Topic: What is safest: Binance/exchanges or online software wallets? - page 2. (Read 288 times)

It depends on your crypto needs, in other words you want to trade or just want to hold?
Regarding security, they both have different security systems, depending on how carefully you store all types of access to the two wallets, both exchange wallets and software wallets.

However, if you look at it in terms of profit, then the first option is this: if you store coins or crypto on an exchange and experience a loss? Stolen (not from the process you trade for a loss) then those of you who have 50% can be helped by Binance support team for identify it, and if there is a leak from the exchange then you will get it in return.

The second option is: if you store coins or crypto in a software wallet, you automatically lose your own responsibility without a third party taking responsibility and guaranteeing your coins back.

Their wallets don't get hacked, your computer does. Coins get stolen from self-hosted wallets if you have a dedicated malware in your system. This malware could also attack your exchange accounts by stealing cookies and hijacking your session, stealing your email account, poisoning your DNS and so on.

This is why hardware wallets and cold storage are considered the best option - if done properly, malware has almost no chances to get into such systems. In your case of hot wallet vs exchange account, exchange has most of the downsides of the hot wallet and a huge additional downside that "not your keys, not your coins".

Open source wallets are always safer than Binance or any other centralized exchanges that should only be used for trading and not for holding coins.... hence the name exchanges.

Using any wallet you are not actually keeping your coins on wallet but on blockchain and there is no single point of failure like for exchanges.
Attacker would need to have physical access to your phone or computer device, than he would need to know or crack all your passwords and then send coins from your wallet or use your private keys.
Exchanges doesn't have to be hacked but they can at any time decide to freeze your account and take your funds for whatever reasons, and that is not a theory but thing that is actually happening all the time.

We can also compare number of times you got hacked with number of times Binance, Mt.Gox and other exchanges got hacked so far, and if you hold more coins you are bigger target for hackers.
Holding coins on exchanges you become a part of much bigger target for sure.

IMHO, I think it depends on the level of trust that you give to the platform/product, let say an exchange because based on my experience I've been using Binance wallet to stored cryptocurrency for trading and some for holding, and since 2017 until now I never encountered any problem doing this and because I trust Binance thats why I have no problem, But if you are uncertain about the things like the saying "Not your keys Not your crypto" it is better to use another product or services that you think can give you peace of mind.

No matter what, saving cryptocurrencies on exchanges should be discouraged completely. The good point you make is that it is advisable to keep it on wallets, not all wallets but only on noncustodial wallets because there is no much difference between exchanges and custodial wallet in term of someone having control over his cryptocurrencies, only noncustodial will be better. In addition, offline wallets will be good for high amount.

Samourai is a better choice if that's your choice between Binance. In Binance, it's an exchange and as you have said, you know that you don't hold your keys there whilst in Samourai, you're holding it.

Binance is no doubt reputable and has a good team but still just to be sure if you're taking care of your funds, if the a sudden attack comes unto them and a huge amount is involved and robbed, they may say that they cannot cover the loss and collateral that has been taken on that scenario.

Everything in the coding world has at least one vulnerability, more or less dangerous. The difference is that the worst thing that could happen with Samourai or other non-custodial wallets is that it could have various vulnerabilities such as.. I don't know, a way to bypass wallet login?

Non-custodial wallet vulnerabilities are mostly only a threat as soon as someone obtains your phone/computer physically and could tamper with it. Perhaps the hackers developed a maliciously modified version of Samourai and you're an unfortunate victim of it - that is why you should always verify your builds/executables/archives before installing something on your device. On the other hand, exchanges could be hacked through coding flaws and hot wallets (or even cold) could be stripped out of funds.

And then, there's the custodial/non-custodial risk: as soon as you deposit on an exchange, they have more rights over your coins than you do. So no matter how you take it, non-custodial wallets such as Samourai or Electrum are way, way better than exchanges.

Hardware wallet is one of the safest, there are other safest wallets. Paper wallet is also safest, using airgapped device is also safest, multisig wallet can even be one of the safest in some cases, using electrum in cold form and one as watch-only is also safest. But, know that not you key not your coin still also applied to all noncustodial wallets, but the reputed ones are recommended.

Not you key not you coin rule still applies here. Binance will not give you private key, which means binance will have the private key, which means binance have the full control over the coins you have with them as they are the one that will unlock the bitcoin on blockchain, you have no full control as it is not your coin on blockchain.

Exchanges are often hacked, because they are often targeted by hackers because of high amount of funds they are controlling.

A malware that can hack your wallet can also easily hack you exchange account, but it is you that will have to learn ways to avoid your wallet being hacked.

