don't think it's a big issue to let another portion of your money deposited at online platforms most of the time, although there are critical periods of time, such as when BTC skyrockets suddenly towards a new ATH level, for example. In times like this, it's a wise decision to store all your coins safely, due to Bitcoin becoming heavily targeted by everyone.

Today's glitch tomorrow's reality.

"Not your keys not your coins."

People will never learn it seems and I am not really different. I still hold some coins in an exchange even though I know that I shouldn't. But damn trading opportunities are so good and you can't make trades without you make a deposit first.

There are a few decentralized trading platforms, I should probably dig into those too.

Usually people just want convenient and ignore the possible risk they might encounter with those exchange since they are confident to much on that platform since they think they are reputable and there's nothing wrong will happen to them. But since the incident happened it make things clear that nothing safe and even that exchange has been compromised with hacking issue. They are just using the word SAFU just to make people calm but we don't know how big the damage they get internally. Although maybe for now there's no funds of costumer at risk but due to incident happen they should know that there's no safe after all and they should not trust those exchange so they better grab more reliable wallets especially if they want to hold their bitcoin for long period of time.

Today there is automation, hosts can easily add and remove servers or increase/decrease cloud infrastructure as and when traffic flows change in order to keep costs down while allowing for the website not be clogged by visitors. Why was it even a talking point when it came to the Coinbase CEO?

They are representatives of companies that pay them phenomenal amounts of money therefore CEOs should be making more careful when they make statements because their words have consequences. One of the things any trading website would have to prepare for is the possibility of spikes in traffic, ignoring or belittling it is not recommended.

They apparently upgraded their systems and can withstand 10x the amount of traffic. What I don’t understand is that why didn’t they prepare for this in the past? This happened so many times during crazy bullish or bear market moves and they knew it would happen again.

CEO said it’s a waste of money to have 10x more capacity when most of the time 1x is sufficient. I understand but at least have some workers who can monitor conditions and when they see it might be a crazy day then increase the capacity.

Imagine how much business they lost due to this.

It is about ratios.

Simple setup below

exchange 1) 10% max of your coins
exchange 2) 10% max of your coins

wallet 1) 40% of your coins.
wallet 2) 40 % of your coins.


I have zero issue using coinbase because I do not keep a lot of coins there.

I keep more cash which is insured by fed gov.

low coin which is not insured by fed gov.

So when coins case froze  I knew my usa cash was safe.

I always have a bit of coin on ladder sales.

but I never have it all at coinbase

or even half with coin base
or even a third with coin base
or even a quarter with coin base.

I have 14% on coinbase but most is in cash


6% of my investment is coin
8% of my investment is cash this is on coinbase

86% of my coins are in wallets

Correct. The problem occurs when many people want to sell Bitcoin when the price is high but don't want to bother with the rising price movement of BTC, in my opinion it's exactly as you said above, it's better to join an ETF and don't worry about protecting our own wallet and have to do very technical things, But what @NotATether said is also very true because it is often talked about and the importance of controlling your own coins without relying on exchanges.

At first, when we deposit our funds to this kind of centralized exchange, we already don't own our cryptocurrencies, what we only hold is the number saved to their database.
About this question, for sure they have some technical issues and do not lose their cryptocurrencies.

Funds are never safu on centralized platforms like cryptocurrency exchanges. CEXes are just bombs waiting to explode. Anyone who holds his/her Bitcoin on such a centralized exchange (or a custodial/closed source wallet) does not deserve to own Bitcoin. I have never liked the whole concept of re-centralizing decentralized money. That way it basically becomes a CBDC but with extra steps.  

And I would take anything exchanges tell me with a grain of salt. They are all criminals, or worse, crappy coders.

Not your keys, not your coins. I am always happy to see that phrase.  

Unfortunately, that's the convenient way and people love convenience. As a matter of fact, that seems to be their priority. If privacy and safety come with a hassle while trusting a third party is convenient, they would readily choose the latter.

Also, many people who are into Bitcoin, even knowledgeable ones, haven't actually gone into the Bitcoin rabbit hole. Their participation is superficial. That's why they easily recommend the likes of Coinbase and Binance and other custodial wallets that are popular. They're clueless. The danger is that some of them are influential and people would follow them.  

I don't get the reasoning. They're not some sort of role models we ought to follow. In fact, the term says nothing about how much they care about their security.

