Bitcoin Forum

What are the advantages and disadvantages of these two methods to store your coins?

Read:

• https://bitcointalk.org/index.php?topic=1631151.0
• https://cryptosec.info/wallets

tl;dr

• exchange gets hacked, you're screwed
• if you use a hardware wallet and not store your wallet's seed phrase digitally, your funds getting hacked is near impossible unless you make a big mistake

for managing your own assets, hard wallets are the recommended choice. You don't have to worry about the exchange getting hacked, or other negative things. In addition, hard wallets are the most recommended thing for bitcoin or crypto users to keep their assets safe.
however, people sometimes choose exchanges as their repository because it is simpler to trade. however, if you can afford to have a hard wallet, it is more recommended.

A hardware wallet is a little bit expensive than using exchanges but in terms of security, you'll never be in doubt of it. But try to be considerate if you have a huge amount to store coz it was just a waste of money. Like to know that using an exchanges wallet is as risky as we don't have full control of our wallet. But if you are just fine and are comfortable using an exchange wallet then there is no problem, it was your choice either but you know they are prone to hacking which might include your account.

Hardware wallet :

- You are in control of your own Seed. (VERY important)
- You can sign your own Bitcoin address for verification purposes and if you want to put a message on the Blockchain.
- No centralized entity can block your coins.
- No ToS requirements to use your coins. (Most Exchanges do not allow gambling)
- No KYC requirements

Exchanges :

- They control your Seed
- They will in most cases not sign your Bitcoin address, if it is needed for proof of ownership.
- They can block transfers to and from your account (Bitcoin address)
- You are forced to abide by strict Terms of agreements to use their service
- You are forced to link your true identity to your Bitcoin address. (stripping all your financial anonymity and privacy)

Easy decision ..... right.  ;)

Hardware wallets will add an extra layer of security to protect your crypto if your computer is exposed to a virus or malware that can steal your private key using a key logger, they also protect you from tricks, for example, fake sites or those using phishing to try or retrieve the private key You.
and using a hardware wallet is a good way to keep control of your private keys while leaving them offline, and exchanges are not secure due to the possibility of being hacked or something unexpected happens that costs you.

Storing your coins on an exchanges can be super risky as you do not have complete control over your funds in the exchanges. By complete control i mean that you should have access to your private key which exchanges do not give you. In case, the site is closed or hacked all your funds are lost.
Hardware wallets are the best way to store your crypto although you need to spend some money in buying a hardware wallet.

Other than what mk4 said, could also be described as:
Exchanges - you let them manage your stuff, down from storing your funds to security.
Hardware wallet - you manage your own stuff, storage, security, transfer, etc. down to the last bit.

You can also compare it to how you have a knife. You give it to someone else, and you let them handle what's going to happen with it. You don't give it to someone else, you decide how it's used. It's like letting the responsibility fall to someone else (to lessen the burden for you, but also leaving it to the hand of others) vs using full responsibility for it yourself. Imo a hardware wallet defeats exchanges by a mile.

There is good example of this happening in the past and it was no one but the famous exchanger Binance which got hacked and millions were swiped in a blink of an eye. According to the sources around $40 million were stolen. Not only this, API token and 2FA codes were also got stolen by them. Imagine even with such high security by the binance it was not safe to keep the coins there. Now whether it was a conspiracy theory or real stuff I am not sure but things like can happen. Better go for hardware wallet.

Hardware wallet is the right choice to protect the assets you have, you don't need to use the internet to access a hardware wallet. for asset security, this wallet is considered more secure because without an internet network it makes it more difficult to hack. if you use the exchange market for security it is very risky even if you use 2FA Google authenticator because it is still using the internet network

Exchange itself is for exchanging and you shouldn't use it for keeping your assets especially for a long time.
Hardware wallet just what everyone has said to you are safe with it as long as you don't publish the private keys on any online spreadsheet or notes. Just keep it offline.

The foundation of cryptocurrency was built on freedom and decentralization and you achieve the freedom aspect of cryptocurrency foundation through hardware wallet (and other noncustodial wallets). This is the reason why the crypto community always advises people to make use of a noncustodial wallet because if not your keys it's not your coin and the major disadvantage of a hardware wallet is the stress of using it on a computer sometimes and you need to avoid the human error which could expose your wallet to danger.

