Topic: Why do people store their cryptocurrency on exchanges? - page 6. (Read 685 times)
People store their coins in exchanges because they pay interest over customers' funds. Between storing crypto in offline wallets and earning no passive income and storing online and earning passive income, some people prefer to choose the second option. However, due to the presented issues crypto investors are facing nowadays with exchanges services, it's really not a good idea to keep money in the exchanges. The risks are too high and there are no protection from authorities to customers, in bankruptcy or scam hypothesis. If at least authorities guaranteed protection to investors, it wouldn't be too risky to let funds at online platforms.
The recent incident with Luke Dashjr confirms that you are always at risk of being hacked no matter how vigilant you are.
If you think you're 100% safe after you hold your coins on hardware wallet, you're wrong. This because you're need to use an online software to integrate with your hardware wallet, this mean if your computer already get infected by virus and you're not aware with that, your hardware wallet could be compromised especially if you write the private key or seed phrase on your computer.Hardware wallet isn't a perfect storage to combat any virus, but it's 99% way better than holding in exchange or online wallet.
why people store their digital assets on crypto exchanges.
It depends. Some newbies who never bothered educating themselves about cryptocurrencies and bitcoin do it because they think that is the way to store them! For a very long time I saw people who thought blockchain.info is like PayPal and is the "owner" or "creator" of bitcoin so you have to only use that site if you wanted to use bitcoin!!!
Others who are short term traders do it because they know that altcoins pump and dump nature requires them very quick access to their shitcoins so that they can dump them in an instant instead of having to make a deposit and in some cases having to wait for thousands of confirmation before their account is funded and they are allowed to dump them.
Quote
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?
It depends on what happens to Binance after the hack. If people all go away, specially if after the hack another "good CEX" comes along and takes all their customers away, they could go under and won't be able to pay their users.After all that is what Binance did to the previous exchange that got hacked when they took all their customers away and pushed them under.
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.
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.
Jump to: