Why do people store their cryptocurrency on exchanges?

KennyR

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Quote from: tjtonmoy on January 09, 2023, 05:19:43 PM

Everything on the internet in vulnerable and if you can't keep your crypto safe then you should not own it in the first place. That's where newbies make the mistakes. They just go on and buys it and then after someday those assets of there is gone. And things about exchanges that it is like necessary evil. It is harmful, but you steel need them for certain task like trading or p2p selling, fiat converting etc.
But keeping your assets always on your exchange wallet is a bad habit. Newbies should always avoid this.

Agreed, we need to understand the risks associated with the internet connection. We're connected to the world. Anything could happen with our digital belongings. Most of the time people just leave the funds on exchanges not by purpose, but by situation. They just do trading and leave it for the access for ease of trading if there is supportive market situation. Transferring between wallets will cost as well as takes time for confirmation.

tjtonmoy

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Everything on the internet in vulnerable and if you can't keep your crypto safe then you should not own it in the first place. That's where newbies make the mistakes. They just go on and buys it and then after someday those assets of there is gone. And things about exchanges that it is like necessary evil. It is harmful, but you steel need them for certain task like trading or p2p selling, fiat converting etc.
But keeping your assets always on your exchange wallet is a bad habit. Newbies should always avoid this.

Lanatsa

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Quote from: Falconer on January 09, 2023, 03:48:13 PM

Quote from: batang_bitcoin on January 09, 2023, 03:40:49 PM

Easy access.
It's like that you'll just have to log in and boom, you can see your balance and if you want to trade, then trade it with other cryptocurrencies and have its value currently with a stable coin. That's how quick it is and that's why those that have huge fund are keeping it no matter what warning people have been telling them, they trust the exchange no matter what happens. It will be hard to convince them if they're the ones that understands the situation and yet, no action done.

Maybe this reason is true, because I also tend to think that some of funds stored in exchange, especially stablecoin, will make it easier for me to buy and accumulate bitcoin. Of course it wasn't much, but only in the amount one could afford to lose too.

But for whatever reason, I believe depositing funds on an exchange is an option that is never really recommended even if the exchange has a good reputation. I wouldn't do it in the long term, but for my needs in the short term it's still a possibility for me to consider. In the long term, all funds must be moved to a secure wallet where only we have control and custody of the assets we own. Just that.

Its one of the reasons too which im really guilty with this where i do need to store up some USDT came out from my crypto sell or conversion earlier for me to directly purchase or buy coins whenever i do see some

opportunities which it is really just not hassle and could directly possibly able to get in into those kind of chances which it doesnt really come often, since we are really that afraid on missing out those opportunity

then you would really be finding that storing your stablecoins on exchangers would be the key or something that could really save you up from the hassle which
is mostly the case on why people are really that a fan on using up these platforms.

Falconer

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Quote from: batang_bitcoin on January 09, 2023, 03:40:49 PM

Easy access.
It's like that you'll just have to log in and boom, you can see your balance and if you want to trade, then trade it with other cryptocurrencies and have its value currently with a stable coin. That's how quick it is and that's why those that have huge fund are keeping it no matter what warning people have been telling them, they trust the exchange no matter what happens. It will be hard to convince them if they're the ones that understands the situation and yet, no action done.

Maybe this reason is true, because I also tend to think that some of funds stored in exchange, especially stablecoin, will make it easier for me to buy and accumulate bitcoin. Of course it wasn't much, but only in the amount one could afford to lose too.

But for whatever reason, I believe depositing funds on an exchange is an option that is never really recommended even if the exchange has a good reputation. I wouldn't do it in the long term, but for my needs in the short term it's still a possibility for me to consider. In the long term, all funds must be moved to a secure wallet where only we have control and custody of the assets we own. Just that.

batang_bitcoin

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Easy access.
It's like that you'll just have to log in and boom, you can see your balance and if you want to trade, then trade it with other cryptocurrencies and have its value currently with a stable coin. That's how quick it is and that's why those that have huge fund are keeping it no matter what warning people have been telling them, they trust the exchange no matter what happens. It will be hard to convince them if they're the ones that understands the situation and yet, no action done.

molsewid

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Quote from: MiliMil on January 05, 2023, 11:26:38 PM

I am in the process of purchasing a Ledger Nano offline wallet and it got me thinking about why people store their digital assets on crypto exchanges.

These exchanges are susceptible to hacking, insolvency/bankruptcy, misuse of customer funds (FTX) etc.

What would happen if Binance got hacked tomorrow and lost the majority of its cryptocurrency? Would they be able to reimburse customers or would they become insolvent?

I asked my close group of friends how many store their assets on exchanges and only 1 out of 6 uses an offline wallet.

The recent incident with Luke Dashjr confirms that you are always at risk of being hacked no matter how vigilant you are.