The advantage of an exchange wallet is that it easy to use while the cons are that your holding can be stolen from you by the exchange itself (https://bitcointalk.org/index.php?topic=5373274.msg58534971#msg58534971), the exchange can also get hacked and you may need to go through KYC.

Exchanges are not the right choice for storing crypto for a long period of time even the famous exchange. Storing your crypto on an exchange is like entrusting your crypto to someone else who has a big risk of losing it. hardware wallets are still the right choice for securely storing crypto where only you hold the key

If you are talking about storing Bitcoin then there is no advantage to choosing a centralized exchange. If you want to trade daily basis, then the advantage is you can sell your coin instantly. But it should be limited only for trading if you no need to trade, nothing advantage there.

On the other hand, storing Bitcoin in hardware means there is no disadvantage. You have full control of your funds. You can spend it anytime you want. Lately, hardware starts giving the option to swap your coin. So you can swap instantly from there as well.

In simple language, storing funds in exchange means you are storing funds in the centralized bank. They could freeze funds and happen bankrupt. Storing funds in a hardware wallet means you are strong in your own locker that only you have the key. So you must keep safe your key.

use exchange for trading use other wallet for play defi and daily transaction and buy hardware wallet for HODLING long term i think simple as that

using exchange only for trading and withdraw your money #notyourkeysnotyourcoin use HW wallet for hodl #KEEPHODL  8)

Great. My question is if the coins are currently on an exchange like Coinbase or with a broker like Voyager, earning interest; does a hardware wallet "remove" them from that account? Or do they stay there still able to earn interest, but are only able to be sent from that account with access to the hardware wallet?

It's like if I am asking you what are the advantages off bananas and potatoes?  ::)
Exchanges are used only for trading Bitcoins with other coins or with fiat currencies and should not be used for storing and keeping coins, unless you want to have Mt.Gox 2 scenario.
Hardware wallets are used for keeping private keys safe and offline, not connected to internet or other network, they are usually not meant for any real trading.
You can use both of them for different purpose and you can lose coins in both ways if you are not careful.

A hardware wallet will "remove" the coins from that account. In reality what happens is that the coins are transferred out of the exchange or broker and to an address generated by your hardware wallet. After that, the coins are no longer in your exchange account but are instead stored at an address which is protected by your hardware wallet.

Your coins cannot be in two places at once, and so if you want to withdraw them to your hardware wallet then they cannot also be in your account earning interest. If you want to leave them on your account to earn interest, then they cannot be protected by your hardware wallet. This is one of the risks to all these shady places offering interest and staking rewards and everything else - you must leave your coins in complete control of a third party, who could lose them in a hack or scam you at any time without warning and there is nothing you can do about it.

It all depends on if you trust yourself more than trusting an exchange like, say binance. There are ups and downs for both. For example, if you trust yourself to keep your own funds, nobody will be able to freeze your wallet or put withdrawal restrictions on you. You can do as you like. However you are responsible for keeping your wallet safe out of the hands of thieves. If someone gets your seed phrase, thats it. your funds will be gone.

On the other hand, if you have done KYC with an exchange and THEY get hacked, then they MIGHT BE legally responsible for paying you back for their mistake. This however does not count if someone accesses your account because you gave away your login information. That being said, if the exchange itself scams you and runs away with your funds, thats too bad.

I prefer keeping funds out of exchange wallets as much as possible.

exchange is not secure ,it is very clear I will choose hardware wallet ! I wouldn't take more risk for my funds going forward if it was on an exchange ,have a lot of experience and some great guys also recommend hardware wallets over than exchange

Exchange is good but i prefer and recommend you to use hardware Wallet.
There are so many reasons behind this as below.


In the exchanges they control your Seed.
They will in most cases not sign your Bitcoin address.
if it is needed for proof of ownership.
They can block transfers to and from your account.
You are forced to abide by strict Terms of agreements to use their service.
You are forced to link your true identity to your Bitcoin address.

But in the hardware wallet you can see difference as below.


You are in control of your own Seed.
You can sign your own Bitcoin address for verification purposes and if you want to put a message on the Blockchain.
-No centralized entity can block your coins.
No ToS requirements to use your coins.

This is something that is truly not up for debate. Keeping your coins off an exchange and in a hardware wallet, air-gapped pc or a paper wallet are all more secure ways of storing your coins over leaving them on exchange. Don’t be lazy !

