Topic: What is safest: Binance/exchanges or online software wallets? (Read 332 times)

Exchange is not a good option to store your coin. It's very risky, anytime exchange can get hacked. we all know Binance got hacked several times:  Binance exchange hackers steal bitcoins worth $41m  

So don't try to hold your altcoin at any exchange, just use those exchanges to buy or sell your coin. I would suggest you hold any coin use Trust wallet, Myetherewallet, etc. Dont store your private key online, Try to store those keys on paper. I am holding my altcoin at Trust wallet and MEW. I feel safe there.  

But even Binance had several times that has been hacked before, still a lot the community in this field of business industry are continuously suing the platform to trade their assets for believing that they can grow it more and more using this exchange. I wouldn't choose online software wallets in my own opinion.

If you want to keep your funds in the exchange itself because you are afraid that your device might get hacked then you are just doubling the risk when holding it on exchange because normally you used to save the email and password in your device which is also used for registering on exchange then having the authentications apps installed on phone then your are going to lose the money now as well because simply the hacker can access funds and withdraw to their wallets.

It is ridiculous to limit yourself to a bunch of options and then force yourself to choose bad instead of worse.
Bitcoin is not like other currencies which you are limited to what wallet you can use for example  because of jurisdictions limits in PayPal.
You can choose any wallet type that you like and there are already secure options such as paper wallets (the cheapest), self made cold storage using Linux (still cheap but more flexible), hardware wallets (have to buy), desktop wallets,... You can also always use multiple options for multiple purposes each wallet with a different amount in it.

Between Binance and Samourai, I'd easily choose Samourai.

I'm more than sure that right at this very moment there is an ongoing plan or even attempt to break Binance's security. There is indeed a whole team dedicated to protect Binance but there are also a lot of teams trying to get into it. It's always a race. And a lot of times, attackers gain the upper hand and billions are lost from exchanges. Binance have had its share of this. Tens of millions were lost when Binance was successfully hacked a couple of years ago.

Furthermore, there is the fact that Binance might suddenly freeze your funds. Other than that, they might also ask for your personal information all of a sudden. Moreover, regulations might suddenly go very strict against the company making its future uncertain. But most of all, your funds in Binance is not yours.

At least with Samourai, you've got your 12-word seed and a significant amount of privacy.

Binance has survived a huge hack before, but there are other reasons why an exchange may not let you have access to your funds--they could get caught up in a sting or some law enforcement agency might freeze everyone's coins or some crap like that--you just never know with any of these exchanges.  Not your keys, not your coins.  Learn that.

The question being asked in the title here is kind of a ridiculous one.  Both options are too risky to be seriously considered when there are much safer alternatives out there.  Don't store your coins on an exchange and don't use online wallets where the website owner is the custodian of them.  It's just not worth the risk when you could use Electrum or a hardware wallet and sleep easy at night knowing your crypto is safe.

You definitely can leave some your crypto on Binance/other exchange, but only if you want to trade with them (not for long time holding), but you should be ready that your exchange wallet  can be hacked, all the assets moved and no one won't give you those crypto back. Digital wallets like Ledger/Trezor are the best for long-term holdings because no one can connect with that wallet remotely if it isn’t connected to your comp, but just laying somewhere.

If your purpose is to use their staking and interest earning feature then you really have to keep it to the exchanges. But it still applies that if you don't hold the keys, you don't own your coins.

What's with the small interest that you're going to earn yearly if your coins at risk. Even if you tell that it's from the most known exchanges, still, they're always vulnerable to attacks and might affect your funds if the unexpected comes.

I would not even risk $10K in an exchange in the name of staking. it's not worth it.

For your information, we do have some hardware wallets that allow you to stake some coins like Tezos, Tron, Cosmos, Algorand and Polkadot  while keeping  them safely like ledger hardware wallets via Ledger Live - https://www.ledger.com/staking or even through an external wallet app.

Of course hardware is safest than any centralized exchange but exchanges offer many good deals like staking and i think its better to keep them in exchanges because some offers are limited and maybe you may miss one of them easily if you keep in hardware

Keeping your funds in exchange is never ever safe. Even though binance have a good history and also they have SAFU funds to cover the loses in case of a hack but still you never know that some day any big hack may happen which binance is unable to recover  the loss. So if you are not trading that there is no point keeping the funds in binance.