But to be fair, high volume traders (not necessarily a whale) don't have much choice because privacy oriented exchanges won't be able to handle their volume. I would say actual whales are more likely to go for OTC/private deals but yeah it doesn't mean there are no high volume trades on spot.

There's also a difference between keeping coins on exchange and just using it to trade so it's hard to say whether 'all' of these fellas are using the exchange as their long term storage.

Regardless of the severity of the glitch, or whether or not people are blowing it out of proportion, the question remains one of 'trust'.  Bitcoin was designed so that you don't need to rely on trust.  

However, all Coinbase users are choosing to rely on trust.  Each and every one of them, whether they realise it or not, is accepting that someone else is responsible for "their" balance (except it's not actually theirs).  This is precisely the thing that usually happens when you trust others.  As such, these are the consequences of their choices.  Coinbase users must live with the mistakes Coinbase make.  It's what they signed up for.  

Maybe this time was just a visual glitch.  But next time could be something more serious.  No custodian is immune to hacks, staff error, regulatory confiscation, etc.  Sooner or later, these things are going to happen and funds will be lost.  It's inevitable.  And if people can't reconcile that fact, stop trusting custodians.  Simple.

There are many reasons for that.

They don't trust bitcoin, think they'll be able to sell fast in case of crash if they have money on exchange.
They treat exchanges like banks and trust them the way they trust banks
They're afraid their homes aren't safe and don't believe in their ability to protect coins, which isn't that weird if you think about it. Many people in poor countries don't own computers. All they have is a phone and phones get stolen or lost, so they prefer to use a popular exchange.

It is appropriate for BTC to be stored in self custodial wallets and not in custodial wallets like exchange wallets.
In this incident their coins was not drained out of their wallets, it was a glitch that affected the exchange and displayed customers' balance as zero, even when they had funds in the exchange. Though nobody lost coins through this incident, but it is a warning that not your keys, not your coins.

Well lots of people aren't tech savvy but just heard Bitcoin is a good investment and don't feel like learning how to get their bitcoin off-exchange. Heck, I'm sure a lot of people don't even know enough about Bitcoin to know that you can take it off-exchange. My mom, who owns some Bitcoin back from 2017, occasionally freaks out about not having access to my Bitcoin because "what if I got in an accident and was unconscious had to use that money to pay for the hospital" haha. So occasionally she brings up the idea of me giving her access to my Bitcoin. And a couple years ago after I once again said no, she was like its okay if you are in a coma or something we can just make coinbase give us access. I was like ummm wtf you think I keep my bitcoin on Coinbase?! I was like of course I hold it all myself. Her response literally was, "how is that possible?". This was like 5 years after she bought Bitcoin, with a son who is all in on Bitcoin and retired early thanks to Bitcoin, and she didn't even know bitcoin is any different than say owning cash in a bank or like owning stock through a brokerage firm.

So while a lot of people definitely just don't want to bother learning how to hold bitcoin themselves, or don't want the responsibility of that and they trust the exchange company to do it for them, I'm sure a lot of people who have bitcoin don't have any clue what it is besides an investment and don't even realize you can take it off an exchange.

For some unknown reason, some people find exchanges to be safer than online wallets or even non-custodial wallets because I have seen a lot of people keeping their assets in exchanges even the ones that are kept idle and are being held, it is understandable if a person is using the assets kept in an exchange for usual trading activities because they can't withdraw and deposit the funds every day, but why keep idle assets in an exchange?
To be honest, I would also freak out if I'm keeping all my Bitcoins in an exchange and when I wake up in the morning some day and find out that I have nothing in my account. Even if it's a glitch, at least you wouldn't know at first until you see some news or Tweet or something about it.

Anyone who has used Coinbase for a long time should be used to this. There was no reason to freak out. During huge spikes in traffic when Coinbase starts not working well it is fairly common for balances to show as zero. I guess whatever API calls retrieve balance data tend to get not get through during super high traffic periods. I've noticed it several times in the past, its just annoying because it pretty much always happens on quick crashes and so it makes it so ya can't put in any trades on the crash. So when I saw my Coinbase balance at zero for a bit yesterday I was just like okay normal overflowing traffic conditions.

It's not being lucky, just a pretty typical thing that breaks when Coinbase can't handle to traffic load.

I'm sure most people who were freaking out do some trading, which is why they keep money on an exchange. And if you trade and you don't realize this is a normal thing that happens when Coinbase suffers extreme traffic, yeah of course you're gonna freak out about all your trading funds disappearing.

