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.

this is a nice post probably we have different opinions but people who work on IT priorities securty, before anything else aside from making things run smoothly, its is said that IT don't work too much but thats not the case when you are there already, there are works to be than when someone messed it up,
On newbies who left their coins i may add that, its not that they have less knowledge or experience some people wants it in a non complicated way, that is why they put their money on an exchange easy to access without knowing the risk of it, also they are afraid since there are some who gave a wrong links and think their funds will be hack or lost.
They maybe also don't know how to use other wallets at the moment but as time goes they learn other things on the process.
I think the best way for this newbies is to to teach them first how to use wallets , securing things , before teaching them to use CEX,
This is what I do when a friend wants to invest in crypto teach them how to secure and learn precautions before anything else.

As I've repeatedly said, it's not that easy to be your own bank. Having full control of your money in this digital age isn't just like storing them inside a vault in your room. It entails a lot of responsibilities. Safekeeping your money means looking for the safest wallet. And there are certain criteria for that. So, that means you need to do some research. Looking for a safe wallet is different from keeping that wallet safe. There are a number of dos and don'ts for it as well.

And then your responsibility extends outside your wallet. You will have to be careful in dealing with emails and PMs in your social media account. You need to be vigilant in downloading apps, clicking links and ads, and so on. You should also learn how to safely store backups. If possible, you should also have some knowledge on encryption. You must also familiarize yourself with sim swap attacks, dust attacks, and so on.

Even though I feel everyone will disagree with me but I'll raise my opinion anyways and not care...I am not always right btw but thats just how I feel

I agree with you on few points of course, but I disagree with other points...mainly you calling people who use CEX are newbies, If you consider me as a newbie which I might be then thats fine, the word itself doesn't bother me. But I held my first bitcoin by sheer luck back in 2013, I did not even know what wallet is, someone tough me how to open a wallet and I did as he instructed then received my first ever transaction. It was an xapo wallet back when it was free of use. Regardless of that I hold some coins in my cold wallet/metamask/electrum and some on exchanges as well. and I do actually prefer the exchange over my other wallets and here's why..its all a matter of person opinion.

1) swapping/selling/buying/withdrawing. Its all easier on an exchange than a normal wallet where you need to find a DEX to swap coins, approve a transaction with a fee, then pay another fee to transact. In an exchange however its noe fee.
2) p2p going in and out of the exchange is made simple, with zero fee's I can swap my coins/usdt into my countries money and vice versa, safely and easily.
3) not my keys not my coins right? but if the exchange is real solid I can trust that my coins are safe. Trust me I know what happened to FTX and other exchanges I am aware....but I didn't choose ftx 7 yrs ago for a reason, you must conduct a good research.
4) you have many options in an exchange like farming,trading,options,saving,liquidity farming.....I know i know you can do those also in a dapp farm but again its not as easy, you need to find the good dapp first, you need to double check their website everytime & see results, ultimately in the exchange its all in one place.

Meanwhile the disadvantage of the metamask/coldwallet/electrum is that if you want to do anything with your wallet its too much work, allow me to elaborate. We need to first initiate & set mind for the man/lady who will use their wallet ok? To do this we need to get out of my own bodies & what we know, and we need to get inside of the body of a man/lady who is not a computer savvy, in other words someone like your grandmother. I am completely honest here, for crypto world to succeed we need to think of these people. I am not only saying they are old and not into technology but what I am saying is, alot of people even youngster are still like that. An example is my wife, she is not a computer/tech savvy & will never in a million year could learn about transactions, hash, pulic/priv kes, trx, dapp, dex, cex, and much more.....lets be honest here guys these type of people are the majority of the world and if we don't find a way for them to make crypto useful then its no point. Let me explain more....if I give my wife or a non-tech person a cold wallet which has bitcoins, do you think they will be able to get the money out of it? The answer is HELL NO, I'm sure if today i give my wife one of my priv key she will not even fathom how to get out the coins, she probably will lose them. Thats the main issue

Lets give these people a name, "The majory of the public (TMOP), so if these TMOP guys not come into our space with the ease of use, then it's our loss. How do we get them in? to use some systems that are a little bit like banks, I know the main idea of bitcoin is to move out of the medium/middle man but its very difficult, we have to have middle man (CEX), to make it easier to use and safer for the TMOP.