This shouldn't even be a question. If you are not trading your cryptocurrency assets, and say you have quite some quantity of them, I don't think the Exchange wallets are a better place for you to store your cryptocurrencies be it CEX or DEX. There are many reasons why this shouldn't be your option to save your crypto in an exchange wallet which has been pointed out in the previous post above, so using a hardware wallet or any other wallet you have the KEYS to. 

Exchange and hardware wallet are really important for a trader. If we trade, we should go to exchange and trade our tokens. Otherwise, If we have huge coins, we should put in our hardware wallet, because it is safe rather than the exchange site. Sometimes, few coins are omission from exchange, it happens to me.

People fear making use of exchanges because they are usually the targets. (I don’t know if you have heard of MtGox before?). Exchanges can get hacked, and if that should happen to an exchange you are making use of, then you might lose your coins and won’t be able to get it back again.

So, imagine when you are storing all your coins on an exchange and it happens that the exchange gets hacked, then what are you going to do about that? Hardware wallets are more secure than when you are making use of a hot wallet (exchanges).  There are two very popular hardware wallets that people make use of common and that’s Nano and Trezor wallets.

For exchanges, the convenience it provides is what makes it the general wallet that most people use. There are dozens of exchanges in the market which are available to our respective mobile phones and there are also local exchanges which are hosted per country. The downside is, the security of these exchanges are risky, given the fact that all of your stored BTCs are kept online which can be susceptible to hacking.

Hardware wallets are the go-to wallets when storing large amounts of BTCs. Most veterans here in the forum transfer their BTCs to this wallet for maximum security. Though the only downside that I can think of is the cost of acquiring such wallet. Other than that, this is the valid and safest choice if you were to transfer your BTCs.

It's true that crypto exchanges are too much risky cause it is regulated by 3rd party service provider. You may know recently a popular exchange "Bilaxy" got hacked and forced to stop their service. This centralized exchange was operated by the Republic of Seychelles and till now they are in frozen condition and seized thousands of people's cryptos.
Though it is very risky but we have to use exchanges regularly to buy/sell coins. In my opinion, we shouldn't store cryptos to exchange, after finishing any deal we should withdraw the funds to our hardware wallet as soon as possible,

Exchanges don't have as much security as hardware wallets. as we know Hardware wallets are programmed to be used as coin storage which has a security level of 90% and has been tested by whales because it is not easy to hack, unlike the exchange used for traders, not for storage that is easily accessed by hackers because stored can acces on application.

Exchange

Pros
1. You could easily make cashouts on the time you do like to do it
2. You can easily make out some buybacks whenever you do see some opportunities
3. Isnt hassle yet you do just need to access the site whenever you are

Cons
1. You dont own they keys of your wallet
2. Prone to sudden terms and condition change
3. They could anytime shutdown or run away


Hardware wallet

Pros
1. Secure and own wallet keys

Cons?
1. Losing HW or Break it.
2. Hassle if you do make active transacitons.

Definitely don't store significant amounts of crypto on an exchange. Reputable or not, there's always a slim chance that it gets compromised/hacked. Unless you're planning yo trade on a daily basis, or want the option of turning them into fiat at any possible time.

 Hardware wallets are definitely the safest option, without costing too much. They are certainly worthy if you're holding large amounts of crypto.

Whether the investment is large or small, if you want to hold for long term, you must use Hardware Wallet to ensure the safety of your investment, needless to say, today's small investment may turn into a giant asset in the future!. If hardware wallet is not available, then at least a good software wallet should be used. Of course, the wallet should be used in the offline environment. However, exchanges can be used for short-term trading, but it is better to use top-rated exchanges.

On exchange, you have to compromise on the factor "not your coins, not your keys". But they are more secure then wallets since they have security mechanism like 2 factor authentication, KYC etc. So its difficult to steal your coins from exchange like binance then from your wallets. In wallets the biggest problem is once you lost the coin you wont get it back by any means. That's why I prefer to keep my coins on exchange.

Hardware wallet is better then exchange In terms of safety. Coz a Hardware wallet It will be based on your control. But Exchange. The exchanger has an authority team. And they control everything you do.  And they have all the power. that's why Hardware wallet always better then Exchanger

Exchanges should only be used when you're actively trading, not for long term holding or generally storing crypto. I've seen hardware wallets start at approximately $120-150, if I am not mistaken, it's a petty amount if you're holding long term, large amounts of Bitcoin. I'm currently using a simple Electrum, offline wallet, stored on my daily usage laptop.

