Bitcoin Forum

Some people stored their funds on a crypto exchange, which is not a good thing to do like a good bitcoin. Some people believe that their cryptocurrency is much safer in exchange than their crypto wallet, this concept is a big no for me, well, in fact, I always read some articles about a hacked exchange every week or months. It is much safer to store our money in our crypto wallet but the problem with it is that it is also vulnerable to being stolen by hackers.

We can prevent this thing from storing our private and public keys.
Just key terms to remember:
Transferring of funds
Public key - allows you to transfer funds into it
Private key - allows you to transfer funds out to it.

Exclusively
Public key - publicly known and important for identification
Private key - this should be secret, excluded only for two parties which are the receiver and the sender.

If you lose your public key, you can still access it using your private key and if you lose your private key you cannot access your fund anymore. Storing your private key is a really important thing to do whenever you want to secure your wallet. Do not store it on your device because any device ate prone to hackers. Use any strategies except online.

You got a point OP! Thanks for this.
But to be honest, I also hold some of Bitcoins in the exchange but not too much, some of them are just for trading.
And some of them are funds that I may use in an emergency, so I don't need to access my hardware wallet, since not all the time I bring my hardware wallet. So, some exchanges or centralized wallets are here to help.

Another example incident that just happened recently.

https://blockchain.news/news/okex-founder-star-xu-arrested-after-crypto-exchange-suspends-withdrawals
https://www.coindesk.com/okex-founder-star-xu-named-as-key-holder-in-police-custody-report

For sure those people who had stored some coins on OKEX had a sweating balls at the moment.
Its never been good to make exchange wallet as your primary or storage ones.

For so many times, a lot of threads and posts I've read that's been reminding especially the newbies that they don't have to store or use the exchanges as their cold wallet for holding. There is a misconception of the use of exchange and if they have decided to use it as a place to store for a very long time, it's not the best venue for their holdings. Many hacks have been made on exchanges and funds were stolen, if exchanges doesn't have the capability to refund the victims, goodbye to those funds that are present on that exchange during the hack and are stolen.

Thanks for giving me good advice. But a trader, especially a daily trader, they will keep their assets in the exchange wallet for trading and the profits will be sent to the personal wallet. Very inconvenient if every day you have to make deposits and withdrawals. After all, losing crypto assets is a risk that must be borne by the holder, because hackers always have a way to commit crimes.

I personally never store my HODL coins in an exchange wallet...
but as a trader I always prepare coins on an exchange wallet, it is very complicated if I send my tokens back and forth to my personal wallet and then to the exchange wallet again. There is no certainty that an exchange that we believe can be safe from hacker attacks but a trusted exchange usually guarantees the customer's token / coin.

It's so evident. I'm wondering why some people still use exchanges for long term storage.

I keep some exchanges for portability,so I can access my exchange anywhere with just my password and authentication code. I dont like carrying private keys around either on hardcopy materials or phone, it should be kept in a position. Though the wallets have been doing great but remember some wallets were good some years ago e.g blockchain.com. Any online wallet can be compromised especially the cheap ones without private keys

It seems to me that storing crypto on wallets is quite safe. I used - Trust, Atomic, Ownr, Jaxx. And no one hacked my accounts, no one stole my funds.

I guess it's common knowledge that storing cryptos on an exchange is not a good idea. The money can be stolen, and since the exchange controls your money there, it's not really yours. I think I have some altcoins on exchanges because it was much easier in 2017 for me to keep them on an exchange rather than create wallets for every coin, but I'm talking about very small amounts of money. That being said, sometimes I can understand why someone would keep money on a reputable exchange. It's easier if a person uses it for trading, but if the exchange tends to fully compensate the losses in case of a hack, it can also seem to be a reassurance. I choose a wallet, however, not an exchange.

I think there is a small correction of your thread title. It should be like this, "Do not store your Crypto/Bitcoin on the exchange, store it on your crypto wallet".