Will give my thoughts on the Ledger Nano once I receive it.

Simple because some other want to sell their asset immediately once the market recover it will not get charge. They will believe that if they will rise and keep it. will be very harmful and sad. Also, the fee of device fee cannot ixecute maigi yung kasal. I rwammy don't know how but I knew the right person in many. bookls are real. It is really it is just gives celebratei in every issue.

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Quote from: Leviathan.007 on January 08, 2023, 06:36:47 PM

I can't give a reason of why people are sometimes holding their assets and bitcoin on exchanges because I've never done that, I personally usually won't use any centralized exchange even if the exchange is very famous and even after depositing bitcoins there I would withdraw my founds after doing the exchanges instantly instead of holding there.
But I guess most people will hold their assets on changes because they want their bitcoin and cryptocurrencies to be ready for doing any trade sometimes they will place an oper order for sale and their assets won't form the exchanges, the other reason can be the profit usually the exchanges offer for holding the assets there for long term.

That is mostly the case for some traders who still trust centralized exchanges because they want to easily trade their coins in the exchanges when the market is in bullish trend. But it would be more safe if those traders would only place minimal amount of coins to trade using exchanges as we don’t hold any outcome guarantees like it will be profitably done or not. And hacking could be very possible anytime in all exchanges operating online.

Mate2237

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It was your topic that attracted me to this thread. Let me not beat around the bush, but straight to the point. People are storing their coins in exchange because of the transaction fees and also for easy sell off at anytime they want. If you want to sell off your coins in a very short period of time, and you send it to your non custodian wallet which you will definitely pay a fee and later sooner you send it back to the exchange for sale which you will still pay another transaction fees again why can't you just keep it in the exchange and sell it off in any time soon.

RealMalatesta

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Quote from: Erumo on January 09, 2023, 06:36:31 AM

Coz people are afraid to take responsibility. They are afraid to fail, in case they lose they cryptocurrency. But, if they store cryptocurrency on a exchange and something happens to it, then its exchanges problem, exchange has failed, but that person is a victim, that accidentally store his funds there. People always prefer to blame others, then themselves.

And not for nothing neither. Taking responsibility in crypto world means that you are literally responsible for all of your own money. It's like storing at a safe in your house, people will want to steal it if they know where it is. Whereas if you store it in a bank, how could they steal it? That is the most important difference.

I keep all my money in few web wallets (this doesn't mean that I am against non-web wallets), I trust them more than I trust myself, but more importantly, if I stored it in my pc for example, that means hackers would want to have a crack at it, and I do not want to get hacked, even if they can't hack the money, they would bother me and why would I want to accept that as my future? It's better to let it be in safer place than my PC.

GideonGono

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Maybe they are just saving their time and fee for sending it when they need to convert it into Fiat, or maybe they don't really have other wallet than their trading sites.
Some of my relatives who also tried crypto only have exchange wallets they don't really have ledger or other wallet before I introduce it to them (Online Wallet like MEW).

Blawpaw

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Quote from: MiliMil on January 05, 2023, 11:26:38 PM

I am in the process of purchasing a Ledger Nano offline wallet and it got me thinking about why people store their digital assets on crypto exchanges.

These exchanges are susceptible to hacking, insolvency/bankruptcy, misuse of customer funds (FTX) etc.

What would happen if Binance got hacked tomorrow and lost the majority of its cryptocurrency? Would they be able to reimburse customers or would they become insolvent?

I asked my close group of friends how many store their assets on exchanges and only 1 out of 6 uses an offline wallet.

The recent incident with Luke Dashjr confirms that you are always at risk of being hacked no matter how vigilant you are.

Will give my thoughts on the Ledger Nano once I receive it.

I guess that is not only a matter of storing coins on exchanges. People will send their coins on to exchanges as they want to sell their coins as soon as there is a spike. At least many people I know does this. Other may store their coins on exchanges as they ate not clear aboit not your keys not your coins....

Outhue

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Some crypto exchanges have good staking rewards compared to direct staking from the project's platform, also people intentionally keep their assets on crypto exchanges for trading and a few other businesses like peer2peer business, that's why some people became a victim of fund losses when an exchange gets hacked.

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For people who prioritize investing, especially for the long term, saving money on the stock exchange is clearly a bit of a question, but as for traders, I think the reason is not far from them doing that for their trading.
Regardless of anything, actually something like this is not wrong, but indeed we cannot fully believe in it, especially with the several incidents that have occurred recently.

wiss19

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They won't just store it for no reason. They are likely a trader, p2p seller or a merchant inside the exchange, they can also do it for staking purposes, and many more reasons. That is if they are an experienced person here in crypto but for someone who is still a newbie, they can think that popular exchanges such as binance are very trusted so they use it for solely storing their funds instead of some crypto wallets. On your question if what if binance got hacked tomorrow?