As far as I'm aware Coinbase has never been hacked, and has pretty much always been the safest crypto exchange. Which is why they can get away with higher trading fees than most exchanges, because they've earned people's trust over many years in an industry rife with hacks, and for traders you HAVE to keep money on an exchange so Coinbase is the safest place for traders. So anytime Coinbase is acting wonky and not showing things right its a pretty safe assumption its just temporarily glitching due to traffic overload. It would be nice after so many years of these sorts of things happening if they had figured out how to immediately scale up their servers to handle those times when traffic goes vertical, but I guess they aren't able to do it to the degree needed.

We all know the motto: not your keys, not your coins.

It is understandable that many people would not be in a position to download the whole blockchain but at the very least they could use Electrum in order to be sole users of their wallet. If investors do not have sole access to their crypto, it means any of the other parties that have access to them could effectively steal them (or be responsible for them being taken if there was a security lapse). Thankfully that did not happen in the case with Coinbase.

If they only trade and don't want their own wallet, shouldn't they move to an ETF instead?

A sad incident, it is appropriate for coins like BTC to be in private places and not in public places like on exchanges. Like what happened to this person whose balance was drained even though confirmation had been made. But, interestingly, is this purely the fault of user Abdullah Ghaffar @ihustlebro or a technical error from the exchange itself in my opinion would be very interesting to watch until the end.

It's because most of Bitcoin holders are know or interested with Bitcoin in 2017/2018 during Altcoins season and Bitcoin price able to reach $19K, it's a big milestone at that times. Mt.Gox was a biggest exchange during early days, but in 2014 they gets hacked and they're bankrupt. Most people not aware with this case, since they're know Bitcoin in 2017, it makes them always think Binance is the first, popular and biggest exchange, since they still exist until now, there's no problem to hold the coins on Binance.

So we're need to wait when Binance become Mt.Gox 2.0, I'm sure we will see a chaos.

It is not about exchange it is about the panic the exchange created as Bitcoin soared to $64000, which is why this topic is relevant to the Bitcoin board. If it was absolutely about an exchange glitch then I would have agreed with your reasoning. The glitch happened as a lot of users were trying to sell Bitcoin which is the reason why the Coinbase website and its app were not able to handle the traffic and users panicked more when they saw zero balance which caused them to halt all transactions of Bitcoin for a brief period.

I also have a decent amount of money on Binance due to Launchpool projects that I'm taking advantage of, but certainly not my entire balance; I keep my Bitcoin in a separate wallet, away from exchanges. However, although history has proven that incidents such as FTX occur (see Mt. Gox exchange and possibly others as well), my question is: how do whales trust them and keep balances worth millions stored in them? I've seen multiple sales of hundreds of dollars worth of cryptocurrency on Binance and other exchanges in real time, and honestly, it's an every-day phenomenon.

How do you respond and how do you explain this?

Edit: Right now, as we speak, there are Bitcoin transactions of over $300,000 on Binance, in a single transaction or over $1,000,000 trading stablecoins (see FDUSD/USDT), which means that there are people with a great sum of money stored on the exchange.

It is baffling that people still keep their entire balance inside exchanges after what happened to FTX. Like it was so bad, it was even publicized everywhere - and not just in the Scam Accusations or Exchanges section of the board by the way - but all over the news, and even the government, newspapers, and TV got on it, and the founder is now doing jail time.

It is like these people somehow expect that the exchanges will stop them from getting scammed by returning the money to their account like a bank.

These wallets are very easy to use even for a semi-illiterate. You will be surprised to know that most people don't even know that wallets exist. They assume that exchanges are the only means of keeping and trading cryptocurrencies. Some of them joined the crypto space because they want to make quick money so they are now concerned about learning anything about the sector.

This was how people felt that exchanges like FTX were solid and safe until the unexpected happened. Using exchange from trading is not wrong but keeping large sums in them is not safe.

You know why the cloud seems to be almost as brittle as Dave's production server? It's because all it takes to take down the infrastructure is just one bad line of code. That's it.

When everything else crashes because of that, chaos ensues. This really hasn't changed over the last 20 years. It's pretty much a fact of life that people always create bugs in their code.

