Topic: Storing your Crypto in Exchanges is better than using Cold Wallets! - page 4. (Read 1230 times)

It is clear that for you cryptocurrency is only about profit. If you are willing to trust a 3rd party with your keys for 8% interest (if that even exists) maybe you don't have much invested or you are just naive. What exactly do you think was the vision of Satoshi Nakamoto when he created Bitcoin? Do you think centralized exchanges follow that vision?

More and more people are moving away from banks to cryptocurrency in general precisely to be able to remove the 3rd party. To take some responsibility and control their finances. It is difficult obviously and things can go bad if you lose your keys but is a risk some of us are willing to take, and you have to have some backups and with time people will develop better ways of securing their keys.

If you are using an exchange to trade constantly that's understandable but if you are using them to store all your funds or a huge part of it, that's just dumb. With what you are suggesting, just keep your funds in your bank! The only downside is you won't have 8% interest annually but if your concern is security a bank is more secure. Centralized exchanges have all the downsides of banks but in steroids! No privacy, security meh, prone to hacks and no refunds, fishy staff, withdrawal limitations, locking accounts and I could go on an on, I mean just check the news and every once in a while there will be exchanges hacks... Just take some responsibility and assume your finances, that's the purpose of cryptocurrency.

I disagree to this, we all know crypto exchanges are one of the worst places to store crypto, I mean take a good look at the past records, it's almost inevitable for crypto exchanges not to get hacked, as at 2019 about twelve crypto exchanges got hacked and up till today they are unable pay the users,because all the stolen funds have not been recovered, that's the more reason why I would never advise anyone to store their crypto on exchanges, with that said :- The best place to always store your crypto is in your wallet

Then you are a bit ignorant on how these hardware wallet and non-custodial wallet works. This has been pointed out already but let me repeat, seed phrases and private keys of your wallet can be save and kept in a safe place. In case your ledger or trezor is lost, you can buy a new one then import the seed phrase/private key of the old wallet. 

Mate, have you even followed news on hacked exchanges? Exchanges can't just magically come up with the lost funds. Take for example Cryptopia which was hacked early last year but users, who kept their funds there, are still waiting for a refund until now. If you want another example, read on Mt. Gox.

I'm afraid to say regardless of how much they give me a percentage when I store my crypto assets on their exchanges, It won't change the fact if their exchanges where compromise, my assets will be lost forever along with the percentage I get. I rather prefer to store my crypto assets on my own because storing some big amount on some exchanges will cause us an anxiety that won't make us some pretty rest in our sleep. we already know that exchange hacking is a face and there were some cases that some of the said exchanges have doctored their hacking just to stole every single cryptocurrency that have been stored on their exchange wallet.

Not only manipulating but also the chance of being hacked and all our asset will go with the target.
and this has been happening until now.
specially in Ledger wallets in which the safest wallet has been ever created .
I would never suggest to people leaving their Currency inside exchange for days,we can store some amount if we are in trading just to make sure we are ready anytime the currency we wanted falls the price and we need to purchase instantly.

If you are not concerned about your privacy and you can trust the exchange you are using (can bear the loss involved in case of exchange being a scam or exchange face an unrecoverable hack), an exchange could be a better option with all those email and 2FA verifications for normal users. But if you are investing in the future of coin and know what you are doing, it would be much safer to take things on your own hands.

I feel better to save coins at the wallets such as ledger or another wallet than to keep my coins at the exchange, even for the exchange like binance, bitmex, or other reputable exchanges. But if that is for the short term, I think it is okay to save on the exchange's wallet because the coins will be used for trade, and after it gets what I want, I will send it to another wallet. But we can not force people who still store their coins at the exchanges because maybe they have their own strategy, which will depend on what people use with their coins.

Leaving your coins on the hot wallets of any Exchange is never considered to be safe even if they can pay us with decent interest rates.Being a hot wallet, it can be easily accessed by the hackers. So it is often advised that if you are not into trading then you should not store your coins on the Exchanges.You should rather go for an offline cold wallet which will provide you with more security options.