You may ask, how is CEX SAFER for TMOP, its the opposite right? No for them IT IS safer to be in CEX than their own priv key trust me.

For them they could be easily hacked using a wallet, they could have all sort of stuff in their computers, they could connect to a bananacakeswap thinking its panecakeswap and click "Connect" how would they know? they wouldnt, again I know you would know, but you have to get out of your own body and get into their body to see from their perspective. these fellas can easily click transfer and lose all of their coins thinking they are getting airdropped something from a telegram message.

Listen, when these people go to a good exchange with good safety record & with having 3 different safeties such as "password + 2FA + email confirmation", then they dont need to connect to any other website ever. Plus they could just stay and see what the exchange offers, then p2p get their money out of it at any time. Also they can install anti-fishing seed inside of the excahnge, so now they have 4 safeties & never have to check any website/connect anywhere, just stay in the exchange until they cash out.....thats what we need.

I am sorry for the long post but as you can see I disagree with 90% of you guys for the above reasons. I just want cryptocurrency to get bigger and this is the only way. Otherwise it will be "Crypto-scammurecy" instead of "Cryptocurrency" which it already is a big scam space if you think about it, and where do most the scams happen? In telegram with metamask approving/connecting thir wallet to places thinking its another place type of people. Its painful to see.

It's very true, Bitcoin (like all cryptos in general) suffers from excessive mystification, even though it's fundamentally not complex to use. As the few feedbacks from the adoption of BTC and LN in El Salvador clearly show, a simple wallet, with an effective UI, seems essential if we want users to head away from a CEX.

I think there are more factors involved, and there are (almost) as many reasons for CEX users to store their BTC on a CEX wallet as there are CEXes users.

For example, large CEXs are translated into many different languages. For non-English speakers, this is a real advantage; most of the documentation, videos, and explanations found through quick (I mean non-deep) researches are in English in general, and I think CEX may also seem simpler to them from that point of view. That's why I like so much the Local boards concept on Bitcointalk for example, we need to have good documentation in as many languages as possible.

There's also the fake sentiment of protection that CEX offers, a bit like 3.0 assistance. As you wrote, many people are aware of the risks associated with self storage (such as loss of private keys, unsafe backup, etc.), but they think little of the risk of having their personal data stolen in the event of a CEX hack, and so use the service without being fully aware of the risks involved.

I'm like you, I only use P2P whenever possible, I avoid KYC and centralized platforms. However, wondering why people prefer Binance to Bisq or Peachbitcoin is like wondering why they use Google rather than Duckduckgo, why they use Gmail without PGP rather than privacy-focused services etc.... Answer ? Probably convenience, laziness, lack of knowledge, fear of learning things unknown at the moment...

Plus those who are in it for the fast money only and aren't interested in the essence of Bitcoin will always be CEX users.


It's better to take things slowly, leading to a solid foundation and knowledge, than to be hasty and immature, especially when it comes to crypto and money 

Yeah I totally agree that most of new people in Bitcoin don't want to setup their own wallet is because they don't want the extra step, however I think there another reason like the person is not yet fully committed to Bitcoin so they left the Bitcoin on their CEX wallet, so incase they saw the Bitcoin price dropping they can easily and quickly sell and cashout their Bitcoin again.

Because they always believe that CEX are like banks, your coins or funds are safe with them. But for real traders, it’s a different thing. It’s only good to use CEX only when you decide to trade, but it will never be good and suitable enough to leave btc in exchanges for long term safekeeping. That is completely risking your bitcoin, because the moment you put it in an exchange, that is not your coin anymore, that is already owned by CEX, which means losing your full control on your own bitcoin.

It's certain, I had missed the NEO update and they no longer appeared in the wallet. Luckily a very kind and knowledgeable bitcointalker solved the problem for me.

