Which is better between keeping assets in exchange or personal wallet

stompix

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Quote from: JohnBitCo on December 06, 2020, 12:30:00 AM

Good exchanges do have some insurance funds and they can compensate their users if any mishaps happens. An example for such an exchange is Binance who have "SAFU Funds" allocated for this purpose.

And you really believe that promotional crap?
NO big exchange has enough funds to cover a real hack if their coldwallet security is breached and the hackers get their hands on those coins. The whole SAFU thing is just empty words, if Binance gets hacked for the +100k BTC they hold in one cold wallet there is no chance in hell you will ever see a penny, it's a closed shop and bye bye!

If they would really have a means to protect those they would insure them, but to date, no exchange was able or is willing to do so for all the funds, including Coinbase, and you can guess why, because nobody is willing to take the risks!

JohnBitCo

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Quote from: yemight600 on December 02, 2020, 01:09:44 PM

A friend told me few weeks ago to keep my assets in exchange because if the exchange got hacked or my assets are misplaced, the exchange will bear the lose and refund my assets. Just yesterday, someone told me it's a lie that most exchange will go bankrupt if that should happen. I'm really confused right now. More experienced members should please enlighten me.

Good exchanges do have some insurance funds and they can compensate their users if any mishaps happens. An example for such an exchange is Binance who have "SAFU Funds" allocated for this purpose. However small exchanges do not have any funds and you will lose the money in case there is a hack on the exchange.

As a golden rule, you keep only funds which you want to trade frequently on the exchanges and keep your holdings in your desktop or offline wallets.

tbct_mt2

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If you can control everything at beginning, why you don't control it.
If you waive out your control on your crypto, the only thing you can do is hope: hope exchange will secure their platform and keep your account safe. If their exchange is hacked, you only can hope they will pay compensation for you.

Newbies - Read before using exchanges or investing.

If you don't trade everyday, let's go with personal wallet.
If you trade everyday, trade with small capital portion on exchange and afford any losss from trades or from exchange compromises.

pakhitheboss

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I assume by assets you mean long term hold and if that is the case then you should keep them in your personal wallet and avoid exchanges. Keep on exchanges the amount that you might be using for trading, savings, staking and for other activities. Rest should be in your personal wallet. Although I do not recommend keeping anything in exchange but big exchanges are now much secure and you can keep some assets there. But, still DYOR.

Kong Hey Pakboy

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Quote from: yemight600 on December 02, 2020, 01:09:44 PM

A friend told me few weeks ago to keep my assets in exchange because if the exchange got hacked or my assets are misplaced, the exchange will bear the lose and refund my assets. Just yesterday, someone told me it's a lie that most exchange will go bankrupt if that should happen. I'm really confused right now. More experienced members should please enlighten me.

From my perspective, if you are doing a day trading or you trade regularly it's better if you keep your assets in an exchange for you to avoid spending expensive fees. But if you are only hodling your cryptocurrencies, it would be better if you store your assets in your wallet because many people says it is not safe to store you cryptos in an exchange even you used a 2FA.

I think exchanges will not shoulder the lose and will refund your assets if you got hacked because it still depends on the situation that they will investigate it, and it might be fault why your funds got stolen.

Tessnik

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Quote from: stompix on December 02, 2020, 04:56:55 PM

Quote from: yemight600 on December 02, 2020, 01:09:44 PM

A friend told me few weeks ago to keep my assets in exchange because if the exchange got hacked or my assets are misplaced, the exchange will bear the lose and refund my assets.

Probably he whispered the last part and you didn't hear it.
"...if you're lucky"

Does your friend know what happened from Bitcoinica and MtGox till Quadriga and Cryptopia ?
Here is a nice read for you and your friend.

Quote from: gentlemand on December 02, 2020, 01:49:02 PM

What sort of friend recommended such a stunningly stupid choice? They are saying it's good to be in an exchange in case it's hacked? If it was in your own wallet you wouldn't have this possibility.

One that believed things like "Funds are SAFU" or stupid claims about having x amount insured by some god knows what bank? How many scam projects and fake exchanges have claimed this in the past? There are plenty of newbies that believe a lot of things even worse than flying pigs, I'm not surprised somebody would think exchanges have some sort of reserve funds or the money is guaranteed by the government like in banks. Actually, I would be surprised if they would less a few thousand the ones that think like this.