If you are a trader, there's nothing you can do is to trust that exchange you have to choose and risk fund that you can afford. That's why we should pick a reputable exchange where we can trust upon leaving our fund, but it doesn't mean we trust them by leaving our fund for a long period of time. If you have done in trading, don't let your fund sleep on the exchange over a year, it should be transferred immediately on the wallet that you hold over the private key.

Choosing a hardware wallet that fully open source is the best choice or much better if you know how to make a paper wallet that is the best cold wallet for a long purpose of holding. This just saying it over and over again here in the forum, "not your keys, not your fund". Anyway, thank you for reminding us this way.

Thanks for reminding us mate, this topic should always serve as a reminder to us that it's never safe to leave our crypto on exchanges, and it will be more helpful for the noobs in  crypto,cus alot of them normally make this mistake, and when the exchange where there their funds are kept eventually gets hacked they will start crying, storing our crypto should always be our top priority and since exchange security have proven to be weak and very easy to exploit, it's best we store them in our wallet, storing crypto in exchanges became a bad idea, since some group of people decided not to work for money, but rather they prefer to exploit security weak points in exchanges then hack into  them and steal the funds on the exchange,so its better for our crypto to remain in our wallet than in an exchange wallet.

Exchanges are not very safe because you don’t have the private key of the wallet in which you store your coins. In the past, there were a lot of exchanges that have many coins stolen. The best-known example of this is MT.gox. All the money of those who had money on Mt.gox was gone.

I feel like these warnings are becoming something like "don't cross the road when it's a red light ", everyone is giving the advice but at least once or twice a year when there is no car in sight everyone does it.

With the avalanche of newbies, people that associate exchanges with banks, with less educated investors the exact opposite is happening:
Five mega exchanges hold 10% of Bitcoin's entire supply (https://cointelegraph.com/news/five-mega-exchanges-hold-10-of-bitcoin-s-entire-supply)

Nope, people are just too lazy or afraid of being responsible alone for their coins so they would rather trust an exchange than their own laptop or knowledge.
I don't like what's happening but I also don't believe in miracles, the percentage of people doing exactly the opposite will only grow in the near future.

I have a feeling at least 1/4 of the ones saying it's not right to keep coins in exchanges have some right now as they type stored on binance or another one.

I think it's both of insecurity and greed.
People don't have trust on themselves and their devices/browsing habit and don't prefer/afford a hardware wallet. They'd find it easier to store in exchange.
People want to earn from their idle money. Exchanges provides both savings and trade profit for traders, which on sufficient amount could be a good income.
Though I have a good portion of my coins in my wallet, that hasn't increased in quite a time as I have discovered it's much profitable to trade than keep my coins idle.

I was reading a moment ago about the OKEx Exchange’s decision to temporarily freeze withdrawals today, and moving from one reference to another I came across the OKEx’s announcement on the situation. Within the wording, they reference part of their TOS, which look ever so spooky when drafted  on a short two paragraph explanation of the situation:
See https://www.okex.com/support/hc/en-us/articles/360051090391

While one may normally interpret the above on an individual scale, it can also be applied to the whole range of accounts simultaneously (as has happened today).

There are situations where one certainly may need to have some crypto on an Exchange (preferably small sums, constituting each person’s bare minimum – ideally cero), especially for frequent traders, but the risk is latent and may crystalize when we least expect it to do so.

There are circumstances where investors are losing their money in a certain exchange without them knowing that the exchange that they are using is not secure enough. That's why they are losing a certain amount of money without doing anything. It is much better to store all of your crypto asset in your personal and trusted crypto wallet instead of risking it in an exchange. It is not a problem if you are using a high reputable exchange that you might use for a long term like Coinbase. It has a lot of user and customers so that you are not that afraid of using it in storing your assets. Be mindful of choosing an exchange because all of your hardwork in your investments rely on that.