Ofcuse it's obvious that the reason why most crypto newbies leave their coin on CEX is because they have no good orientation about security in the crypto space, if they really do have the idea that with their coin on CEX, it's not really in their full custody, then they will always want to keep those coins off centralised exchanges as long as they don't have any urgent need for the coin. I did make the same mistake in the past, but I really got a good education from my friend, which is why I should not store my coin on CEX.

OP, sometimes people also don't really check up on Blockchain updates or read crypto-related content; otherwise, they would be more educated in the security aspect of crypto. One must not wait for spoon-fed information first, because sometimes before that information can reach them, they might have fallen victim to a scam.

Yeah same as me back couple year a go think that Centralized Exchange has the same environment as the bank but the truth is not. Tho even bank with high security is still can be hacked in some way but stealing money seems impossible to do in bank and if we can steal money from bank we might see dozen ton of police and government agency that will start investigating.

that is the difference CEX in other hand can be hacked and can lost of user money and sometimes it can be tracked and since cex at some point is not regulated any government will not take seriously.

and yes Personally,  i just bought a hardware wallet couple of years ago and its safe pal some users here don't recommend it because its a closed source and so on. so maybe im looking another alternative after this.

That could be the very best reason mate why they start trusting CEX despite of its risk. What’s more important for them is just to buy and sell bitcoin and make some profits, not realizing that they could lose all their coins in an instant when this CEX becomes insolvent and is force to stop its operation. Not all have seen this coming, but this is highly possible to happen since CEX can never be reliable forever.

It may be stupid to think like that, but it's true. We have been so infantilized for so long that we no longer know how to do anything on our own. One day we gain confidence and our whole life changes.



I didn't say I was using Ledger, I said it took me at least 3 years to plug it in. It was a gift. I have a bitbox and I find the interface simple and practical.

To my mind, people prefer CEX because it's easy to use, has multiple trading and investment option, is easy to recover, has desktop and mobile app, etc.
By the way, you should have learnt in 3 years that Ledger is the worst wallet because of how dishonest they are but probably since you are from France and Ledger is headquartered in Paris, you decided to trust it more than other wallets. To be honest, we don't have much choice with hardware wallets that support altcoins but we have good choice if you are looking for Bitcoin-only wallet, I recommend you to check Coldcard and for easier interface but the same security - Passport Foundation.

I agree with you that not all goals are the same. Especially in the case of Bitcoin because there are many coins where investing can have huge profit potential. But the reason why people invest in Bitcoin is because it is decentralized. Most people use cryptocurrency because it allows them to work anonymously, but platforms that are centralized do not offer such benefits. Also we are well aware of centralized coins where there is scope for scams but it is completely different with Bitcoin. Bitcoin is the best because of reliability, security and privacy.

It is stupid for one to think that way, what assurance do they have that the exchange is going to keep the assets safer than they can, if they took a few minutes out of their time to research, they'll find out that many exchanges have been hacked and assets were stolen, if exchanges were the safer option, how come many of them get hacked every now and then or they just play around with depositors funds for more profit and lose it.

There's nothing complex about using non-custodial wallets, and people who think it is complex should prolly not use Bitcoin until they understand that it is what makes them their own bank, if exchanges have your keys, they are your bank.

No doubt I expressed myself badly. I was not talking specifically about wallet, but about education in the broad sense. Everything about the bitcoin environment and how to protect yourself on the internet, as "Mi Primer Bitcoin" offers. https://miprimerbitcoin.io/


Education is that: to learn and to put into practice. If you learn music theory without having a musical instrument, what's the point?

As far as cybersecurity is concerned, people should already be awareness: people do not even realize that posting photos of their children, not securing emails, not using a virtual credit card etc etc is already potentially dangerous. Before even learning, they have to understand why they have to learn and what it is for. Confidentiality or protection of personal data are abstract data. Not to mention financial education. Most people have never heard of CBDC.

There is therefore still a very long way to go before people (and companies) can venture onto the Internet without too much danger. CEX probably seem safer to them, even if ultimately using a non-custodial wallet is not so complicated.