If one can't afford to buy hardware wallet, one can already use like electrum or bitcoin core for btc, metamask or trust wallet for decentralized wallet. As long as you are in full control of your keys, you are pretty secure with your portfolio. Yes, it is true, exchanges are only to be used when you are trading, after you finished, you need to transfer it back to your own wallet. Also, don't use third party wallets where you have no full control of your keys and funds.

There are a lot and I think most are stated on users above the pros and cons.
My advice is don't store your coins on exchange because either the disadvantage or advantages are not good at all upon storing your coins. The best thing is a hardware wallet which is you have your own private key. In exchange, you can store of course but not in a long term, for me, I always being paranoid thinking my coins if it is on exchange because I don't know if one day they will collapse and shut down, possible your coin cant be recovered.

The best practice, we should have control over our private key.

Hardware wallet arent that expensive if you do ask me yet it do only cost a couple of hundred bucks which if you do tend to hold some assets for long term then this would really be a worthy option or choice to make yet you can really secure your funds inside it as long those keys wont be expose.
Electrum would be enough though when you are using it on daily manner which it wont be a hassle for you to make up some switch and based on my own experience i have been only using these non custodial wallet which it is already enough as long you are that having
common sense towards security.

Metamask and Trustwallet might be decentralized, but I wouldn't trust them for long-term holding. On the one hand, there are plenty of instances of phising attempts, one of which almost got me. Also, it's fully online and directly connected to the internet, I don't have much knowledge or background about them, but I'm against using them for holding cryptocurrency.

I've only started using them because I'm staking cryptos on several platforms, through the Binance Smart Chain.

Thanks for all the answers!

The first difference is that hardware wallets are almost always left offline, completely isolated. Only when it is necessary to make a money transfer/receipt transaction, the cold wallet is connected to the internet. All the information in the hardware wallet is very well secured, very difficult for hackers to steal. However, its price is quite expensive, if you are a frequent trader, you will find it quite convenient.

According to my perspective the best way to hold btc is to put it off over the Exchange like Biannce... Bcz we have seen A lot of cases of hardwallet get stolen... So I prefer Binance more there are very rare cases of loosing our funds.... And in case of get hacked... These kind of exchanges would pay their users back through Insurance soo they are much secure as compared to hardware wallet

Yup. If we can use a hardware wallet or apps wallet, we can still convert to bitcoin, usdt or other coins so we do not have to worry about the hacker because we control our coins. I guess there will be advantages and disadvantages of using exchange or hardware wallets, especially if you want to store your coins or trade your coins for another coin. But if you want to store your coins, then a hardware wallet will be the best place to keep the coins because your coins are in your hand.

Ask yourself, expensive compared to what? Compared to a web wallet or exchange? Yes, it is. Compared to the possibility of losing all your crypto because you got infected with malware and someone hacked your account to empty all your coins from it? The exchange could get hacked like we have seen with Mt Gox or Cryptopia and many others. In that case, the device is not expensive at all.

Most of us carry smartphones that cost around a grand or more. Those are expensive gadgets we could save money on.

That's a very bad strategy you are suggesting there Alen. Someone once said that exchanges can be divided in two groups: Those that got hacked and those that will get hacked. No idea who said it though. The question is, which of those two will be holding your coins when it happens?

There is absolutely no reason why you should use an exchange as a wallet for storing your crypto unless you are looking for trouble. If you think exchanges don't get hacked or are involved in various types of exit scams, make some research on the subject and see what you can find.

In general, everyone recommends hardware wallets, because it is almost impossible to hack. I wrote "practically" impossible, because I am very surprised at inode hackers who hack everything that is possible and impossible, although there were no cases of hacking with a hardware wallet, but nevertheless, do not underestimate the scammers.

Hardware we have full control to our coin, maybe pros that we save coins in exchange is we can sell it immediately if needed. Because if save in our own wallet, that means more fees that will be used for transaction especially if we are trade and must doing deposit and withdrawal coins.

If that is so just because of the fess, I won't hesitate to spend less $1-2 for the fess rather than your whole crypto earning will disappear once the exchangers are becomes compromised.  It's been always good to store your coin in a hardware wallet or any wallet that you have full control over your private key, in that way your coins are safe.

