Danger of keeping your crypto on an exchange

Hanno Labuschagne

Hanno Labuschagne

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Danger of keeping your crypto on an exchange

Every four years, Bitcoin and other cryptocurrencies go through a mania period that draws in millions of people around the world hoping to earn big returns on surging token prices.

Like clockwork, a significant number of these new investors, traders, and speculators learn the hard way what Bitcoin enthusiasts mean with the mantra, "Not your keys, not your coins."
 
You gotta be an absolute idiot for keeping your crypto on the exchange for a long time. Mine is stored safely on my Nano X Ledger in my safe at home and my 20 word key phrase is written down on paper in my garage far away from the house.
 
UB40 said:
You gotta be an absolute idiot for keeping your crypto on the exchange for a long time. Mine is stored safely on my Nano X Ledger in my safe at home and my 20 word key phrase is written down on paper in my garage far away from the house.
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What happens if you get robbed and they set the garage on fire?
 
I’m of the entirely opposite opinion.

The risk of me losing my keys or hard wallet is far higher than that of the Exhange losing it.

So I simply leave it there.

Same reason you don’t keep gold bricks in your house.
 
SauRoNZA said:
I’m of the entirely opposite opinion.

The risk of me losing my keys or hard wallet is far higher than that of the Exhange losing it.

So I simply leave it there.

Same reason you don’t keep gold bricks in your house.
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I think it is very risky on the exchange
www.bbc.com

Over a million are owed money by failed crypto exchange

Experts and watchdogs warn UK investors that when crypto firms fail, getting money back is unlikely.
www.bbc.com www.bbc.com
 
I mean if anything what people should read from this article is how Luno protected their customers from the Genesis fallout.
 
UB40 said:
I think it is very risky on the exchange
www.bbc.com

Over a million are owed money by failed crypto exchange

Experts and watchdogs warn UK investors that when crypto firms fail, getting money back is unlikely.
www.bbc.com www.bbc.com
Click to expand...

But that's a case of "too good to be true" company failing, not someone just doing the basics of holding your crypto.

It's the usual case of due diligence and going with an Exchange that ticks the boxes and does the work and isn't just a fly by night shop with no credentials.
 
I know far more sad stories of people losing their own crypto through their own failures than I know of those actually losing real money on exchanges...and when those have happened you could see it coming a mile away.
 
SauRoNZA said:
I know far more sad stories of people losing their own crypto through their own failures than I know of those actually losing real money on exchanges...and when those have happened you could see it coming a mile away.
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Remember that dude who threw out an old HDD with like 200 BTC on it?
 
SauRoNZA said:
I’m of the entirely opposite opinion.

The risk of me losing my keys or hard wallet is far higher than that of the Exhange losing it.

So I simply leave it there.

Same reason you don’t keep gold bricks in your house.
Click to expand...
Basically why crypto will never replace banks. They might be naaiers with their fees & service, but at least my money is insured and covered in the event of most things.
 
saor said:
Basically why crypto will never replace banks. They might be naaiers with their fees & service, but at least my money is insured and covered in the event of most things.
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Never say never.

I fully expect we are going to see that from crypto exchanges in the very near future now that all the big investment companies are getting on board.

Technically you already have this with crypto ETF's.
 
SauRoNZA said:
Never say never.

I fully expect we are going to see that from crypto exchanges in the very near future now that all the big investment companies are getting on board.

Technically you already have this with crypto ETF's.
Click to expand...

None of the big players own Bitcoin.

Therefore the powers that be are not going to use something they don't control. Bitcoin is a dream and a whisper that will crash when governments release their own digital currencies.
 
OutlawJoseyWales said:
None of the big players own Bitcoin.

Therefore the powers that be are not going to use something they don't control. Bitcoin is a dream and a whisper that will crash when governments release their own digital currencies.
Click to expand...

Blackrock enters the chat…

Easily the biggest fish in the pond. And the other fish are following swiftly…why do you think the price is where it suddenly is? It’s all because of retail investment.
 
SauRoNZA said:
Blackrock enters the chat…

Easily the biggest fish in the pond. And the other fish are following swiftly…why do you think the price is where it suddenly is? It’s all because of retail investment.
Click to expand...

I'm talking about the central banks, the controllers. They are not invested in Bitcoin and will not use and ok anything they do not control. They will create their own digital money. All governments have too do is outlaw Bitcoin and it will die pretty quick as users will adopt their digital money creations.
 
UB40 said:
You gotta be an absolute idiot for keeping your crypto on the exchange for a long time. Mine is stored safely on my Nano X Ledger in my safe at home and my 20 word key phrase is written down on paper in my garage far away from the house.
Click to expand...

slight correction, you seem to be making the same semantic error as the article:
This means transferring tokens into a self-hosted or hardware wallet
Click to expand...

the tokens are never transferred to the hardware wallet, the hardware wallet secures the keys to the on-chain address, that on-chain address "contains" the tokens

for that matter it is also never "self-hosted" given that it lives on the blockchain, should have read "self-custodied"

it's not all that important a distinction, but once people start to use hardware wallets it is usually an assumption that gets dispelled for them

good practice of course to:
- have a key phrase for recovery
- have it physically separated from the hardware wallet

only thing it the recovery phrase can be used by anyone if they get their hands on it, at least the hardware wallet still asks for a PIN code or some such ... i.e. it is safer for the hardware wallet to be stolen than the recovery phrase
 
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