Talking about KYC and AML, now a days almost every Exchange take these security measures but I don't think that it can stop hackers from accessing your wallets and any Exchange will take responsibility for such hacks and will reimburse you. On the other hand cold wallets provides you with a pin code which is required during every transaction we make and a 24 word backup seed which can be used to recover our account in case we have lost or damaged our device. Undeniably, cold wallets also have some security issues like few months before Kraken Security Labs told that it is possible to access the private keys by hacking the Trezor hardware wallets but the question is how often such hacks take place? We have heard many incidents regarding an Exchange getting attacked by the hackers. Some of these incidents are mentioned in the above replies but how many times you have heard that a hardware wallet got hacked? So it is not justifiable to say that Exchanges are more secure than cold wallets.

The decision to store your coins on an Exchange can also depend upon your willingness and the amount of coins you have to store.If you want to store an amount of coins which you can easily afford to lose or even if you are willing to store more then I don't think it should bother you that whether it is safe or not.You can simply stake them and enjoy regular interests.

So we should bet on the house in Vegas casinos?

That's not allowed because the house always wins.

Of course this is correct if you only have a couple of dollars worth of coins.
If you have anything meaningful I don't think that anybody sane would leave the funds onto the hands of various businesses / exchanges or not, even with KYC. And I'll tell you why:
1. Bitcoin is not properly regulated and you may end up with your funds seized by govt.
2. Bitcoin related businesses are not properly regulated either and a hack is easy to be faked. PS. Where is Binance's "official address" this year?   (Is it Malta, China, Singapore or somewhere else?)
3. Nothing is too big to fail / fall. A business that went bankrupt for whatever reasons will not pay your funds.
4. If the business will leave you without money, will you be able to hire good lawyers to fight for your money? With what funds? And with what odds for success?

All in all, I expect everybody sane who has life changing funds in Bitcoin will use (offline) cold storage for them.

As stated, I agree on storing my funds on a cold wallet and not on exchanges (for the long term). I only find exchanges helpful if at the moment you receive them, you spend them. Otherwise, an exchange is working like a bank, and even worse. Why should I trust a middleman? Where are we? On the fiat system? Because as far as I know, bitcoin created to prevent trust and not the opposite.

About the not your keys, not your bitcoins, I totally agree upon that. If you have 1BTC on your Binance, you don't really have it. It is Binance's bitcoin, they just allow you to transfer it. OP, you don't have to get deceived to learn. There are so many failures on trusting such companies in the past.

And to be honest, only those who don't know how bitcoin works pay Binance. The educated crypto-enthusiasts know what's right and what's wrong.

By the way, this is what banks do.

Are you talking about hardware wallets here? What about software wallets like electrum on a cold machine?

You can always restore your wallet using seed phrase you had written on paper diring the very first setup of your hardware device. If your device is somehow broken, you can buy another one and import seed phrase there. If you don't control the piece of paper with the seed phrase catefully written on that piece of paper, you don't actually have any money. That is a fundamental principle of using digital money based on cryptography. You can't claim your rights on something cryptographically encrypted, if you can't prove you can decrypt it.  Moreover, your government may come up with executive order like 6102 was but regarding bitcoin and cryptocurrencies  and may coercively seize bitcoins pegged to your identity. Every legal exchange must comply with local legislation and they will be handing over "your" bitcoins to your government.

A ledger can be both a hot and a cold wallet. And you don't need any support to get back your coins, you need to use your seed phrase. Ledger can disappear, your ledger device burn down, your computer crash, you should still have your seed phrase.

I have some amount of crypto on an exchange for trading and I don't get any interest, since I'm trading not lending or whatever.

I consider that crypto on the exchange to be something I can lose, just like I lost already when another exchange was hacked.

Tell your nonsense to MtGox users !

The only crypto I really own is the one for which I have the keys, and nobody else does.

Nothing beats a stamped Cryptosteel cold wallet.
And the worst place to store your bitcoins is on an exchange or other online service.
That's like leaving your wallet on some random table in a restaurant and going to the toilet and see if it's still there when you get back.
If you do that, you deserve to get hacked and lose it.
There are some risks you just do not take.