It could be the advantage of an exchange is the quick trade into fiat if you need it but it's just a matter of an hour if you'll wait while using hardware wallets.  The most important factor is the safeguard of your portfolio and avoiding possible scams or even exchange becomes compromised and your coin might be stuck.

Exchange wallet is not secure, but flexible and you will have more speed to do transaction because its inside the market. For your own security use hardware wallet, with it you can control anything yourself. So i suggest you use them both for two different purpose, exchange wallet for your moving assets, and hardware wallet for your long and saving investment.

@mk4 has given you a very precise explanation....if you put your assets on the exchange then it is very vulnerable, many suggest that you use a hardware wallet if you have a lot of assets to avoid the worst that could happen, especially since hackers have 1000 ways to get prey. 

I think that wont be the case with recognized exchanges like binance since they have bank accounts in different countries and its impossible for run them. As governments have tight control over them.


With hardware or software wallets thats the biggest issue and IMO it overpowers all the advantages offered by the hardware/software wallets. Once you loss it, you get it back at any cost.

Nothing is impossible in crypto, cex is cex and our money is held by them, nothing we could do if they are doing scam, i know if the exchanges is already famous and their leaders are known by the people. But if the run away happen, they will just wanted by the police and going to jail if got catch, but our assts will not return.

And yeah, hardware wallet could be broke but if you have more than 1 mils USD worth coin in your wallet, it's easier to keep the hardware wallet safe compared to aimed by the pro hackers which aiming large amount of money in crypto wallet.

Exchange is a centralized system. Where a admin or a group of member control everything. They can monitize your coins or transfer if they wants to as security perpose. Then what's the matter if you have a house but it's key is in house developer's hand. What do you say? Is there any security left for you?

A hardware wallet is a fully decentralized system for storing. It has no internet access so hackers can't reached it. You can transfer you asset anytime .

You should use hardware wallet if you are really concern about you security.

Hardware wallets are the main wallets that are used to store crypto assets more securely and have full control over the assets we have.
While the use of Exchange is only as a trading mode, and some large exchanges like Binance can still be trusted to store our crypto assets.
Nonetheless, exchanges are still vulnerable to break-ins. Both wallets have their own advantages and disadvantages.

When your assets are on exchange, isn't about the hackers because I believed that hackers are not easy to compromise exchange.
I have doubt that the scam that happened on exchange was an inside job and this is what I have worried about when my coin is on an exchange, there is no way to protect us from that scenario. But how about the exchange that offers SAFU? They promised that your fund is safe.
To have peace in your mind, much better to choose a hardware wallet and they are right.

Wont be easy to compromise but the probability or chance would be always there and you shouldnt really cross out into those chances which would really be a regretful thing once it do happen and this is where you do learn up things on unfortunate conditions.
So its neither you would make use of hardware wallet depending or according into your needs so its would really vary honestly.
If you do all sort of security of your account then its what matter most.

The only advantage that exchange wallets have is we can make use of the coin to trade easily. But in terms of safety and security assurance, there is nothing we can find, even know exchanges like Binance can't give that, how much more of the others?

If that we only just hold, exchange wallet is not the best choice. We'd rather use wallets either online or offline wallet as long as we have full control of the keys as we already know that we are secured enough. But of course, we must be careful in accessing sites as the usual reason why people lost their accounts.

i think hardware wallet its prefer

Paying close attention to security is indeed a must, especially by using a hardware wallet. I have 2 types of hardware wallets that both feature asset storage and tight security.
But the security of hardware wallets must also be accompanied by user awareness, sometimes fatal errors occur because users are very careless.

Simply put you must never hold your coins at an exchange, now if you are a trader I understand why you have your coins in an exchange, as you are sacrificing some of the security of your coins in order to try to increase the size of your holdings.

But if you are not a trader then your coins must never be in an exchange or any wallet you do not have the private keys, having your coins in a hardware wallet gives you complete ownership of your coins while at the same time it gives you protection from hackers that most people cannot get on their own, so if you have to decide between those two options then get a hardware wallet, I know they cost money but they are worth it.

