Topic: Why does Bitcoiner still support the use of centralized exchanges? - page 4. (Read 1246 times)

I use Trust Wallet just to keep very small amounts of cryptos because I find it very easy to use on the smartphone, I don't use it for anything else, I use a cold wallet to store the other cryptos and I'd never recommend Trust Wallet to someone to be used as their main wallet. At the same time, as I said, I don't think that creating FUD about anything CEX related is somehow helpful for the community and for the people who are approaching this world for the first time. It would have been enough to say that there's been a bug in Trust Wallet, under very particular circumstances and for a very short period of time, that affected a minor number of people and that Binance itself refunded all the users who lost money (approx $170k, so probably what they made by the time I wrote this message ) instead of simply saying "There was a vulnerability in Trust wallet in which it generated key pairs and addresses in a insecure manner" because that message, in my opinion, that message was very general and left a lot space for different interpretations

The word 'force' does not exist in the BTC community, it is a permissionless network and community, if you want to use it without learning from those who have more knowledge that you, then it is your choice and if you lose your BTC, it is your money that is lost. In a decentralized network there is freedom and not force, that's why real bitcoiners encourage people to use BTC in a decentralized way because centralized exchanges can confiscate your funds and force you to do whatever they want, or you will lose your money.
Even before ftx collapsed they were not reliable, only when you have your keys should you be comfortable.
It is always fud until they bite the dust, while all the information you got about this current case is correct, it does not make Trust wallet a recommended one to use, i would not recommend a wallet that's closed source and owned by Binance to people, we all know how Binance operates.

Earth is full of different types of people, some are tightly adhered to a centralized system which is there for many decades and some are loosely adhered to centralization so they understood the features of decentralization. Most people on earth use the internet and almost 70% to 80% of them are already using centralized platforms like this post will give you an idea. The Op has emerged with the same query that and related to yours so i hope it could benefit you.

You just asked the same query in an alternative way like why there is less adoption of decentralization and vast adoption of centralization. The answer still remains the same. for example, if you have a family business of a bakery, or of any cooking industry, and your elders are making dishes with some secret ingredients and you have adhered to use those ingredients so that the taste remains the same so that the consistent customers remain permanent customers.

Same way, governments, and authorities are like those elders who have made you to tightly hold the tradition of using the same ingredients and restrict you to think outside the box so that they can control you with no or fewer efforts. And that's what they are doing now, you must read this thread of Social media, now looking more for business than for socializing. which emphasizes the importance of a global village to control each and everything easily. As we can no doubt make transactions on the internet as a global village, but this global village also made it easy for authorities to control us and spectate us.

It's mostly because people have given more importance to the store of value and has completely ignored the main objectives of bitcoin.
People use it as an asset for trading and investments and the only place where it can be easily feasible is a centralized exchange.
This is the reason why many bitcoiners tend to encourage the use of centralized exchanges so that they can trade it and gain profits on it.

As o_e_l_e_o noted above, centralized exchanges pose huge risks in so many ways at once: while bitcoins are in their accounts, these coins are not in safe; as long as your data is held by any such organizations, it is not safe. Perhaps centralized exchanges provide a service that looks convenient and pleasant, but behind it lies the grin of a soulless organization that is not interested in the safety of users. I think that if bitcoin enthusiasts sometimes use centralized exchanges, it is unlikely that they use those require KYC. A centralized exchange in itself is not a good thing, but KYC is downright evil.

I did a little research, are we talking about this?
According to an incident update shared by the company, the vulnerability only affected new wallet addresses generated by its browser extension between Nov. 14 and 23, 2022. The vulnerability could allow attackers to execute malicious code on the users’ devices and steal their funds.

It's a very limited case since it's related to a very short span of time and also linked to a browser extension, and it affected only new wallet, reading the previous comments I thought it was something that affected every single Trust Wallet user, which would have been way more dangerous.

Anyway I also read this:
Trust Wallet has assured its users that it will pay back eligible losses from hacks due to the vulnerability and has created a reimbursement process for the affected users.

This is the link to the source of the info I copy-pasted: https://www.binance.com/en-NG/feed/post/449497

So, as I see it, it's just a lot of unnecessary FUD, business as usual.

