Storing your Crypto in Exchanges is better than using Cold Wallets!

wxa7115

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Quote from: MCobian on September 23, 2020, 05:41:49 PM

In my opinion, those who have large amounts of crypto should use the cold wallets. What happened to cryptopia discouraged me
from storing large amounts of crypto on exchanges. As the number of exchanges successfully hacked grew, even big exchanges
like Binance has been hacked before. So it is not feasible to take risks for small profits.

That is the way it should be but many times people take the most conformable option over the most secure one, it is true that an exchange wallet can be very convenient but you are exchanging your security over that convenience, and while there may be circumstances that may make that trade worthwhile when it comes to cryptocurrencies I do not see how, except for trading your assets, leaving your coins there for the long term can be justified.

There have been many examples on the past of people losing their money due to hacks or irrational KYC procedures and yet somehow we are to believe exchanges are a better option than cold storage? I am simply not buying it.

Timelord2067

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Quote from: Naster on September 23, 2020, 06:53:34 PM

3. You will only need to keep your 24 words recovery phrase and passphrase (if set)

If you were wanting to be extra secure you could hide your 12/24 words out in the open - quite literally.

Select 12/24 outdoor locations that you can memorise, spray paint a single word in each location - as large as you can - wait for a passing satellite to photograph the word - verify via Google or another aerial mapping service the word is legible (and that it is archived) - Just ensure you don't just leave 12/24 words - do dozens, if not hundreds of words, that way no one can collate the seed words and try to work out the correct combination. (even do some of the words in duplicate locations to further confuse anyone trying to unlock the key)

You then wouldn't even need to keep the words in a "secure" location for anyone to uncover and copy because there wouldn't even be a single copy of the list.

Quidat

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Quote from: Naster on September 23, 2020, 06:53:34 PM

Exchanges are great places to trade your digital assets, but NOT to keep lot of funds (if yes, then for trade only and not for long storage). I wouldn't recommend doing it. I read so many bad reviews on Exchanges like Binance, Bitstamp, freezing money of customers and asking them to provide information they can't really provide (like screenshots of the very first transaction you did 3 years ago) or events like forcing non-verified users to submit KYC, not to mention about the recent hacks.

If you want to have 100% control of your money, Exchanges are the worst place you can go for.
I don't think its worth the interest paid by some exchanges to store your money for long term on their exchanges.

Agreed with those keypoints above that you had mentioned about Hardware wallets and i dont see on why op did really consider out that it is much better than exchange wallets in any sense.
When it comes to security then theres no doubt that hardware wallets is always been a better choice.It might have some cons but this is way more better than storing your coins on an exchange
for a long time.As mentioned you wouldnt know on when theyll do ask for some verification specially if you have stored big amounts on an exchange wallet.They do have always the power to ask
out and changed up their minds if theyd like to.So i dont see the point or kind of mindset on op do had to him to consider that hardware wallets are shit than on exchange wallet ones.

Naster

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I don't agree completely with the OP for few reasons.
While it's true that Exchanges like Binance, Kraken etc.. are becoming continuously sophisticated, it's very far to say that cold wallets like Ledger, Trezor etc. are going to be history.

It's completely false to say that you are relying on a centralized private company when using a such cold wallet like Ledger.com and completely wrong to make comparison to Netscape.
Therefore, let me give you some clear facts about Ledger (also valid for Trezor and other similar devices):

1. You can recover your accounts on any BIP39 compatible third-party wallet, not only on Ledger devices. So you will still be able to access your funds even if Ledger disappears.
2. The Ledger device is not a centralized device as it does not connect to Ledger servers but to the Blockchain. Even if Ledger closed you would still be able to send and receive your digital assets through Ledger application and other third party platforms.
3. You will only need to keep your 24 words recovery phrase and passphrase (if set)
4. So as you can see, these cold wallets (that could be used also as hot wallets!!) are very secure and nobody will freeze (depending on which digital assets you are using - that's an other topic) or steal your assets that easy

Exchanges are great places to trade your digital assets, but NOT to keep lot of funds (if yes, then for trade only and not for long storage). I wouldn't recommend doing it. I read so many bad reviews on Exchanges like Binance, Bitstamp, freezing money of customers and asking them to provide information they can't really provide (like screenshots of the very first transaction you did 3 years ago) or events like forcing non-verified users to submit KYC, not to mention about the recent hacks.

If you want to have 100% control of your money, Exchanges are the worst place you can go for.
I don't think its worth the interest paid by some exchanges to store your money for long term on their wallets.