What you said is absolutely right and this is what I have been advising to everybody I communicate with but the thing is that holding bitcoins in wallet/exchange differs from person to person.
If the person is an investor then he should definitely hold it an a secure wallet but if the person is a trader then he won't be able to hold all the amount in a wallet.
A trader can't keep on transferring funds from his wallet to the exchange.
A trader should keep some amount on the exchange as well to trade on coins so that he doesn't miss the opportunity when the time arrives.
So I think that should be mentioned clearly in OP so that the traders know this difference.

P.S : Your title should be more like : Do not store your coins on an exchange, store it in your wallet.

I  can say this topic has been discussed multiple times on the forum. It should be basic practice for cryptocurrency holders. But sadly we have a lack of technical knowledge about bitcoin and wallets. Even a few users don't know about noncustodial wallets and they think web wallets and exchange is the wallet where they could receive and spend funds. I always prefer a hardware wallet if it's affordable. Otherwise at least should store funds into a open-source noncustodial wallet like Electrum. Storing funds into exchanges is the worst decision, exchange would be hacked or shut down at any time.

Unless you use a regulated exchange with deposit guarantee from a financial authority there is no reason to hold your crypto on a third party platform unless you are an active trader. Even in that case you don't need to hold more than 10-30% - even less on exchanges that offer customers up to 100x.

It is true that you need some basic cybersecurity knowledge to safely store your Bitcoin, but that can be easily acquired in a couple of hours if you put your mind on it.

Wise words. I have to come clean that although 90% of my money is in a hardware wallet I still held some ofit on exchanges ffor various reasons that included:
-trading
-laziness - I used my exchange address as my master campaign address and just kept it like that.
-laziness 2 - I had some altcoins and just did not had time to install wallets for them. Itw as easier to keep them on exchanges. I lost like $200 by doing it but when you're lazy you usually have to pay the price
-laziness 3 - I preferred the exchanges to formk my coins for me because I did not trust some wallet providers like when bsv had forked

guilty as charged :D

I am a trader and it is a very hard fact that I do not have my own private wallet on the exchange which makes it easier for hackers to get my privatekey on the exchanger via the user database
I hope that in the future there will be a solution for this because I will not be able to store my assets in a personal wallet if I do not play long term

I am storing all of my coins in an exchange wallet because  I have tried, proven and tested that it is one hundred percent safe unless you are in a safe exchange wallet. I have been a miner and a trader here for years and I don't have any experience yet to lose my coins in an exchange wallet. My advice is you should observe and do some research before you trust in an exhange wallet in order for you to avoid scam.

You can't store your wallet on an exchange. But yeah, based on your post, you mean the funds. True, one should not be using an exchange as a crypto wallet. We have already seen a lot of cases where the exchange gets hacked or they scam people. Still people don't learn anything from those unfortunate events. They still store their coins in an exchange. Its not only exchanges which are safe to use as a wallet, any kind of online webwallets aren't safe at all! If an online wallet doesn't provide you with your private keys (or they have access to your private keys), don't use them!

One should know that it is not a good idea to store large amount of crypto asset on an exchange. It's good you reminded him again.

However, there are still quite a number of people who keep their asset on the market because it make it easier for them to trade and so on. It doesn't matter if the amount is not large even though it is risky, but in large quantities is not recommended at all. Some of the exchange that have been hacked before are proof that hacker can do anything to get fresh money from the exchange and they won't stop until they do.

To date, I have never kept any asset on the exchange even though the amount is small. But it will feel better and safer if we don't leave our money with other people even though they have a very good reputation. Good thing if the exchange is willing to take responsibility, but if not what will happen to these people.

Yes that is absolutely correct. Being a trader you guys should try to keep the minimum amount on an exchange from which you can actively trade while keeping the rest in a secure crypto wallet whose privatekey you can hold. Also, the exchange you keep your coins on should be the most reputed one such as binance. Now this doesn't mean it cannot be hacked since it was already hacked few months ago. Binance could have simply escaped from the situation by not giving the coins to their users but since it was reputed enough and cared about their users they decided to use their recovery funds to give their users the lost funds. This doesn't happen with every exchange as most of them just state that they cannot do anything about it.

the topic can also be rephrased or rather corrected; Do not store your coin on the exchange, store it on your crypto wallet.