I too still have a lot to learn.

There are many reasons as to why beginners store their Bitcoin in centralized exchanges but these are my own personal views and might differ from what other persons think.

• Ignorance: Most people are not enlightened enough to know that if it's not your keys, then it's not your coins and they trust CEX with their Bitcoin.
• Complexity: Because of the sensitive nature of seed phrase and storage keeping, some persons are afraid of losing their asset if they mistakenly lost their devices as well as seed phrase. They feel if the have their Bitcoin in exchanges and they forget their password, they can always reset their password and have access to their funds.
• Mempool high transaction fees: This might come as a surprise but it's actually true. During the mempool issue that resulted to Bitcoin high transaction fees cost, a friend of mine after buying Bitcoin from CEX prefers keeping it there until the fee comes down.

For me, I think the main reason why most non-trader beginners still having their BTC on CEX is as a result of ignorance & secondly, it's ability for users to invest their idle BTC and get paid a commission every day, week or month depending on the duration & investment plan which Noncustodial wallets don't have, and an added advantage to CEX just like Binance which offers a 0.43% Annual investment rate for BTC.

Fine and good it may be more task demanding making use of a cold storage or a decentralized means of storage of our crypto assets, we have to also have a look at the risk involved with using a centralized exchange, the value of our financial asset should be the major reason why we will always wanted to make use of a decentralized and more secured wallet for our bitcoin, but if only on the fact that we think the little we have on exchanges will not hurt us whenever any occurrence of loss in asset should happen, it's what we can afford to loose, most people make use of CEX by having just little amount they can afford to loose there while their main holdings are on cold storage.

No one says trust DEX, we say do not trust any platform with your keys no matter how reputable. Decentralized exchanges is the umbrella phrase but it is referring to a P2P platform where the exchange at no point in the transaction holds the coins. You are trading directly with the seller and do not need to trust either the exchange or the other trader, you just have to verify the protocol being used.

Not every DEX is recommended. Check at https://kycnot.me/ for a list of different ones and the pros and cons of using any. What you should be looking out for is which offers non custodial wallets and is open source, then the privacy feature and other services.

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About refund process, while it is unknown for many decentralized exchanges, you should bank on it on centralized exchanges either. MT-Gox scam happened years ago and I cannot point out anyone who has admitted they have received a refund.

- Jay -

I think that one of the most important reasons is that at any time they want to have the opportunity to sell, and sometimes at times when the price rises 10% or more it is not possible to react quickly and make a profit - and that is all that matters for most. In addition, the great leader CZ concluded in his great and wise statement that 99% of all users will sooner or later lose their coins if they keep them in a non-custodial wallet - and when the leader speaks, the subjects listen and obey the commands.

When you have a "friend" like that, you don't really need enemies.

Those that I know and very close to me that leave their assets on exchanges are all crypto traders, they have no choice as a daily trader, the stress and extra payment of withdrawing and depositing time to time is what they don't like.

They only move out their profits from exchanges but not the initial trading capital, it always stays on exchanges, and I don't see anything wrong here unless the amount is very big, so far they keep moving their profits out, even if the exchange closed some day, the profits they have made will cover up.

If you are not a daily trader and you leave your asset on exchanges you are the definition of stupid ass fellow and you need to be thought some lesson so that you can start thinking straight, non-custodial wallets exists so that no one can control your funds.

If you don't want to use it, something else will teach you how to use it, keep holding your assets on exchanges.

Sometimes decentralized wallets indeed suffer from hacks but such events are rare compared to centralized platforms. That is why we have to choose open-source wallets so that such attacks can be easily identified and action will be taken. Decentralized platforms will be my option because it gives me the opportunity of having full control of my funds. The responsibility of keeping my wallet safe is less risky than committing my investment to someone else.

The government would have been the best body to champion the introduction and teaching of cybersecurity and privacy courses in the crypto space. But because the government sees the sector as a competitor, they preface to force citizens out of the sector instead of educating the people. They prefer to refer to Bitcoin and others as a risky sector that should be avoided. They are doing everything possible to scare people out of the space.

