Topic: Why non-trader beginners prefer to leave their BTC on CEX? (Read 418 times)

Of course, but by educating themselves on the subject, people can still consider owning their own private keys, even if they started out using a CEX as a wallet.

"We've always done it this way" is probably one of the worst mottos possible to have in mind in the cryptocurrencies world. Keeping yourself informed, and understanding what you're doing is more than important when it comes to crypto or finance.

A part of the essence of Bitcoin is to own your funds for real. So even if you're just starting out on a CEX, if you do the minimum amount of researches on the subject, you'll quickly understand that it's neither smart to persist in this way, nor in your own best interests.

In some cases people are neither lazy nor irresponsible!
I don't know how to best explain this to the understanding of many, but I have to try. There is an African adage which says "A child knows only the way through which his Father passed to give him a land site for building". In some African culture, when a male child is upto an adult and wants to build a house, his father and kinsmen will have to show him a portion of bush to build. The adage emphasised that, that very track through which the child's father showed him the site, will be the track the child will use even after building the house.

How does this relate?
This means that, the very path through which a newbie is introduced into cryptocurrency will be the track they will follow and it will need hard work and strong campaign to convince the newbie that they are on the wrong track.
What do I mean?
More than 80% of newbies in cryptocurrency joined from exchanges. I mean their first wallet is an exchange. It will be difficult to leave the exchange. Another African adage supports this, that, "No one learns how to use the left hand at old age"

Newbies will definitely stick to what they are taught and what they believed in, as they are not still exposed to the real risks when leaving their BTC on CEX. They may have heard it from others, but since they have not felt or experience the risk of losing yet, then it will never convince them to open non custodial wallet instead. But as they go on trading and discover a lot of flaws from CEX, maybe they will start trusting their own non custodial wallet before they will come to experience the risks and start losing all their BTC.

You have pointed out some good causes from which we all might pass through. For example, I also used to use CEXs and still do. But as you said even I don't have to do trading but still I use CEXs to hold my earnings. One of the reason is, I have to withdraw some money for my daily expenses. So, if I will use any SPV wallet I have to send amount from SPV wallet to CEXs wallet which will cost me around 2$ to 3$ in BTC trade. But will not cost me when I am directly receiving money from someone in my exchange and from there I can easily use it for p2p purposes if I have to.

Other than this, I also prefer to use CEXs to hold some money because sometimes I need other tokens like for transactional purposes I needed some AVX, Matic, etc. So, I save some money in my CEXs. And I know you are not referring to small amounts instead referring to big amounts. Actually CEX provide us at least some security I know it provide no anonymity but security is if enough to save some BTc in it then why going for a Hardware wallet which is also difficult to buy in a country where crypto is ban.

But still people are using CExs because they don't know how to use others. Here comes laziness that you were talking about OP. Overall, we should really migrate to non custodial wallets or hardware wallets if we wanted to save some or more BTc. Because if your don't own the key then you don't own the coin also.

This supports your idea that part of the users are not aware of the existence of decentralized platforms and therefore they perceive that there are no alternatives. The matter can be studied from the other side, as decentralized trading platforms do not promote themselves and do not launch advertising campaigns to introduce themselves in the market. This strengthens the position of the central platforms and makes them almost capture the entire market.
There is no denying the integrity of many service platforms, which helped many to enter the crypto space safely and open the way for them to greater horizons.

In reality, there is none we can be entirely sure that an exchange we pick will not suffer a hack overnight but assuming someone is experienced in the crypto space still they are willing to leave the funds on exchange then we can safely assume that they got enough risk appetite but a newbie who just started with something that is only affordable can't afford to make mistakes.

But the knowledge comes with experience and cost if we are unlucky, I was using coinbase for a while for day-to-day transactions because it felt it is cheaper and convenient I moved to Electrum only after I realized it was a mistake. Luckily I didn't lose a dime with the lesson but it can't be the same for everyone.

It's not only because they were only taught about CEXs. I am sure there are people who don't know about DEXs so they only know about CEXs and use CEXs. In opposite, there are other people who were taught about both CEXs and DEXs and even more about custodial wallets and self-custodial wallets. With them, it's only their choices to use CEXs and custodial wallets. Because they look for convenience, not for security.