Seriously I will never advise anybody to keep coin in an exchange because if a coin is in exchange wallet address your money is at risk compare to if you store in a hardware wallet address. If a coin is stored in a hardware wallet address I believe the only risk associated with it is that if you lose your private key which I always advise everybody to also look for a secure place to keep there private key. But if you keep your money in an exchange you can easily lose your money because even the exchange can come up with a new rule which will definitely affect you and also the exchange can be hacked which might affect your fund also  mostly in all exhange there is always withdrawal restrictions and I believe there are many more reasons why is not safe to keep money in exchange.

I hope that OP gets something and enlightens his mind now. Having the two different wallets has also a different purpose and that it needs to be clear before using one of them. And I believe that you grasp some ideas and know what you gonna do to safeguard your funds out from this risky environment.
I guess, all the replies above are good enough to guide you on which one to choose. If ever you've got a mistake, that was not because we are wrong, it is definitely it's yours.

By understanding the explanation you mentioned above, I think it is a knowledge for all of us, that storing assets on an exchange is more risky, because even the largest exchanges have experienced hacking, therefore hardware is a wise choice where the responsibility for security lies with yourself. and finally we should understand the signs that a hack is about to occur, so that we can prevent it

Hodling and keeping tradeable assets in an exchange isn't a bad idea but It is advisable to use or keep coins we can afford to lose in case of any eventuality eg hacking of exchange, blocking of account holders as a result of going against some rules and restrictions etc, however it had been retriated that hardware wallet is the safest of all wallets available, keeping huge coins in a hardware wallet would ensure maximum security of our digital assets.

Lets see your opinion with your coin holding long term or short term, if you save assets on hardware wallet I think you are long term investor because most safety with this saving assets but little disadvantage when try to sell you need waiting few minutes more for selling. In hardware wallet need to waiting with sync but if hold on exchange just opening an account than you can sell without one minutes before price dump.

i trade of course ..

aside from my income in joining signature campaigns and some bounties that i earned altcoins and converting to bitcoin.

but OP is asking about accumulating bitcoin and not by holding .

Exchanges -
I particularly see no advantage in keeping your crypto there because if by any means, the exchange gets hacked, you are at the risk of losing everything you had there. Though, there is one advantage and that is, you can trade any time you want and grow your coins.

Hardware wallet -
It is highly advantageous because it keeps your money very safe as it is in your custody and you don't depend on anybody here. Though, you also should not lose it as if somebody knows your common password signs and gets into your wallet (except those which feature fingerprint scanner), your money may get in trouble.

That probably the intention of having a hardware wallet is for long-term holding, not for trading purposes. If you hold 1BTC at least, that seems worth having it but if you only have a chuck of Bitcoin, I don't think so. A lot of online wallets are available and in fact, I use a custodial wallet for a very long time but I was lucky I'd never get hacked. Maybe it was because I'd care about my wallet and gadget which is very important and even a hardware wallet won't give you 100% safe if you are also careless.

Well that is one of a good example, the easy to trade when you are in exchange but if when you are in a hardware wallet, you need to wait and spend a little fee when you want to trade into fiat. The good question here is which you prefer to hold, in a long term or a short term holding of coins.
Both of them have advantages and disadvantages on us and which we are prefer and I think many members here have a different answer which they like to save their coins, either in a long term or short term.

The only thing we need to think there is never put a huge amount of money on exchange and never choose this as a wallet to hold for long time since anything might happen unto it although the advantage is we can easily trade out assets easily but we don't know on what will happen to them or how long they can protect our assets away from hackers.

Although there's disadvantage for using hardware wallet in terms of transaction delays and fees but this is the best option if we talk about safety since we can assure that our asset is safe if we want to save it for long time.

Put up only the amount you could afford to lose i should say because aside on exchange hacking they could also make out some sudden change which means they could lock up funds of users if there would be some changes  specially if its asking for some verification.
You should know the risk on putting up your funds on these platforms and you should know the specific usage and
functions between a wallet which is for long term and exchange for active trades.

There's a lot of advantages when we use hardware wallet as to compared it with storing them on your exchange account. When it's stored at exchange site, you're vulnerable of phishing attacks and hackers because you don't own the full security of it. Hardware wallet capabilities is with full security and the only advantages is on unexpected accident like power interruption and hardware malfunction, you couldn't afford to back it up instantly.

It's true Binance will pay their customers when they got hacked, IF the amount losses are lower than the SAFU allocations. We don't know how much the total funds of Binance SAFU, that's the insurance they can pay back. If they got hacked all, it's very unlikely they will pay their customers.