With the recent case of FTX is there any comfortability and reliability on centralized exchanges again?
As I go through the response from my senior members in the forum, I understand how risky it is to rely on centralized exchanges, and I understand that we can buy our Bitcoin from them and send them to our wallets not to leave the Bitcoin in there.

Bitcoin has zero anonymity features, sorry mate, this digital asset is not a privacy coin like Monero or Dash, if you want to stay anonymous using Bitcoin you will need to use a mixer service. Your point is accurate and I use to ask myself why too, it's like people are using Bitcoin in the wrong way, no amount of Bitcoin should be deposited on any centralized exchanges from the first day of launch, but we can't control the people, we can only make them see reasons why Bitcoin was never built this way in the first place. Bitcoin is better running through DEX exchanges but we can't stop anyone from using centralized exchanges, all we can do is to warn them not to store their Bitcoin on any CEX.

I don't think any serious Bitcoin enthusiast would endorse centralized exchanges. Decentralized Bitcoin exchanges existed prior to the dominance of centralized exchanges, and the primary reason for the latter's growth is their proficiency in marketing and promotions, as well as their ability to influence politicians and gain their favor to operate in a given country. Additionally, since the world is already entrenched in the banking system, many individuals prefer the ease of use of centralized exchanges. However, the drawbacks of centralized exchanges far outweigh any benefits they may offer.

Another reason why I think Centralized exchanges are everywhere is that the pseudonymous nature of Bitcoin makes it difficult for governments to regulate transactions,  they prefer centralized exchanges where they can quickly verify users' identities and transactions and freeze assets if necessary. Governments understand that they cannot control coins that are unidentifiable or untraceable, hence the need for centralized exchanges to silent decentralization.

Actually, I agree with what you said about bitcoin being designed only for one purpose—transactions without a middleman. But thanks to modern technology and the ways in which new generations are embracing bitcoin locally, I believe that people use bitcoin as an investment because it is so secure and because there are so few jobs in their societies. Bitcoin is a way of life both now and in the past. I'm curious as to how someone may participate in the bitcoin market while refusing to use CEX, which we all know is crucial if we want to enjoy using bitcoin.
When some people, such as some wealthy people who use bitcoin today, hear about it from the other side as a wise investment, they may change their minds and carry on with their previously positive transactions after learning about another, less complicated method of transaction.

That's true. Exchanges are mostly used by people who just want an easy way to invest in Bitcoin but don't care about anonymity, or just didn't do their research and not looking for a better way to store it. I always kept my Bitcoin in a non-custodial wallet, I'm using OWNR, but there are a lot of other options. A cold wallet is the best way to store Bitcoin, but IMO only if you have a lot of Bitcoin.

Some reasons that I can think of to answer your question:
- Convenience - People like to instantly move to and from their bank account and would sacrifice their anonymity and privacy to be able to do so.
- Fear - Most tend to believe that by being private, they might be seen as doing something wrong.
- Ignorance or lack of knowledge - Whether it is by choice or not, people may not realize that privacy, anonymity, and decentralization are beneficial to them. Or, they simply do not know how to properly achieve it.

I suggested a Cybersecurity & Privacy board which would address these kinds of matters, which would help people to become aware and learn how to uphold the key principles of Bitcoin.

In my view, the reason why Bitcoiners still use centralized exchanges can be explained by several factors. One of the main reasons is the convenience and accessibility that these exchanges offer. They make it easy to buy and sell Bitcoin for fiat currency and have a user-friendly interface. Moreover, centralized exchanges tend to have better liquidity, allowing for quicker trades at favorable prices compared to decentralized exchanges.

This isn't true at all. Once you send your coins to a centralized exchange, they have full control over them and you have no freedom whatsoever. You have absolutely no guarantee you will get your coins back and you have no guarantee that the centralized exchange will allow you to use them or spend them in the way that you want.

Have you not been paying attention to the news? FTX, BlockFi, Celsius, Voyager, 3AC, the list goes on. Literally dozens of exchanges in even just the last few months which have collapsed and taken all users' funds with them.

There was a vulnerability in Trust wallet in which it generated key pairs and addresses in a insecure manner, allowing funds to be stolen. It wasn't via social engineering.