The efforts of some Bitcoin advocates are not enough and sometimes this vital security information is censored by the government. This means we have the responsibility to do our research and learn how to protect our investment. It might be difficult because of so many other responsibilities craving our time and attention, but we still have to create time to learn.

That's because proper dex work exactly the way Bitcoin does, if you lose your Bitcoin seed phrase or private keys and your funds gets stolen, you cannot get them back, that's part of the responsibilities of being your own bank, making sure you have adequate security so that your assets won't be stolen or lost.
Atomic wallet is not a custodial wallet, Atomic wallet is a non-custodial wallet and their users have their seed phrases and their keys. I know nothing about this story of a person recovering their money in Atomic wallet hack, but don't believe any person/investigator who says they can recover your stolen funds (it is a scam).
Dex have mediation and arbitration team, but cases rarely get to them because it is easy for trading partners to trade peer to peer without running into any problem that requires settling.

Many of us on the forum learned everything ourselves, and worrying about safety is everyone's responsibility. There is a lot of information regarding security, there are even video instructions regarding hardware wallets, and many explanations why this is important.

Anyone who at least once was interested in the issue of security, could understand this thoroughly, the most important thing is to have the desire to do it. Beginners can store their coins on the exchange because it seems convenient to them, besides, at first it is usually small amounts and therefore it seems that there is nothing wrong with it, and they postpone the security issue for later.

Education is not enough. They will more easily forget their lessons if they don't experience in the market, see more bad reports on how people lost their bitcoins by scam centralized exchanges.

Like safety rules, they can be taught at school but not all of them will have safe practices. Education is a most important thing we can do and we must start with education. They must start with educational course on bitcoin wallets, what to use, what to not use and spend time for practice.

I agree with all of your points well at least i have left no other option because you are correct. But all i am saying is, On CEX we still got a chance but on DEXs if things went wrong then we do not have any hope or anything to hold on. Because what's gone is gone.

And i do know that the complexity of recovering money is too hard for one. As, recent Centralized (custodial wallet) Atomic wallet hack has effected many users and i was reading on twitter that one person was able to recover his 1 million dollars with the help of some investigator (who is one of the best on twitter).

Overall, one of my friend once faced an issue in future trading, in which his trade was liquidated even before the liquidation price so he just contact the team on support and his assets were given him back. Can we do that on DEXs. AFAIK no, we can not do that because there is no team to handle your assets. Only you are the one to handle you assets.

Well, if i look from different angle then in the first hand the mistake in my friend's case was of that Centralized Exchange which might not happen if he is on DEXs. ( maybe i am taking it wrong).

People who leave their bitcoin in exchanges are not aware of the risk that is involved for doing so,some people that has the awareness feels that because it hasn't happened to them by losing everything that they have in an exchange when it crashes and feel ignorant of the consequences of their action.

 Laziness can also contribute to newbies leaving their funds in an exchange because they feel that it is stressful and prefer to buy their coins and leave it there believing that it is safe. The only reason why I think that anyone can leave his coins in an exchange is if the person is a trader but if you are not a trader then it means that you are gambling with your investment by leaving it in an exchange

Bitcoin has been here for a while and majorly most of the people who has education are getting used to the keypairs and stuffs like that if they are willing to store bitcoin for longer term. Newbies or people who are interested in get rich quick schemes are willing to take profits by investing in shitcoins and move onto other shiny coins in the next run. This is probably the reason, they own their shitcoins on centralized exchanges instead of owning them on non-custodial wallets. Libertarians are interested in Bitcoin as it is free from government interventions and thereby they can have the liberty of owning a currency which is not being controlled by countries or states.

TBH we don't really need to have a dedicated education to start using hardware wallets or non-custodial wallets as majority of these apps and devices have been made easy and it is increasingly becoming common that even the enthusiasts with very less knowledge on computers have started using bitcoin by storing them in hardware wallets such as trezors. Historically speaking, wallets such as Ledger have been really helpful in onboarding new-comers but with the recent database hacks and their poor choice of breaking the privacy by uploading keys to centralized servers had put a distrust on them.