DoublerHunter

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Quote from: Oceat on September 23, 2020, 05:56:56 PM

Quote from: ?? on ??

Do you really believe it? Not all exchanges pay the interest rate, but even if this is so, it turns out that for the sake of the interest rate you are ready to risk ALL your funds that you put on the exchange. Is this really the right balance of risks in your opinion? After all,% can be paid to you for several years, and as a result, the exchange for some reason will close and gobble up all your money. Who did win? Will you be satisfied with the interest?

I can't argue to this anymore and what exactly OP saying is not recommendable. Just for the sake of low profit you decide to risk all of your assets by leaving it on the exchange? Your crypto, your money. Don't let someone controls it from you—we have given the opportunity to hold and control our own money once you join in the blockchain technology

^ That is freedom, a freedom that you are the one who controls your money, not someone else, not by the exchange. If you believe the saying in most crpyto enthusiasts, not your key, not your fund. It is a simple logic, why you will trust exchange. There are various of scam report of exchange that has been scammed or compromised the site, it has been breached the security. If you have left your coins there, say bye-bye for them you will never recover it. Colds wallet is much better and use hot wallet if you have a regular transction using your coin.

Oceat

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Quote from: ?? on ??

Do you really believe it? Not all exchanges pay the interest rate, but even if this is so, it turns out that for the sake of the interest rate you are ready to risk ALL your funds that you put on the exchange. Is this really the right balance of risks in your opinion? After all,% can be paid to you for several years, and as a result, the exchange for some reason will close and gobble up all your money. Who did win? Will you be satisfied with the interest?

I can't argue to this anymore and what exactly OP saying is not recommendable. Just for the sake of low profit you decide to risk all of your assets by leaving it on the exchange? Your crypto, your money. Don't let someone controls it from you—we have given the opportunity to hold and control our own money once you join in the blockchain technology

MCobian

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In my opinion, those who have large amounts of crypto should use the cold wallets. What happened to cryptopia discouraged me
from storing large amounts of crypto on exchanges. As the number of exchanges successfully hacked grew, even big exchanges
like Binance has been hacked before. So it is not feasible to take risks for small profits.

wxa7115

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Quote from: dfox101 on September 18, 2020, 01:05:05 PM

There are so many examples the exchanges failed and customers lost big, I never store any crypto on exchange, only trade there.

And despite this people still insist to store their coins there, on the surface this may seem like a contradictory behaviour but what happens is that many people never really think about the consequences of their actions and they do not believe that they will get hacked and will lose their coins, so they keep their coins at the exchange believing their coins are safer there when in fact the opposite is the truth.

Any hacker knows that exchanges are holding a fortune and as such they are always trying to find a flaw in their security they can exploit, while in the case of a user as long as he is not a whale and he takes the time to secure his coins then the chances he gets hacked are minimal.

Asuspawer09

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Quote from: Get-Paid.com on September 13, 2020, 04:52:01 PM

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Im sure that cold wallets or hardware wallets are still safer than exchanges, their might be some issues in offline wallets that a lot of people encounter, and also there are some issues too when it comes to exchanges.

Still their are a lot of exchanges that you could also trust to invest your funds, also the only advantage in exchanges is you could convert/buy/invest your funds in other cryptocurrency that could potentially increase its market price, but when it comes to security hardware wallets/offline wallets are surely better than using exchanger as a wallet and it is not advisable when it comes to long term investment.

Probably because not all exchanges could sustain the market a big dump in the market could potentially bankrupt the exchange's website.

hatshepsut93

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If you are ready to trade your privacy, security and control over your money for some "8% APY", you aren't a real Bitcoiners, you're just an investor who wants to make more gains at all costs. Bitcoin has value because it's not like banks, if you start turning it into a bank, it loses its value proposition. Like, one of the driving arguments in the recent years was that Bitcoin is a digital gold, but if you keep your coins in some online wallet, you don't have digital gold, you have an IOU for digital gold. And we all know what happened to IOUs for physical gold.

Igor17Krik

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Yes of course it is good to store on the exchange in my opinion, cold wallets are safer. Yes, they can fail, but exchanges are not immune to hacks and fraud. Everyone should choose their own way to protect their funds. When I first started studying cryptocurrencies and blockchain I kept my coins on one of the popular exchanges. Unfortunately, it is no longer there as it was hacked. Asset holders cannot receive their funds. The courts have been going on for several years.