Even if that exchange is a recommended exchange, you don't need to store all of your coins in that exchange because we don't know if the exchange can always protect their site from hackers. It will be better to save the coin in our wallet so that we can manage our funds, and if we want to trade, we can transfer it into the exchanges. But I think each person will decide to store their coins in the exchange or their wallet.

This is helpful advice, especially for newbies. I have learned from my experience when it comes to storing my crypto. I used to hold my funds in exchanges before but unexpected things happened where I lost most of my holdings and that's when I decided to store it in my crypto wallet. At least, I'm the one who is in control of it. We're the one who is responsible for storing funds so we better be careful because even reputable exchanges these days could get hacked.

Exactly! Always take good care of your funds using your own private key in your own wallet and not storing it on a crypto exchange. But, I think if you do daily trading you still need to store your funds on exchange but it should be limited.

Unfortunately, those users who also store their tokens on the exchanges are also thinking the security and safety which is why it's stored on the exchanges. Secure that if the price is about to drop, they can sell it quickly without waiting for transactions to verify upon moving to an exchange wallet. Some will even think its secure to store it on Binance because they are big exchanges and will replace what is lost.  If a user is a long term holder, this not storing on the exchange will be the best for him.

Hello friend, how are you? I agree that the best way to store our assets is in a cold wallet and have our private keys in a very safe place, greetings

That's exactly right.
The issue does come into play when traders even if they're not regular want to have immediate access to their funds for a 'one-off' trading or some sporadic ones.

I suppose in these scenarios the risk is always calculated and leaving your crypto on exchanges you take on full responsibility. But it is hard to have to transfer your crypto around, specially when there are fees involved and even if these are somewhat reasonable.

There is definitely a lack of providers that guarantee protection against attacks - it is a great business model and I'm sure more exchanges will think about how to implement that. But yh, it is a difficult one to juggle.

Actually i sometimes store my Coins in exchanges but only if i plan to make a trade specially when market is Moving forward or downward .

Those chances are limited and now since i stopped in trading so i chose not store my coins in my wallet and those for Holding is in my Ledger.

Storing our crypto on exchanges has always been a bad idea, since we don't have any private key to our exchange wallet, and exchanges are prone to hacks,if the hackers eventually find their way inside, there's little or no chance at all that we will be able to recover our funds if that happens, just take cryptopia exchange users for an example, so the best choice we can always make is to always store our crypto in our wallet since we have the private key to it, even if you are a day trader just make sure the amount of crypto you have in your exchange wallet is not much.

That's the only instance where I would agree about keeping coins on exchange. But the story is different especially for those who only use exchange wallets as their primary wallet for storing their crypto as they don't want to take time to setup a wallet - stuffs like saving mnemonics and priv keys.

The exchange hacks we have had in the past are more than enough reasons not to use exchange to store cryptos. The primary purpose of using an exchange is to only do as the name implies - to exchange from one crypto to another.

Storing Cryptocurrencies on exchanges will always come with different risks. I have this experience regarding my Alternate Cryptocurrencies that I forgot to withdraw within my own Crypto wallet, then suddenly Cryptopia (the exchange website) suddenly went dark. It went out of business and my Alternate Cryptocurrencies were lost. It was such a saddening experience since I was still a newbie and I was learning how to operate exchanges and Cryptopia was one of the easiest to learn exchanges.

who said this ? they think that exchanges are big and store  big money because people are trading in it especially if its a popular exchange but they dont know that big exchanges are the one that are being targeted the most by hackers . while i never seen a wallet company that have been hacked but except maybe to some wallet users only that are careless and are holding big funds at the same time because they are giving a motive for the hackers to attack them .  your post are useful op especially for the newbies

I think I have already went through same concept or topic like this before. But, anyway, it is still essential to be repeated that exchanges are not to be treated as storage of your cryptos for that purpose and job is for the crypto wallets. The OP have a point and truly reading news and articles that recently, big exchanges are being attacked by hackers because some people are making such exchanges as good storage of their crypto thinking that it would be safe from hackers due to the exchange security wherein reality, such exchanges are still vulnerable to hacking. Better just to stick on using crypto wallets so you can track and monitor your funds on hand rather than putting it into an exchange where you are still not trying to trade such crypto coin.