If you are involved in a technology which is quite new and has the ability to change the world, you need to update yourself regularly and keep learning at a faster pace than the current generational speed. New technology provides us with the opportunity for creating an impact on this planet and similarly they can also be quite dangerous if learnt the opposite way. During each and every cycle of the market, new technology in the cryptocurrency sector popped up (starting from Altcoins, Defi & NFTs) and each paved way to new business models and new industries over the decade.

I don't know if you have checked what you just wrote properly, but I think it's wrong, but I would like you to convince me, how can saving you money on centralized exchange help one to make money.

Do not get me wrong everyone is always trying to make money that why some people buy Bitcoin in the first place so how can someone who is saving on a centralized exchange make more money than those saving in their private wallet or decentralized exchange.
The price of Bitcoin is volatile, if it rises it rises everywhere.

PS. It's very risky saving your funds on exchanges.

From what I've seen the newbies who leave their bitcoins on exchanges aren't "buying bitcoin", they are buying an abstract idea to make a quick profit. They have no idea what bitcoin is, they don't care either. This is also why they end up buying a lot of shitcoins too, they hope to make profit and shitcoins advertise quick profitability (ie pumps and dumps). That means they want money, so they basically deposit their money (ie. fiat) into a website (ie. CEX) and then try to make a profit on that money.
Note that they don't necessarily have to trade to be like what I explained. They are making an investment, like buying stocks through a stock broker. They don't "withdraw their stock" nor do they trade it, they buy and hold it with them hoping for profit.

This is why I don't think this is about "digital education".
Compare that with someone who has informed themselves of what bitcoin truly is and is buying it because they liked this decentralized currency not because they wanted to make profit. Those people regardless of their understanding of computers and stuff like that will go through the process of educating themselves and use a real bitcoin wallet to store their coins.

Such a long path of your development can be explained by the fact that you were engaged in self-education. Therefore, every time you learned something new, even more unknown things appeared in front of you. Of course, it would be easier to use proven tips, but we can definitely say that the experience you have gained will be more useful to you in the future, since you have thoroughly figured it out on your own.

Yes, a lot of newbies are almost taught by other newbies who pretend to know a lot about cryptocurrencies but actually know very little. I wonder how such people can properly mentor other newbies, especially when they don't understand the differences between centralized and decentralized exchanges and are too lazy to conduct their own further research to learn more about the investments they have made.

People now simply enter the bitcoin business eager to learn about  how to solely invest and make money, and easily forget about their security and privacy are more important.Seriously, if we do our research, we will find that a lot of individuals are abandoning their coins on exchanges. This is because people are first introduced to exchanges when they enter the cryptocurrency sector,people hardly introduced them to decentralized system.

You are definitely not assured of getting any of your assets back if you lose them in an exchange hack/breach, many a times nobody gets anything, or the legal process to determine how to return some of the funds to the creditors takes forever and in the end might not yield anything, even if people get something back, it might be nothing close to what they lost, etc, so don't count on this as a consolation and basically use a non-custodial wallet to store your assets.
In a proper dex you do not deposit funds into the exchange like you do in cex, you trade directly with the other trading partner so you control your assets, that is why there is no single point of failure when you use good dex. Nevertheless, your assets should only be in your non-custodial wallet.

Mostly, even the people who introduce newbies to Cryptocurrency have less knowledge about the difference between centralized and decentralized exchanges. That is why they find it easy to introduce them to Centralized exchanges where they can easily buy, trade, and sell their coins. The only risk they probably tell them is that the market does go bearish and bullish sometimes; therefore, they will teach them how to monitor the market, buy when the price is down, and sell when the price is high. They don’t care about the personal information they submitted to the exchanges during KYC.