Reatim

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That is the last thing i will do ,I have watched hacking for years and also exchange taking our Funds.
there are also a exchange that charge you per month if you have no activities or trading that doing in their platform.
so why would i trust exchange?
I have my own storage and i also have wallets.

Hope you will not become a victim in future so you need to change your stand.

libert19

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You seem to be completely forgetting the idea of hardware wallets there is no centralized company and you don't have to rely on such 'company' for your faulty device either. As long as you have seed words the coins are yours, there is no one else.

But sure if exchange has insurance for user funds then go ahead put there.

noorammak

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I think it depends on the purpose of keeping money and how large or small money is to choose how to store cryptocurrencies.

If you want to store large sums of money or keep it for many years then you should choose a cold wallet

If you want to store money for short-term trading for a few weeks or months or you only have a small amount of money, storing in exchanges is not a problem as long as you implement AML / KYC and have a lot of security. big for them. The most unlucky thing that could happen was that this exchange was closed.

dfox101

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There are so many examples the exchanges failed and customers lost big, I never store any crypto on exchange, only trade there.

peterpanda

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Exchanger has also risk and anyone can lose his money forever. Do you think all the exchangers are safe and trustworthy? A exchanger can run away at any time and besides that a exchanger can be hacked.

wxa7115

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Quote from: Get-Paid.com on September 13, 2020, 04:52:01 PM

When you seriously come to think about it - storing your Crypto in exchanges is better than using cold wallets.

Looks like you was booze-fueled when wrote that. Say that face-to-face to customers who experienced disasters of Mt.Gox-grade. Cold wallets under personal control are the safest places where private keys for crypto can be stored, hardware wallets follow. Exchanges must be considered as the spots for trading and/or conversion rather than for storing.

Truth to be told many people are so used to the fiat system in which you let a bank store and protect your money that despite this whole market being built under the premise of being your own bank people want to go back to the old model and it is obvious centralized institutions like exchanges are happy to perform that function, that is why exchanges which technically should be a place to just exchange your coins have become de facto banks.

And this is very troubling because as we know exchanges are hacked all the time and once you lose your coins in this market there is no way to get them back and while some argue the exchange will cover the losses that is only true if they are at fault, if you are hacked because of your own mistakes then those coins are gone.

Get-Paid.com

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Quote from: buwaytress on September 17, 2020, 04:19:09 AM

Disagree on a philosophical level and you won't find many fans of that opinion here BUT for the general retail user, or even institutional level users, who don't actually use Bitcoin but hold, perhaps own wallet (paper even) is even better than hardware

Exactly, well said.

Quote from: Xembin on September 17, 2020, 05:27:00 AM

I agree with you, storing your crypto in exchange is better than using cold wallet, because and the end of it there will be massive profit in the exchange than cold wallet.
I can identify some exchange here like Kraken, Coinbase, and paybis are well trusted exchange you can trade and earn more profit without fear of hacker.
Not everybody know how to protect their wallet very well, but everybody know how to store bitcoins on exchange that will profit them. Business is all about risk, storing your coins is a risk but after the risk there's a huge profit and the end of it.

Not only you're right, Binance now has lowered its interest rate % offered on USDT, it shows they are trying to keep things stable, that's what solid banks do as well - reduce the rate on savings, increase it on lending - it's not a very scrupulous step but it's necessary in order to keep things stable so kudos to them.

Once again it's important to state not all exchanges are safe but those who take precautions like Binance are much more solid than the others.

Xembin

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I agree with you, storing your crypto in exchange is better than using cold wallet, because and the end of it there will be massive profit in the exchange than cold wallet.
I can identify some exchange here like Kraken, Coinbase, and paybis are well trusted exchange you can trade and earn more profit without fear of hacker.
Not everybody know how to protect their wallet very well, but everybody know how to store bitcoins on exchange that will profit them. Business is all about risk, storing your coins is a risk but after the risk there's a huge profit and the end of it.

buwaytress

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Disagree on a philosophical level and you won't find many fans of that opinion here BUT for the general retail user, or even institutional level users, who don't actually use Bitcoin but hold, perhaps own wallet (paper even) is even better than hardware -- if you protect it with right measures and don't want to trust a company like Ledger.

Even I might be tempted to part with some of my BTC for 8%APY if it were regional bank (rather than a national one) that is insured and guaranteed by say, the EU instead of just a single government.

But I can certainly understand why most people, judging from the many queries from people who lost their accounts and can't recover private keys, would prefer keeping shit safely tucked away and guarded by someone else.

Topic: Storing your Crypto in Exchanges is better than using Cold Wallets! (Read 1230 times)