Old but Gold: Not your private key, not your Crypto!
Absolutely right!

And I think, we can't say it often enough.
For everyone to internalise it, especially the newbies here...

I don't trust any exchange any longer thus I can't save my coins with them,  I had read many stories of exchange hacks, despite the fact that some of them are acclaimef to be highly reputable and trusted yet are prone to hackers, the best bet is trade with them and withdraw my coins to the wallet, I would rather keep my coins in a hardware or cold wallet thus having the custody of my private keys is Paramount to me.

Not your private key not your money.
Most of the time a trader skips this statement from their brain and end up being a victim of scam, exchange is not a place of storing funds, that's why numerous news about  exchange hacked had been sprouted around the space, not that the exchange is weak enough to maintain security policy but its easily hacked at any given point in time unlike wallets neither web, hardware nor software wallets.

Several occasions, I have received mail notifications about unknown user login into my exchange from different locations however there is not enough funds in it, therefore such scammers bothered not about my little fund, meanwhile I hardly had notifications about wallets, so it'd better to store funds in wallets than exchange for longer time.

Big fish always in the number 1 spot by those hackers, breaking the securities of those big exchange is the challenge that hackers wanted to achieved as they will be compensated very well.

You always needs to think about storing huge amount of money into some place where full control is not in your hands, having a hardware wallet is a must in order to keep your assets safe within your full control.

Well, we can't avoid putting our funds on an exchange especially when we do not want to spend more money for fees because if ever you try to withdraw it in a cryptowallet and then after a few days you decided to put your money back again then I think another transaction fee will be placed. My thoughts about this is you should always be updated and mindful of your actions. As much as possible do not store it for a long time.

I have seen many exchanges that was working good but after some days they gone with all coins. So exchanges can not be safe zone for tokens as i also lost some of my tokens after deposit exchanges. If you make trade in any exchanges that another issue but if you just store your coins in any exchanges that your great mistake. Your wallet is your bank and safe house so why you will give your wealth to another for keep. Be careful about it.

thanks.

Yes,I agree with you.Etherdelta destroys my life. When i was started bounty this forum this time i was holding my coin on mew and this mew connect to etherdelta .So i requested to everyone never hold you all asset in exchanger try to use a different type of wallet. Keep secret your private key and never click any phishing site always bookmark your essential site. On the other hand, you can trade on Bittrex or binance because it is safe and trusted.

BTC is very volatile in the current market, the price is not fixed anywhere, it is fluctuating a lot. Those who have less amount of BTC have to keep this on exchange because you can convert it to usd at any time. If you put it in a hardware wallet, you can't sell it instant, so those who have less BTC prefer Exchange.

Not your key, not your coin.
If you are not trading the coin, do not leave it on any exchange because you can't hold anyone if worse happens. Imagine if there is a fork for the coin you stored on exchange, you might not even get the coin forked.
So, create time for your self and move those coins to where you have more control.

Storing your asset on an online exchange is not quite a good idea. But people I know depend hard on third party. I mean, they are familiar with giving the third party the power of controlling their asset. You can not judge them for that. We are human and we love to feel comfortable. Thats the main reason why banks still exist and it will unquestionably take many many years for us to change from centralized system to decentralized system

As I trader, I store some of my bitcoin on my electrum wallet and many on an exchange. I trade mostly every week and holding funds on an exchange makes things flexible for me. Just choose the best way that makes you feel good. Bitcoin offers benefits and advantages. It is up to you to utilize it in your own way

I really hope that every newbie sees this. Most of these exchanges are not secured. Specifically when you cannot export your wallet. Newbies seem to buy and store their bitcoin on exchanges an this is so wrong as exchanges cab be hacked at any moment. To any newbie reading this, please download a recommended wallet and store your crypto (not on an exchange).

in this 2020 a lot of users storing crypto in the exchanges, they thought trusted exchanges will provided their money safety. but third party and without private key ur money being controlled by exchanges. the several biggest exchanges hacked are proved exchange never safe places for hold.