I was beginning to feel sleepy when reading through the message the ops want to pass, how can one compares personal wallet security to an exchange, no matter what promised an exchange make on reserve to cover for loses I can never trust that. I prefer to be in charge of my found to I get strong security on my wallet rather then risking my found on exchange.

traderethereum

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Quote from: yemight600 on December 02, 2020, 01:09:44 PM

A friend told me few weeks ago to keep my assets in exchange because if the exchange got hacked or my assets are misplaced, the exchange will bear the lose and refund my assets. Just yesterday, someone told me it's a lie that most exchange will go bankrupt if that should happen. I'm really confused right now. More experienced members should please enlighten me.

It depends on your reason because if you want to trade daily or weekly, you need to keep your assets in the exchange and only send your profit to your wallet.
If you want to just hold your assets without the want to trade, your wallet will be better to hold because you control the wallet, and no one can steal your asset except you give access to other people to open your wallet.
If you want to trade, you need to remember that you don't have to use too big money to trade because the risk will be there, and there is no guarantee that the exchange can always protect your asset.
You have your assets, so you need to have a responsibility for your assets.
You can select the personal wallet that supports keeping for multi coins so that you can store all of your assets in that wallet.
Or you can just hold your asset in the hardware wallet.

CryptopreneurBrainboss

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Quote from: yemight600 on December 02, 2020, 01:09:44 PM

A friend told me few weeks ago to keep my assets in exchange because if the exchange got hacked or my assets are misplaced, the exchange will bear the lose and refund my assets. Just yesterday, someone told me it's a lie that most exchange will go bankrupt if that should happen. I'm really confused right now. More experienced members should please enlighten me.

The only funds that can be held on an exchange is your trading funds and it shouldn't be funds you can't afford to lose. If you're still into long term trades and using very large capital then you should move the coin to your personal wallets. There's more to just an exchange getting hacked that we're not encourage to leave our coin on their platforms. Centralized exchanges aren't any different from banks as they can restrict you from having access to your funds.

But with your personal wallets, you're in charged of your finance which is the beginning of your financial freedom journey. Exchanges that are less popular or anonymous would hardly take responsibility for the loses of their customers, majority don't even have enough funds for liquidity talk more of paying for lots funds. That advice was a wrong one, there's no good funds in exchange can do you. Coins you don't own the private keys aren't yours.

abokhalel2

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The worst thing is that the exchange itself can just freeze your account, take all your assets. Best kept in your personal wallet.

As for your question. Think about it yourself? If, for example, each person had $ 1,000 on the exchange and they were all stolen, how will the exchange recover all the losses?

Even so, there would be a lot of scammers.

yemight600

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Quote from: yemight600 on December 02, 2020, 01:09:44 PM

More experienced members should please enlighten me.

Most exchanges did disappear after big hacks, indeed.
Very few of the exchanges did actually refund their users properly, in full and in a reasonable time frame.
As already stated, one important saying in Bitcoin community is "not your keys, not your coins", another one is "be your own bank". So the safer is to withdraw and keep the coins safe.

But before withdrawing I suggest you do some reading (and maybe asking questions too) on how to keep your funds safe.
This is important because if you are careless or simply don't know what you are doing you can easily lose your coins.

mersal

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Quote from: yemight600 on December 02, 2020, 01:09:44 PM

A friend told me few weeks ago to keep my assets in exchange because if the exchange got hacked or my assets are misplaced, the exchange will bear the lose and refund my assets. Just yesterday, someone told me it's a lie that most exchange will go bankrupt if that should happen. I'm really confused right now. More experienced members should please enlighten me.

Only few instances the traders got refund when exchange got hacked because those exchanges are huge and got enough funds to fund such losses but it may not happen all the time so better keep your funds in a walket which is supposed to give full control of your funds which means you need to learn what you have to do to keep those funds secured from all those scammers.

blckhawk

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Quote from: yemight600 on December 02, 2020, 01:09:44 PM

A friend told me few weeks ago to keep my assets in exchange because if the exchange got hacked or my assets are misplaced, the exchange will bear the lose and refund my assets. Just yesterday, someone told me it's a lie that most exchange will go bankrupt if that should happen. I'm really confused right now. More experienced members should please enlighten me.