If you decide to choose a noncustodial wallet, then any true noncustodial wallet would be safe to store your coins since you know better about the key quote. If you already decide to keep your assets in a centralized exchange, then you must choose a well-reputed exchange. And I agree Binance would be better than other web wallets. Because I notice during withdrawal that Binance requires me to input 3 step verification like mail, phone, and 2FA. So, it's quite impossible to hack all at the same time. But again, I will discourage you to use any custodial wallet service including exchange. Keep it mind, everything on the web is hackable.

I have nothing to choose between Binance/exchange and software wallets for storing my bitcoin, both are prone to attacks or hackers because both can access online. You may still store in exchange but not all of your money just enough money only for buy and sell, when talking about storing our bitcoin or saving our money for the future then you may use Ledger Nano.

It is not difficult to hack Exodus / Samourai, and it is also not difficult to hack Binance, all wallets or online exchanges connected to the Internet are not 100% secure, there is always the possibility of hacking but for me if I had to choose I would choose to store my currencies on Binance for two reasons firstly that I can trade while I would like to do that, and the second thing is that Binance has a very strong protection and will compensate users for losing their money in the event of it being hacked, as happened in the past.

Adjust to your abilities. Please note that loss is not just about stolen funds, but about loss of access (perhaps due to forgetting, or damage/loss of data storage device).

If you choose a hot wallet, then it is mostly at your own risk. What must be considered and ensured is the security of your device from viruses/hacking attacks, your caution in accessing the wallet and storing login data/files.
For exchange wallets, understand their reputation, history of security or hacking cases, and the account recovery methods they use if your account is locked or something similar.

As long it would be an non-custodial one then i would be consider to be a good option rather than on using up some online custodial wallet which you dont able to possess the keys of a certain wallet.
Yeah, that common "not your keys not your coins" line shouldnt really be that forgotten from time to time.When it comes to exchange matters or talks then you shouldnt really trust up
even if its Binance or other top exchangers specially if you do have big numbers of coins then i dont see for it to be safe nor ideal to store it up on an exchange platform.
There's no such thing about safe because as long you dont hold up the coins then theres no way back on retrieving those coins once it gets hacked.

Basically all these software's are good but the bulk of these security depends on the individual, so, you are solely responsible for what happen to your coins. In reality there is nothing safe on the internet sincerely speaking becasue nobody is above compromise, so, using software for coins storage should be ruin out of this context IMO. I could have suggest you with some noncustodial wallets but they're prone to hackers. Hardware wallet still remains the only best option to store your long-term coins and not any software wallet.  
That's the point, if these software are good then how good is your mobile/laptops safe from hackers most especially malwares?.
It was within these dedicated team that their exchnage was compromise, when the right target come maybe they can find their ways through their software.
Binance exchange was compromised severally, so, they might get through someday or continue slashing their security.

Just remember how many times binance has been hacked, there is no safety for storing your money or bitcoin in Binance or any crypto exchanges, it is also not safe to store your bitcoin in an online software because that is also prime from hackers, both things you have mentioned are not advisable, it is better to choose a hardware wallet if you want to secure your money.

If you are holding your coins on an online exchange that does mean that If in the future there is any attack on the exchange, the security of not 1 or 2 but all the people will be compromised. Whereas wallets like Samourai, it's more or so localized on your mobile and is more personal, which does make it even more prone to hacking. What do you think would be easier? Hacking a smartphone or hacking an already established company? Now, both of these options are not safe at all ! Literally AT ALL. I do think offline wallets would be a much safer option but at the same time nothing better than investing in a good hardware wallet. But I am not trying to put a negative impact on samourai itself , I have been using it since years when my campain manager told us about the new SegWit wallet and it has been wonderful since that. It's super anonymous and private so there are always a lot of points for that. But keep your Mobile secure , it's more important.

Hardware wallets are the best of all time to secure the Bitcoins and crypto holdings. Binance have gained good reputation through its service, and in some occasion it even gave back the funds to the users who lost funds through a hack thats happened with Binance. Exchange wallets are good for users who prioritise trading and for long term investment hardware wallets are the best choice.

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?