They surely must learn and practice gradually and I agree with you that it is not terrible if they started with CEXs or custodial wallets. If they can learn and practice better for their security, for their funds and change to use DEXs and self custodial wallets, it is good for them.

This is a good example, it’s not always about laziness, it depends a lot on habit, if a person is used to always being served a spoon for dinner, then this is normal for him and he will expect that it will always be like this. In addition, not everyone knows how dangerous it is to keep money in a bank, or coins on the exchange, there are those who really believe that the state can take care of their money if they keep it in a bank, the same goes for CEX.

This intellectual laziness that only grows...


This famous intellectual laziness is also linked to what you have just said: the lack of responsibility for decades in all areas. The fear instilled in people so that they no longer take any initiative and that they no longer has any critical spirit. They just do what the majority does.

I still want to add one very important thing: time. Indeed, the cost of living increases, it is often necessary to work more. If you want to raise children, you need money and time. So how, after a day's work, do you find the time when you also have to take care of domestic chores and take care of the children?

Exhausted by such long days, how can you still find the resources to learn?

And I come to the point that seems crucial to me: in almost all societies, it is women who still take care of domestic chores and take care of children, wouldn't this be what makes them less numerous in the cryptosphere? For my part, I used to read a lot at night, after a day's work and after taking care of the house and the children. Physically it is difficult to hold these "double days". Finding time for yourself when you're a mom is not so easy (I'm not talking about wealthy people of course, who have nannies, cleaners, cooks...)

Making sure that people are in debt and have to work until they make a burn out is a clever policy of governments which thus have sheep citizens who, from exhaustion, no longer have the strength to reflect, learn or cultivate their critical spirit.

Finally when some end up being interested in bitcoin despite everything, it will be superficial. A few satoshis on a CEX and that's it. Probably the youngest, without children, will imagine being able to make a fortune quickly (by failing to actually train in trading). They will end up losing their coins on the CEX or being scammed. They are the same ones who lose fortunes in gambling (even if sometimes they have children and are still able to burn the family budget)

We should not forget that it is never easy for a beginner to understand the basics of privacy provided by the blockchain when his first goal is to make a profit, nothing more. When Bitcoin is presented to him, it will be easier to rely on his banking culture, and this, in my opinion, is the easiest way to make it seem easy to him.
This is understandable for beginners, while the problem is with experienced users, who, despite their relatively long experience, still depend on central platforms for storage. These users certainly don't care about the principle of privacy, and on this basis they don't even care about the features provided by the blockchain until they get into trouble.

Because they are only taught about CEX and how they can be useful in buying and selling their coins, but they were not open on the possibilities that any time of the day, their coins will just vanish like a thin air when everything in CEX gets into troubled or compromised. And that they are closed to the idea that decentralized exchanges also exist, and that they are more reliable when leaving coins even in an indefinite time.

First I was talking about beginners who do not trade. Who do nothing special (Hold =/- DCA) and who should therefore rather use a cold wallet. Then I don't think we are in disagreement: at the beginning certainly for all the reasons I have listed, you feel more confident on a CEX. It seems easier and more secure and then we understand that it is not difficult to have a cold wallet.

The case of your wife has nothing to do with the subject: indeed if she knows nothing about bitcoin and she has to recover btc on a CEX or a cold wallet, it will be the same thing. She will have to learn. In addition it can even be more complicated on a CEX: indeed she will need your password, access to your phone, access to your email. Whereas with a cold wallet, you leave her the keys and she will have immediate access.

And it's up to you to explain to her now what she should do with it, or at least explain to her that your bitcoins have a value.

We have all been brainwashed that keeping our money , investment and control of our finances in general with centralized bodies are the best decision and we bought into the government lies which is why we're unconsciously draw to trust centralized platforms like exchanges instead of trusting our own ability to safeguard our investment. Non traders prefer exchange because they don't have to take responsibility if anything was to happen to their investment. They prefer to blame others than to blame themselves, this exchanges know this and they make their platforms very easy to use and understandable to gained the trust of the newbies to trust them with their coins.

If you have used any centralized exchange you'll understand why newbies prefer to store their coins on exchanges (which is totally wrong). This exchanges are very user friendly and they have other motivational benefits fo holding coins on their exchange. They have staking and saving features that enables all users that have coins on the exchange eligible to receive reward. The exchange are just manipulating their customers into leaving their coins on their platform but this is absolutely wrong as we should only store coins on wallets that give us full control of our private keys.