It was just a visual glitch; their balance didn't suddenly disappear. I believe that you're overexaggerating and making unnecessary assumptions about the future. I doubt this is the first time it's happening, and I'm not solely talking about exchanges but any kind of financial institution. Even Metamask, a completely decentralized wallet, showed that my balance was zero multiple times due to visual or connection glitches. A quick look at an explorer was enough to confirm that my balance was still there, while the issue usually resolved itself with a few refreshes.
Money in exchanges is relatively safe; if they were as unsafe as people here portray them to be, no one would use them. In the meantime, billions of dollars worth of volume are transacted on Binance every day. I'm not recommending storing in exchanges, but sometimes it's necessary because people are actively using their funds.

Because of the responsibilities behind? Seriously, these people are used to be like that the same on the idea of how people handle their bank account/s — it's up to the banks now. They probably know what are the disadvantages but they just let it as they see more benefits of doing so in their POV, like insurance, assurance and whatnot like what banks do. Simply put they don't like the idea of "be your own bank".

i will never understand why a crypto exchange doesnt utilise crypto techniques of database/ledgers, to avoid such glitches
im not saying full on private blockchains for user database.. but at least some of the crypto techniques to preserve data

heck even decades ago "clouds" were suppose to be the answer to database glitches by decentralising the database so if one database is lost/glitched,  they can pull a copy instantly from another source as if the problem never happened/went unnoticed to customers

Reminder: do not keep your money in online accounts
Bitcoin Q&A: Not your keys, not your bitcoins.

Many Bitcoin Spot ETFs chose Coinbase as their Custodian.
https://blockworks.co/bitcoin-etf

Are ETFs better than self custody?

It makes no sense, because a software wallet like Electrum isn't something you lave to take lessons on how to use like it's a university course, it is literally just a software program like Google Chrome, VLC, and Adobe Reader.

Do you take lessons or tutorials to use any of those? Of course not. That is because they are intuitive to use. The same goes with wallet software. Except for full nodes but those are not included in this discussion.

There are even convenient non-custodial mobile wallets such as Trust Wallet, and Coinbase Wallet (LOL) which you can access by opening an app. There is literally no excuse for normal people to go to an exchange website and sign in in order to access your coins.

edit: missed a word

People are lazy. That's why. They must transfer their coins to a non-custodial or paper wallet for long-term safekeeping and storage.

Another event to show you that whatever is displayed in your exchange account is nothing but numbers, the exchange use your coins in fractional reserve scam and to make more money for themselves, the moment they lose that money, your funds is gone and the exchange files for bankruprcy.

However, good thing for Coinbase users that it was just a glitch, they said they are experiencing more trading in their platform as a result of the pump in BTC price. But it is still worth mentioning that even if this was a glitch, your funds should not be there in the first place, move your coins into your self custodial wallet as soon as possible.

You don’t need to be a tech savvy person to relate to what OP said, if you’re knowledgeable enough to buy any coin from the exchange you’re knowledgeable enough to take them out to your wallet. Leaving coins at exchanges is more of a convenience thing than a knowledge thing to me


We are not distinguishing the use of CEX here, that’s a privacy issue. One can use any exchange they want to get a coin but the warning is never ever leave your coin on an exchange no matter how big or how much liquidity you think they have. Using of DEX is to avoid KYC for privacy oriented people

In addition to the fact that most people are not tech-savvy, another reason is that people only consider bitcoin or cryptocurrency as a financial market, not too many people consider bitcoin as a place to store assets or a protect their assets.

In addition, a more interesting thing is that no matter what we say, CEX is always the place with the largest liquidity in the market. And for financial markets, liquidity is the most important thing. So it's no surprise that people will use it even if more centralized exchanges collapse like FTX.

What could be the reason? it's because their poor server can't hold high traffics?

Speaking of convenience, both of them are not really different.

When you use centralized exchange, you don't have to login because you've download their apps and login into your account, you will save your email and password in case you're forget.

When you use non custodial wallet, you also don't need to login anymore because you've import your seed phrase, and you've save your seed phrase.

The reason why people choose centralized exchange over non custodial wallet because they can stake their coins to earn interest, they're choose profit over security.

If a glitch causes customer balance to become zero, then I am afraid that more serious technical problems could make people lose all they have in these exchanges. Some people tend to learn lessons only when they have a bad or costly personal experience. We have had may issues with exchanges that would have made people avoid using these platforms as decentralized wallets.