Oh and don't put all of your eggs in one basket either 

If that's what you believe in then so be it for you two, but I still don't want to store my coins in any exchange even if they are reputable or they are the top exchange in the market, if there is a hack and the hackers happen to stole the majority of the coins in the exchange it will take some time and a lot of processes before you can get your coins in those exchanges, take a look at Mt.Gox they are a huge exchange at that time, see how many years before the owners get their coin, I prefer to keep my coin and responsible for it.

To immediately refrain from any representation of any hardware wallets, but to say that it is safer to keep cryptocurrencies on a crypto exchange than on one such device is one big nonsense - but when someone writes an article this way without even knowing how such devices work then we get this kind of nonsense.

To compare Ledger or Trezor with Netscape is also more than an obvious example of ignorance of how such devices work - each user generates a seed as a backup, and that same seed can be used in most other crypto wallets - so even if Ledger as a company disappears at any moment nothing is lost.


Have you perhaps heard of the Mt.Gox hack or maybe about Quadriga exchange? Tell these users to still keep their funds on the crypto exchange and you will see what kind of response you will get. The profit that anyone could make if they only hold BTC in the past 5 years is at least x50, and you're talking about a miserable 8% here, with the aim of promoting your site and getting a few free clicks

If you think it's better to entrust someone else with the custody of your cryptocurrency, then be sure to do so - but giving advice like this in public is not only stupid, it can have very dangerous consequences.

None of the above would prevent Binance from going down the same way as MtGox.
If regulation would prevent anything then we wouldn't have an exchange getting wiped out in the last years and obviously wasn't the case.


Apples and nailclippers.
Compare it to a bank where the CEO empties all the accounts and nobody can reverse the trasnactions.
Btw, do you even know where Binance is operating from?



If you get a virus you can lose also your credential and your exchange account, at which point nobody is going to reimburse you in that case.
Good luck storing your coins on a "reputable" exchange.

This is the most ridiculous and illogical thread I have ever seen in this section. How can anyone even think about storing their crypto-assets in exchanges, after all the exchange hacks and robberies we had during the last 7-8 years? You never know when a particular exchange will go down. It will happen all of a sudden, and in the blink of an eye, your funds will be gone. And this has happened to me multiple times. I lost my coins when Mt Gox went down in 2014. The same happened with BTC-e in 2017 and Cryptopia in 2019. After losing a large part of my assets, I believe that I have learnt my lesson not to keep any of my coins in exchanges. But what can I say about the others? After all, it is their individual choice.

Yeah and sending your bitcoins to some random self proclaim progressional Investor or trader (in some cases miner) you encounter online is far better that actually educating yourself on how to do this things yourself. Don't let this exchanges decieve you, your funds are never save with them. Bitcoin came with the ideology to give back control to our finances why then are we throwing that away by handing back control over to the elite disguise as exchanges.

Cryptocurrencies exchange especially centralized ones are just as bad as your bank. If you think the returns you get are good reason why you should hold your coin in exchanges then it seems you have no idea what your funds are been used for or don't value those previous assets of yours. Keeping our coins on exchanges simple means we're giving more power to the centralized government and most likely they'll misused that power, if that isn't already happening. With the coins been entrusted to them they can use the funds to manipulate the market to their favor.

Lets learn not to shy away from responsibilities, as I believe it must be why the number of coins getting stored on exchanges are becoming a trend once more.

the small percentage of exchanges that i've seen pay an interest (which is more like 0.1% of all exchanges) have been shady and scammed their users and ran away. i have not seen any major exchange without any plans to scam its users do anything like this. the best thing they could do would be to pay the PoS reward of the PoS shitcoins you keep there but not the legitimate coins like bitcoin.

it seems like you know absolutely nothing about the history of crypto exchanges similar to Binance. a couple of years ago the "Top exchange" with the biggest volume handling millions of dollars worth of trade was another exchange and Binance didn't even exist. that exchange is now in 100+ rank. before that exchange there was another one that did the same, before that another, and so on.

not to mention that the days of CEX is numbered as they enforce more and more stupid rules that the best of them is KYC. rules such as blocking your account if you ever used a mixing technique or have any coins that they think is "tainted". eventually they will be replaced by DEX and their centralized coins (eg. BNB) dies with them and replaced by more decentralized coins.