The question in OP said non-trading beginners. So, we should assume the  beginners are not traders and yet they leave their funds on the CEX.
On the contrary, I have a question. If expert traders can leavehuge funds on exchange for trading purposes, why new comers cannot leave few dollars?
I am not saying that leaving funds on the exchanges is a good habit but then while choosing an exchange try to chose a reputable one that is not winding up tomorrow, so that you will not kill yourself because you forgot to transfer out your money.
Exchanges should be used as Exchanges and not as a personal wallet.

Answer is easy because they think its more convenient for them to leave their balances on exchange since they could able to trade it easily when a time they need to use those exchange. Although this is dangerous because we know hacking issue on exchange exist but this is reality since its also hard to transact especially when the feed is so high. We just need to be aware that we should not do it on huge balance and only those small ones where we can afford to lose since the risk of losing still there.

We are talking about the same things. Those people who are willing to accept help from others—why don't they do it themselves? Why don't they study everything themselves? In this case, laziness and irresponsibility become synonymous. Being your own bank is not difficult, but you need to make a little effort. The problem is that these efforts need to come from somewhere. For people who are accustomed to comfort, it is much more convenient to shift their responsibility to another; it will be the bank or the one who decides everything for them. People who are accustomed to comfort turn into fat, stupid, and lazy people whose problem is the laziness of their own brains.

People are not only lazy, they are irresponsible. They prefer that other will take responsibility and duty to manage their life. They store crypto on CEX, they store money in banks, they use path navigator show them, they wait for others to do their work, instead of going home few minutes from school or work - they wait for being picked up, they wait when someone brings them spoon so they can start eating soup, while they can stand up and get that spoon themselves and etc. There are many more example when people wait until others do something, so that they can continue. I dont think that people are lazy, they are used to comfort and situations when others do things instead of them. They keep funds on CEX, but if someone offer help and move funds to their wallet, they would accept that offer without hesitation.

All right, OP. Most people are lazy. I read your post with interest, but I couldn't read all the posts, realizing that, in theory, everyone will be talking about the same thing. People are lazy, and many more think that what happens to someone will never happen to them. Human negligence turns into their own experience, after which people sober up and either begin to become neater or step on a few more rakes to understand their mistakes.
Speaking about the use of wallets, in fact, you need a lot of attention and a desire to understand. This applies to everything: someone is afraid of Linux systems, seeing them only as a command line, which seems to them like a monster, and someone simply does not want to read the network security manual. Knowing that CEX cannot be trusted, someone still leaves their funds there. There are two types of novices: some learn from the mistakes of others, others from their own. And this cannot be changed; everyone has a choice.

This is exactly my point you summed it up nicely! People (Non tech) wants someone/somebody to keep them safe. An exchange is not as bad as you think, consider them like a bank. I know I know the point of crypto to move away from the middle man. But again we need that for some type of people who still want to be protected by someone.

How many people lost their coins/btc lots of it because they did something wrong with the priv-key, or lost a hardware, or lost something? That will not happen in an exchange. I remember reading a post back in 2011 where a guy spend on his wallet and lost 9000 BTC, the story is famous he did it on a Image/CD linux boot system which means the files disappear after one boot.

Now tell a non-tech grandmother to do this with blockchain and privkey, pubkey...she will go mad, she wants a CZ or someone else to keep her funds safe and she just must save her FACE-ID with little bit of extra safety added in email, 2FA in email, 2FA in google, 2FA in exchange acc. Then she's good.

It relies on what you choose to use and to store your fund. If you choose fiat currencies, gold and store it at banks, vaults, you don't control your assets. If you choose to store it in vaults at home, it will cost you a lot of space for a storage location.

If you choose altcoins with smart contracts, they can become zero value if developers mint more tokens from thin air like Do Kwon did.

Bitcoin is a safe heaven to have an own bank and there will be no freedom of minting from thin air like tokens.

Having our own banks requires us to secure our own banks. So we must maintain our secrets, privacy and anonymity as much as possible. If we live like offlline, nobody knows us to have bitcoin, Bitcoin wallets, nobody will hack our wallets.

If we publicly talk a lot on social media about our investment in Bitcoin, we will have more risk.