People simply don't care until it affects them personally. We see small centralized exchanges collapse or scam all the time. But lots of people on here, Reddit, Twitter, etc., were sure that the likes of Celsius and Voyager were too big to fail and were perfectly safe, right before they lost everything. Then everyone was definitely sure that FTX was too big to fail, right before they lost everything. Now everyone is definitely sure (for real this time!) that Binance is too big to fail.

The same applies to your data. Everyone is happy to send all the documents needed to steal their identity off to literally any random internet stranger that can set up a website or copy the code for some shitcoin. Nobody cares until suddenly their identity is for sale on the dark net and they are now on the hook for $100,000 in debt someone else took out in their name.

It is fascinating how you and some other Bitcointalk members relentlessly repeat the problems that come with the usage of CEXs. KYC, no KYC, privacy, no privacy, those aspects seem to be too superficial for some users to actually grasp the far-reaching consequences that the usage of CEXs can bring about later down the road. Tons of data is being collected and for most of those users the digital fingerprint is already perfect from the perspective of governments and other interest groups (hackers).

But my first thought often is that most people who think using CEXs is safe are often those who haven't burnt their fingers yet. I admit I have burnt my fingers and it helped me questioning my trading behavior far beyond what I initially thought is appropriate. Getting your funds frozen can be extremely distressing if the exchange literally blackmails you for an almost unlimited amount of proofs. I have had that in the past and I actually decided to let my funds go because I did at least take the precautionary measure in my mind to not deposit so much that I could be forced into providing whatever they ask me to provide.

I burnt my fingers twice. The above mentioned example was the second time. The first time the exchange just went offline. That is quite a couple of years ago but happened in the right time for me because that was when I was still experimenting. It was definitely hurtful because in relative terms I lost a lot of my crypto holdings.

As of today the funds I hold on a CEX is $0.00.

The saying 'don't risk what you can't afford to lose" applies not only to gambling, but also to keeping funds on a CEX. In essence, doing that can be very similar to gambling. I do understand some people who own so little that the transaction fees would be too much of a financial burden, but I think that trading makes even less sense in that situation. Rather try building a sufficient portfolio even if it takes time, but keep it off-exchange.

The question is how do you know that?,

maybe not at all, some of them do not support centralized exchanges and always avoid the KYC.

But sometimes you won't get the hard life, In centralized exchanges you will get it easy, you can easily exchange your assets if the price starts to pump, and exchange also guarantees your asset is not lost if got hacked, Even if it's long and need a time (maybe over 10 years or never?)

Then I'm sorry but I don't get your post: people scam other people with social engineering over everything, cryptocurrencies are just one of these things, so why did you make a post publicizing this "new scam going on with Trust Wallet" like it's something Trust Wallet related? Social engineering doesn't work with Ledger or other wallets? If someone is so naive to give away his seed phrase the problem is not the wallet but the person, no?

Some people are lazy, some are complacent, some aren’t very tech savvy & don’t trust themselves to self custody, maybe they don’t even know how to.

I think whilst bitcoin has been around since 2009, it’s still a relatively new tech. People just aren’t very educated on it. It’s sad but sometimes people get burnt when they play with fire.

It absolutely has nothing to do with binance or trust wallet and it's just the social engineering as usual and if I'm not wrong,these scammers have to guess the seed phrase of these accounts and anyone that is gotten correctly, it's been wiped mercilessly.

Apart from the fact that they have the possibility of folding up without getting to let users have their money, I really enjoy using centralized exchanges and I think these exchanges have leveled up and wouldn't just vanish with users money and the case is with that of paxful because I think they're now respecting their users.

Hey mate! I know that you have also used the central exchange platforms for transactions and you know the purpose of those platforms and also know the basic concept of Bitcoin. Those central platforms are carrying out some of the purposes and functions of Bitcoin. Those are the digital banks bitcoin, so bitcoiners use those platforms to make fast and easy transactions. There are some locations that there are no vendors so in such location your have to use the exchange platforms for the transactions.

Your financial freedom with Bitcoin is still guarantee because the exchanges do not or can not have access to your wallet. And the main thing is the wallet. It is when you transfer your coins to the exchange that you will make the transactions.