They may still find it difficult to use due to their laziness; they mostly want quick money, which means they have no time to learn. As a  result of that, they risk their privacy in the exchanges for some shitcoins that may end up going unnoticed.
Personally, I didn’t also know the difference between centralized and decentralized exchanges until I came to this forum. All I knew before was to buy my coins in the exchange, leave them there, and sell them when the price became high, then take my profits, not knowing that my privacy was at risk with a third party and that my coins were not in my control.

As others have already said, beginners need good knowledge and proper orientation on how risky it is to depend on centralized exchanges in order to put an end to such things.

Totally agreed, i also do not advice anyone to trust CEXs but neither DEXs too. Let me ask you a question that, Did you know the victims of FTX and MT Gox exchange are receiving their funds back? Because they are receiving their funds back but in batches. The point is when you are on CEXs you still got a chance to make some arrangements and still have hopes that you might get your assets back.

But did you heard any news in which DEXs have returned the assets of those who was victimized in any hacks or bankruptcies like FTX and MT-GOX. In my knowledge i didn't come to know about such news. IF you also have no answer then how can you say not to trust CEXs but DEXs (i know you didn't said to trust DEXs but there is only CEXS or DEXS so if you do not rust one then you definitely is suggesting other)

I doubt some people will actually learn to take off their coins from exchanges. We can all blame all this on naivety or ignorance but the act of carelessness is also part of it, if the someone who actually values his coins and funds and the security of it then they would go extra miles just to safeguard them. But most of them do not just want to take responsibility of having to safeguard the keys and seeds themselves when dealing with self custodian wallets.

Also the higher number of people that still have their funds on CEX are mostly traders because to be sincere only those exchanges have the features that many of this day traders need to trade. And still even some of the experience traders who are actually after securing their funds just leave some certain amount there.


Let’s be honest there is nothing like a trusted Centralized exchanges, there are many of these past exchanges that had better reputation than both the binance and coin base and they ended up biting the dust with peoples funds going down with them. Aside the privacy concerns of the centralized exchanges, the losing of ones funds is the biggest threat.

This exchanges that you mentioned that usually alert their customers to withdraw their funds are able to do it just because they were actually closing down. Do you think they would be able to do the same when it is hack or compromised in some way? Or do you believe they will return customers funds if been hacked?, I would say go and read about Mt. Gotx saga and you will find out that none of them can be trusted

Totally agreed with you. because i consider my self still a newbie as i have not test most of the crypto features and technologies yet like one of the big is Hardware wallets. Reasons are i had not any resources to buy them. I live in Pakistan and there was no Amazon here back then but now it is. The point is, most of the user prefer to stay on CEXs because they have no resources to get Hardware wallets. Or there Amount is not that big, that they wanted a higher level of security with HW. Because the security level we want is already provided by CEXs.

And newbies do not only use any CEX they do proper research to select one which could stay longer like coin base and Binance etc. Such exchanges no doubt a facing critical cases from different governments. But in my short period of time these exchanges do care about their Customers and whenever they have to leave some territory they ask they users to withdraw their assets by giving them a dead line. \

You said, it considered stupid in France i say not, country doesn't matter maybe the level of considering such question more stupid there which is obviously is not a good thing but overall, in the world most people who like spoon feeding are discouraged and disrespected too. Because they do not wanted to learn anything on there own they just ask question on any thing they want and do not hesitate to use their own minds. This what makes other angry. So, yeah that's happen all the time and everywhere.

People is only looking an easy way to buy Bitcoin, that's why they ended in centralized exchange. I've seen Binance ads in everywhere when it's related with cryptocurrency, what make it's bad because they wrote Binance is a safe place to hold your coins. Most of people wouldn't think about the long term effect, as long as the site is right now looks safe, it's good to go for them.

Where did you read if El Salvadorian schools teach about non custodial wallet? AFAIK they have their own wallet e.g. Chivo, it's a custodial wallet where you need to submit your KYC, but the good thing they didn't force all their citizens to use this wallet.

It's not just a lack of information, it's also a lack of education. The Internet and all its risks have been introduced without prior training, without any courses on cybersecurity, on personal data and why it must be protected.
Many people are not ready to manage this security on their own and therefore not at all ready to manage a non-custodial wallet. We need lessons at school like in El Salvador. I learned everything on my own, even computers. It's not easy and it takes time. You have to do it in addition to your job, your family, all the other activities.