Exchanges have so much funds with them, they are hackers target. Unlike noncustodial wallets that are hold by individual, any individual that do not also protect his wallet can result to hacked wallet. Also, exchanges are making use of hot wallets for storage.

Take note, Binance has been hacked multiple times already and that's already a red flag if you want to treat Binance as your main wallet. I don't know about Samourai but people's vouching for it so it's probably a good wallet. Just don't even consider storing your asset in an exchange, especially when you aren't a trader.

I think this isn't the appropriate board for this thread, maybe on Wallet software or at Exchanges board.

You have the reason to be skeptical, as always even if you own non-costudial wallets. Furthermore, it's always an individual call to choose what wallet they should use. I still firmly believe the hardware wallets are still the safest but I recommend you use Electrum software wallet instead. I am using this for quite long now, so far I haven't got any issues using the app. Binance was quite the standard now for an exchange but I still wouldn't trust it even if so I believe that they are trusted, it's totally a centralized exchange not a wallet.

Samourai is non-custodial (AFAIK), it would be a good choice.
As for your arguments keeping funds in a trusted exchange: Mt.Gox was the golden standard for years... Untill at one point, it wasn't and thousands of people lost all their funds...

Like you already said: everybody tells you "not your keys, not your coin"... There's a reason WHY everybody tells you this... It's not an easy catchphrase... It's possible you grew tired of hearing it, but that doesn't make it any less true...
Same goes for hardware wallets: there's a reason everybody keeps suggesting them... It's possible you grew tired of hearing it, but the reason still remains...

How safe your coins are stored is completely up to you:

• if you pick a non custodial (online) wallet or an exchange, you put 100% of your trust in an unknown person. Did they do their homework? Are they insured? Will they lock your account? Will they work with tax authorities? Will they get hacked? You simple do not know
• if you pick a decent desktop wallet, and make a safe backup of your seed phrase on a piece of paper (or backup your wallet on a couple removable media), AND use a strong passphrase to encrypt your wallet AND make sure it's up-to-date and verified the signature AND harden your OS (firewall, virusscanner, no unknown software, patches applied,...) you're probably pretty safe
• if you pick a  decent hardware wallet, an airgapped setup or a properly generated paper wallet, it should beat the other 2 options by a longshot (in terms of security)

but everything still boils down to YOU: be your own bank... Do your homework and do what sounds best to you, nobody is going to refund you if you lose your money, so take some responsability

If you're only holding a couple hundred bucks worth of BTC, and you're fine with the risks of a custodial service because the ease of use they offer: Why not? Don't come crying if they close your account, get hacked, do an exit scam,....

If you use a desktop wallet and you don't install an antivirus, firewall, updates, patches, you don't verify your wallet's signature, use a weak passphrase, backup your seedphrase on your icloud: you might even be better of with a custodial service.

You have to understand that there's no such thing as "safest option" in crypto. As for Exodus - one cons about this software is that it is not completely open source, compare to Samourai. Binance has been hacked already, Binance Security Breach Update. Exodus/Samourai is good, as long as you know how to protect your "private key", it's not that the software are going to be breach, they are non-custodial, if even if those two are breach, hackers doesn't have access to your private keys as it will be stored in your devices, i.e. mobile phone. So the responsibility will be really in your hand, if you don't practice safe security hygiene, like clicking links from unknown source (phishing), you may be hack.

But when you store your coins in Binance, they manage your private keys, and in a event of hack just like I mentioned above, your coins are in jeopardy of being stolen.

If you want to sell your coins in a near, I think you can leave that coins at the exchange so you can sell them anytime you want. I suggest you use binance as binance is safe to keep your coins at that exchange. But as it says, "not your keys and not your coins," so you should be aware of that.

You can also try to install a wallet that supports exchange to sell your coin right away when the price increases. I tried to use Jaxx until now, and I do not have a problem storing my coins and sell it once the price rise. But still, you can not place an order to sell on that wallet because I think that type of wallet does not support that feature.

Maybe Binance has good protection and security for their site, so it is hard to hack/attack that exchange.

Yes, I know hardware wallets are the safest options, "not your keys not your coins" etc...
But if I'll leave some coins in a "software", what is the safest option? Leave it in an exchange like Binance or trust a hot wallet like Samourai?
The reason I'm skeptical about about other software wallets like Exodus/Samourai etc is because I'll have to trust that their software wont be hacked, nor my mobile phone. While in Binance/other exchanges, they have a whole team dedicated to that.
Why is it harder to hack/attack a software/hot wallet than it is to hack Binance/exchanges?