I think that was a big disaster not only to those who keep their money inside it but also for the crypto market as a whole but I heard binance offers some reimbursement. Not only sure though if there are specific requirement for this.

Erumo

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Coz people are afraid to take responsibility. They are afraid to fail, in case they lose they cryptocurrency. But, if they store cryptocurrency on a exchange and something happens to it, then its exchanges problem, exchange has failed, but that person is a victim, that accidentally store his funds there. People always prefer to blame others, then themselves.

Ziskinberg

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Quote from: Patrol69 on January 08, 2023, 09:30:56 PM

I think people may hold their digital currencies in wallets of different exchanges to ensure safety. I think exchange wallets are relatively safe compared to other hardware wallets. No one would want their accumulated wealth to be unsafe. People may deposit their digital currencies in exchange wallets due to greater security and convenience. Because if any currency can be kept in the exchange wallet, then those digital currencies can be converted in different ways at any time, but there is no such facility in the hardware wallet. Therefore, thinking about security and convenience, people may deposit their digital currencies in the wallets of various exchanges.

I will say no... Putting our money into an exchange wallet is risky. Even though it was spread to different exchanges, it is still the same situation and you will lose your money instantly if deposit to scam exchanges. I don't know where you get the idea that it was safe than using a hardware wallet because if you only see what happens to FTX and many other exchanges that ended scams where a lot of holders/investors had lost their money, it surely will open your mind.

Have you heard that someone loses their money by using a hardware wallet?

WatChe

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There can be multiple reasons for this strategy. If I talk about myself then I have to rely on some exchnage to convert my crypto into fiat. Since crypto is totally illegal in my country and anyone caught in this business will go to jail.
One other main reason for keeping crypto in exchnage is people who do day trading, it only possible if you have account in some exchnage. I do agree that crypto on centralized exchnage is not yours, "not your keys, not your coins."

Hyphen(-)

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Quote from: MiliMil on January 05, 2023, 11:26:38 PM

I am in the process of purchasing a Ledger Nano offline wallet and it got me thinking about why people store their digital assets on crypto exchanges.

These exchanges are susceptible to hacking, insolvency/bankruptcy, misuse of customer funds (FTX) etc.

What would happen if Binance got hacked tomorrow and lost the majority of its cryptocurrency? Would they be able to reimburse customers or would they become insolvent?

If Binance got hacked today, the news will be every where and would be worse than that of FTX and other exchanges hack due to how people are using Binance.

Despite FTX, LUNA and other exchanges hack that lead to the long bear market, people are still keeping their coins in Binance which means people have good trust in Binance despite not being right to keep our coins in exchanges but people are still doing it , i don't think they will stop.

Quote

I asked my close group of friends how many store their assets on exchanges and only 1 out of 6 uses an offline wallet.

Sometimes most people think it is difficult to use offline wallet because they lack good knowledge about the wallet, and some beginners are exposed to exchanges like Binance as a start for easy access to Bitcoin or crypto trading.

Some lack knowledge about privacy and did not know about the risk involved in keeping coin in exchange that's why they prefer exchange for easy access.

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Quote from: MiliMil on January 05, 2023, 11:26:38 PM

I am in the process of purchasing a Ledger Nano offline wallet and it got me thinking about why people store their digital assets on crypto exchanges.

These exchanges are susceptible to hacking, insolvency/bankruptcy, misuse of customer funds (FTX) etc.

What would happen if Binance got hacked tomorrow and lost the majority of its cryptocurrency? Would they be able to reimburse customers or would they become insolvent?

I asked my close group of friends how many store their assets on exchanges and only 1 out of 6 uses an offline wallet.

The recent incident with Luke Dashjr confirms that you are always at risk of being hacked no matter how vigilant you are.

Will give my thoughts on the Ledger Nano once I receive it.

People store cryptocurrencies on cryptocurrency exchanges where they can be traded and bought and sold easily. They don't really have the knowledge and skills to keep them in their wallets for long periods of time. It is also possible to profit when the currency price rises in the exchange. It is also possible to earn profits through staking and lending.

Patrol69

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I think people may hold their digital currencies in wallets of different exchanges to ensure safety. I think exchange wallets are relatively safe compared to other hardware wallets. No one would want their accumulated wealth to be unsafe. People may deposit their digital currencies in exchange wallets due to greater security and convenience. Because if any currency can be kept in the exchange wallet, then those digital currencies can be converted in different ways at any time, but there is no such facility in the hardware wallet. Therefore, thinking about security and convenience, people may deposit their digital currencies in the wallets of various exchanges.

Topic: Why do people store their cryptocurrency on exchanges? (Read 674 times)