They do this because they were introduced and guided to create accounts to buy bitcoin on centralized exchanges. They were not taught about risk of leaving coins on centralized exchanges and they think they can safely store their bitcoins in their accounts.

Reminder: do not keep your money in online accounts

If they were taught about risk, like above reminder, they will use non custodial wallets.

The most simple thing why many people prefer to leave their Bitcoin in CEX is, they buy Bitcoin in order to earn money.

It's inevitable all people like to earn more money, but their main reason they buy Bitcoin isn't to earn money, but they buy due to decentralization, verifiable, security, and privacy. There's no way to hide your wealth if you still depend on centralization e.g. government, bank etc. There's no way to achieve freedom and not getting controlled if you still depend on centralization.

People who work in IT probably do not realize how difficult the crypto environment can be to understand and for some even become downright anxiety-inducing. Indeed, digital education has not, in my opinion, been properly done in many countries, especially in France.

This is how most people in their forties/fifties and over are completely lost in the digital world (especially in France). Companies do not protect their data and are easy prey for all hackers and individuals alike. So of course individuals know how to do bullshit on social networks, but there are many problems that persist and are here to stay for a long time.

Cybersecurity is an area that has really been left behind. Insufficient passwords, risky clicks on anything and so on.

In this environment where everyone learns what they can, no matter how and often quite badly, we can imagine that bitcoin is part of another world. When, however, a person wishes to hold bitcoin despite everything, the sum of the accumulated shortcomings is such that she/he becomes the ideal victim for all hackers.

If this person is not disgusted after a bitcoin hack or crash, he/she must face:

- New words that correspond to unfamiliar concepts.
- Tons of cybersecurity tips (mail protection, 2FA etc...)
- An anxiety-provoking environment that talks about hackers all over the place.
- Tools such as hardware wallets which seem complicated when some people already have trouble using a computer.

So in this context, it's no surprise that beginners prefer to leave their bitcoins on CEX, because they have less to learn in one go, just managing a password and 2FA, (and don't always use that). The stress engendered by bankruptcies such as those of FTX or the oft-repeated phrase "Not your BTC, not your coins" can indeed discourage more than one.

Moreover, in 'developed' societies of permanent recipients where people are no longer really self-taught (perhaps lack of time, intellectual laziness, lack of self-confidence, etc.), the idea of ​​being oneself accountable for their funds, with no customer service and no one to complain to is hardly/no longer an option.

It takes time to read and to learn, every day I learn something and when I look back over the years I have the impression of having naively walked on a minefield.

I take this opportunity to thank the people who really know much much more than me for never having been condescending by my sometimes simple (or simplistic?) questions, whereas IRL in France in particular asking a question is sometimes considered as a sign of stupidity (which is quite the opposite I think. I'm not ashamed to say I don't know or I don't understand).

That's why newbies prefer CEX in my opinion because they feel safer and at least in a more familiar environment like their banking app (!).

Personally, I must have taken at least 3 years to connect a Ledger, being discouraged in advance and because I didn't really have time to understand how it worked. (In the end it was much simpler than I had thought.)

The more I learn, the more questions I have and I tell myself that I would never have gone around the question. Fortunately, my children are older and I therefore have a little more time to learn, but the path still seems very, very long. I have lots of notebooks to put notes on to look at later, but I have so many notes...

I dropped CEX after trying lots of them mostly to see what they looked like, I never traded because it's a job and I'm not interested in it, I had shitcoins which no longer exist (but for which I had only invested a few euros), I don't understand anything about DEFI and NFT for me, it's a bit like fashion week, not very interesting either.

I ended up changing shitcoins into btc and putting that on a hardware wallet (but not the ledger whose interface I don't like). Finally I applied the maxim "not your keys, not your coins"). Maybe that's the beginner's path after all? Going slowly towards this goal, without being too greedy or too naive and doing things at your own pace (I'm particularly slow I think...)