@Alucard1 Do not store your wallet on the exchange, store it on your crypto wallet
It is better to change your topic as you cannot store a wallet on an exchange :P. Since you are talking about storing your coins or funds in exchanges it is a known fact you cannot trust any of these exchanges if you are having a huge amount of coins. I will only move my assets to the exchange when i am trading and i will never use them as a safe storage facility.

You have addressed a very good point. Exchanges are not secure at all. We have started to hear about hacking incidents recently. One of them is the kucoin as we all know. For your safety, keep your assets in your own crypto wallet.

It is not good idea for the trader to hold or store their coins to the exchange wallet it is risky because there is more exchange hack and once you store it and your coins is in the exchanges site who is hack your money have chances to lose because the hacker have access to the system to withdraw the funds. The security of the coin is where you store it and how you hold it.

Iearn that bitcoin is not stored in a digital wallet but only to data needed to access the real bitcoin in the blockchain tht is being kept or encrypted or lock and only a certain private key could access to that data in blockchain. If this is right then why chose a bitcoin wallet to secure bitcoin? Bitcoin in block chain is secured but not the private key, or seed phrase that is being stored somewhere else like in the devices.

Still I agree on you knowing that exchanges hold your funds because they are custodial wallet for bitcoin which is being held by a  third party like the crypto exchange.

Of course, it is still safe if your fund is on your own wallet and you have your own private key and password rather than storing it in different crypto exchange because It might be lose or run away by the exchange team like what happen to IDAX before.

No matter where you store your asset, I believe they carry some risk. But we can only minimize this risk with the suggested steps as it is our own duty and responsibility to do so.

Trader can still keep their asset exchanged simply because they are actively trading all the time. If everyone doesn't entrust their asset to the exchange, then I believe it will greatly affect the demand and trading volume. The only way to anticipate unwanted thing is to only use exchange that are completely safe and responsible for all asset of their users and I think all that can be done by top exchange. However, it is different for long term investor with many asset. All the asset they own are safer if they are stored in a personal wallet that they can control whenever they want.

It also depends on what wallet you are using because sometimes there is a down of wallet that might make you lose you bitcoin and that is not a good thing for every bitcoin user. I am not saying that keeping your bitcoin on your wallet is not a good thing because it is the best thing to keep bitcoin but we also have to be wise on choosing wallet and we can ask the professional users what wallet they are using so that you also don't lose you bitcoin.

I agree on that nobody should store funds in an exchange instead of a wallet. Because we have seen so many hack situations (even in big exchanges) lately. You can lose all of your funds in a situation like that. 

this is a principle that must be understood.
many beginners use exchange wallets to make trading easier, without thinking about transaction fees for sending from private wallets to exchange wallets. whereas the risk is even greater because exchange wallets tend to be the target of hackers.
be wise in dealing with this. transaction fees incurred are proportional to your security, so if you don't care about security then you will definitely ignore this.

One of the reasons why people do tend to choose not to make active transfers from exchange wallet to their own personal crypto wallet not only just for the hassle but also with the fees.
Making transfers actively will really get some amount of fees specially now that $6 is the average fee atm for bitcoin since the network is clogged.Imagine on making
transfer back and forth and how much you do spent with just for fees alone but if you are a whale or do have lots of money then these amounts wont really be that
much of an issue.Some whales do value much of their holdings for sure and this is should how people do have this kind of mindset.

I feel safe storing my funds in BNB, but others nope. But even BNB has safety precautions, I still withdraw my coins after trading. You can sleep soundly if you know you have the full control of your funds. I think crypto users are now learning their lessons. As many hacking incidents happened in the past years, I don't think they are still storing their funds in exchanges in long term scenario. They may store it for certain period of time, but they withdraw it as soon as they can.