Anyone who wants to invest in the cryptocurrency sector should be willing to do research. Information about the crypto space is all over the internet and anyone would understand how the system works. The comments by the CEO Binance is a common lie that can be dispelled easily by a simple Google search. Instead of reading, most people tend to rely on rumors or hearsay.

People can also easily be following lies. Example of the lie is when Binance former CEO CZ said funds on noncustodial wallet are not also that save that centralized exchanges are safe when he noticed high outflow of money from Binance to noncustodial wallet. Many people started not to send their coins from Binance to noncustodial wallet as the outflow reduced after he said that. Those words alone deceived many people.

At least 80% of the Bitcoin/crypto users aren't that tech savvy. I also think that at least 80% of all crypto users prefer convenience over safety. Maybe dealing with a centralized entity dives them a false sense of security. It's like having a bank account in a big and trustworthy bank. You think that all your problems will be solved and you trust the bank, simply because the bank is big and it has millions of users. The same thing applies to big crypto companies like Coinbase. In this case it was a technical glitch, but I really expect some big centralized crypto exchange to get hacked again and many crypto supporters waking up with $0 in their accounts.

The learning curve of self-custody is rather steep and probably daunting for many.

Self-custody is a simple thing for me to do now because I have been doing it for so long (many years).
But it was not a simple thing to learn at first. There is definitely a learning curve.

Good thing there is now a spot ETF available that makes the buying and holding process much simpler for those who can't or won't get into the weeds of self-custody.


 

 

That's depressing when they've got thousands to even millions there, but wait, why keep that amount there?

Their similar answers will be, it's easy to store there, a trusted company and can easily dump it when you want to.

It won't justify any security matters and they understand that they have no private keys that they're holding there and yet, they're still there keeping their bitcoins on exchanges. Glad that it's just a glitch.

Those people that keep their coins in an exchange are gambling with their coins, and I will say that they are the ones putting themselves into panic, because I don't see any reason why someone who is not a trader will turn deaf ears to the advise of using a noncustodial wallet, despite all the news about the flaws in exchanges, and still continue to keep their coins with third party.

Imagine assuming it wasn't a glitch, but an exit scam or a hack. These people will start blaming Coinbase, instead of blaming themselves for not learning from what happened in the past to FTX. I just hope that other investors who  still keeping their coins on exchanges will learn from this, and also these panicking Coinbase customers will also transfer their coins to a noncustodial wallet after the glitch is fixed. It is 50/50 using an exchange to keep your coins, and don't be a victim, because the risk is higher than what you benefit from the exchange. Anyone with High Blood Pressure might collapse, when he checks his account in Coinbase and sees $0

  that would be terrifying seeing such, even when it was a glitch. Seeing your asset in $0 that indeed can  cause psychological effects. Through such event alot would learn that leaving or holding your asset in a cex account, is not a smart move and it's wrong. Most people actually leave their asset in a cex for trading purposes. While some leave their asset in exchange due to not having a proper knowledge about this space . At first I ones have such mindset of  thinking that holding your coin in an exchange is safe till the event of FTX collapsing  occurs. And other users here always emphasize on how is not safe to hold your coins in an cex account. This information is actually nice would make those that Are still holding in an exchange to be more cautious and should stop it ( expecially those that aren't trading) but holding, Dont forget not your key Not your Coin.

I thought after FTX investors would have been wise to know not your key not your coin but its far from it, People continue to fall for CEX drama but at least we will just continue to speak the truth not your key not your coin, those who will listen will listen while the others will later accept it after being victimised

This is more about an exchange which is Coinbase. This topic is better to be on exchange board.

One of the reasons is that some people do not know the difference between wallet and exchanges. Some people think exchanges are wallets. Some people have not heard not you key not your coin before. Yes it is bad to leave coins on exchanges. Another reason is that some people know about trading and they are trading with high amount of money. Some people are using the centralized exchanges P2P to trade also for money making.

Panicking Coinbase users woke up today to find their bitcoin balances at $0 because of a technical glitch.

Source: https://www.msn.com/en-us/money/markets/bitcoin-s-price-surge-briefly-broke-coinbase/ar-BB1j4tNN

Well at least they were lucky that it was just a glitch! I will never understand why normal people are keeping their coins in an exchange and not even in a software wallet. People who are not trading coins do not need to use an exchange. It is just ridiculous seeing people on X/Twitter having a mental breakdown over this even after hearing about "not your keys, not your coins" so many times.