Yes, he may be right but are you certain that an exchange will bear all the lost funds? I mean if the exchanges have been hacked then it is automatically they made lose some funds as well thus will have a chance for you not to be covered up. Yes, you can store some of your coins into exchanges but don't make it as a wallet you supposedly use it to store a few of your funds to avoid paying huge fees. In regards to storing your coins, it is still obligatory to place it in your personal wallet. You shall not be afraid of being hacked because as long as you keep your pass from yourself and store it in a good place nothing to worry about.

friends1980

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As some others mentioned above, respected exchanges probably have insurance for theft (hacking). Also, in case of bankruptcy, these coins always remain yours (if, hopefully, they weren't stolen).

I've written several extensive threads on this subject and I think its importance will only grow bigger in the future, f.i. about the bankruptcy of Cryptopia: Cryptopia Judge: "1. Crypto is property 2. Even w/o keys, crypto remains yours"

So far the good news.

Remember, in case of bankruptcy, it will take a very long time before you get your coins back. If you have been speculating with shitcoins, there's a very high probability these shitcoins in the meantime will have become useless.

Check out the thread above for some more ideas on positive and negative sides of exchange vs. private wallet, flexibility vs. security etc.

In any case, if you're only planning to hodl and not to speculate or to trade, the safest place to keep your coins is in an offline paper wallet.

joniboini

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A general rule is to store some of your money in exchange if you trade regularly (only use 1 or 2 that are reputable on your country). If you don't trade at all, keep it in your own wallet. Don't gamble with the possibility of hacking or repayment since the risk is usually bigger than you expected.

Little Mouse

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If the hack is minor, exchange may bear the loss but in case it’s big, they will go bankrupt for sure. Your first friend have no idea.
To compare the better place to keep your crypto asset-
Would you love to keep your fund in your hand where you can do whatever you wish with the fund whenever you wish or you want to keep your asset to someone else who don't give you the control? Which one seems better should be the best.

Greatdev

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Quote from: yemight600 on December 02, 2020, 01:09:44 PM

A friend told me few weeks ago to keep my assets in exchange because if the exchange got hacked or my assets are misplaced, the exchange will bear the lose and refund my assets. Just yesterday, someone told me it's a lie that most exchange will go bankrupt if that should happen. I'm really confused right now. More experienced members should please enlighten me.

Only very few exchanges can take responsibility of things how wrong, it's better to take my advice and never trust your fund with any centralized exchanges either top or small, always move your coins back to your wallet, they are more safer in your own wallet, that's why we need to keep our wallets recovery seeds or private keys because that's the only thing we need to recover our funds if anything happen to our smartphones or PC, do not entrust your assets to any exchange

pooya87

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It depends on what you mean by "assets" and also your view of those "assets future".

For example I don't see any long term future for any of the altcoins, ergo I only trade them to make profit. This means I can never withdraw any of these altcoins to my wallet to "store" them locally because that would be riskier since it takes time to withdraw and deposit and altcoins get dumped in a blinking of an eye and I want to be able to act fast in selling before the dump gets bigger.
Another issues is that storing a lot of altcoins locally requires trusting either a lot of wallets or one single closed source multicoin wallet since I have not seen any fully open source ones. That process is tedious and highly risky. I can't go through multiple coin's code specially when majority of altcoins are not popular enough to trust someone else has already done it. And as I said the alternative choice is closed source so I can never trust them.

But when it comes to bitcoin, I believe in the long term potential and even if I trade it still is in favor of making more bitcoin so I would never leave it on any exchange more than it is needed.

RabbiTANK

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Quote from: yemight600 on December 02, 2020, 01:09:44 PM

A friend told me few weeks ago to keep my assets in exchange because if the exchange got hacked or my assets are misplaced, the exchange will bear the lose and refund my assets. Just yesterday, someone told me it's a lie that most exchange will go bankrupt if that should happen. I'm really confused right now. More experienced members should please enlighten me.

It depends on which exchange the hack took place, not all exchanges will be able about to do reimbursement after been compromised, some exchanges will go down and never recovers after a hack and that's good bye to your fund, do not listen to your friend mate, download a private wallet and store your coins in it not on exchange.

noorman0

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[Nope]No hype delivers more than hope

Saving in a personal wallet also does not guarantee security, as most of the risk factors are with you.
Also pay attention to the types of assets that you will store in your personal wallet. If you think that storing a centralized type of crypto will have no risk at all except from you, that's wrong.
We learned how the Kucoin hacker transferred a stolen asset to a personal wallet. And ... his assets are frozen in his wallet under his own control. It is a worry and gives rise to the belief that striving to secure assets to personal control does not guarantee safety from the control of others.

The most secure asset stored in a personal wallet is Bitcoin.

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