I don't think $50-$100 is expensive for make your coins almost safe, I believe you have good amount money on your wallet. Well, a frequent trader mostly don't use hardware wallet since the fees will took up your profit. They usually split 10% to exchanges and 90% to hardware wallet.

When new people enter in the crypto, they usually first make account on the exchanges and they consider that these exchanges are serving the purpose of the wallet which is totally wrong. Only a few like OP curious to know the difference between the two while majority of the newbies are still keeping their funds on the exchanges.

I think if you have a small amount of crypto (less than 1000$k) and you’re just hodling then it’s probably not worth getting a hardware wallet as transfer fees May end up eating into your stack. So IMO, it depends how much you hold your coin..

Putting your funds on exchange is simply trusting them like you give your funds to someone you trust and take them out when you need but do you believe they will not cheat you or what if they got attacked and attacker take your fund? Same is the case with these exchanges like they have your keys which means access to the funds directly and they could be scam or hacked and your funds are gone but the hardware wallet is always with you and each time you make a transaction you have to confirm the same and keys always remain safe but you only need to backup seed phrase safely.

The hardware wallet is so secured than any exchange. Where you're no need to kyc . Where no one can control your asset portfolio.  So i suggest hardware wallet  to every crypto holder .

The big advantage of having your funds in your hardware wallet is that you have the full control of your funds and it's 100% safe from intrusion. Your keys, your funds in short. On exchange on the other hands, the inevitable scenario will be the big fear of being hacked and we all know already exchange had been hacked over the years even top tier exchange is not safe.

The harder the wallet the safer your coin. Except for decentralized exchange, exchanges tend to suffocate their customers with KYC verification and also freeze ones funds if their deposits exceed certain amount without a valid KYC verification. Hard wallet has more advantage and its just the safest and most secured

Never let your funds stays in exchange for long time , even a week is not a good idea , that is why there is a Hardware wallets in which we are all use now storing our precious cryptocurrencies .
If you really wanted a safer holding then use hardware wallet for storing and use exchange for trading ,
that easy to understand and done.

When you keep money in an exchange wallet, you should already be okay to sharing your money with the exchange also. Because there is always a possibility for any exchange to be hacked. But using a hardware wallet is always much safer. Because you keep your wallet in a USB and there is no way that someone can reach it unless you make a really big mistake by using it somewhere not credible.

I think hardware Wallet is the best choice ever. There are so many reasons behind this. You don't need KYC . You are free to send or receive. No one can control your asset portfolio. So this is the best to use hardware wallet.

I'm also caring about the security of my cryptocurrencies a lot. And the only solution for it seems like a hardware wallet. Because as it is not in any exchange or an app, it is much safer against the hacking attempts. The only thing the owner needs to do is not using the wallet on any computer. The owner should be certain of the thing that the computer is safe before using the wallet.

I would add that it really depends on the exchange and the amount we are talking about relative to your overall wealth. I am not giving an arbitrary number now as 100 dollars could mean something very different to someone  poor than to someone rich.

But when you have a rather small amount and you store that on an exchange like Coinbase, the chance that you are going to lose that crypto due to a hack is really small in my opinion. I guess Coinbase even has something like a deposit insurance required by regulators. There are often times limits though as per individual, but that's why I said it also depends on the amount.

So people use Hardware Wallets only to escape from the hands of hackers? Hackers are also able to steal your funds from HW if you are not aware of it. Coinbase is regulated by the regulatory body does that mean your money is safe there? If Coinbase stopped its service today, and seize your funds, would you be able to withdraw your Bitcoins from Coinbase? Did they give you a private key? Listen, people use HW not only to avoid hacking but also to get rid of control of the regulatory body.

True that. I believe only if you intend to keep trading your coins or tokens, you don't have to save them in an exchange wallet. I don't believe you have the keys to your wallet in an exchange wallet and you know what they say, Not your keys not your crypto. So if you really have some amount of assets that you need to store, a personal wallet is it.

There's no sense in keeping large amounts of money in exchange wallets. Exchanges get hacked constantly, and your money may disappear for good. It's amazing how many people I've already encountered in the crypto community who have not even installed desktop wallets, let alone own a hardware wallet. People need to learn to make use of the tools they have at their disposal.

I prefer to store on exchanges, of course, exchanges are trusted and I have gone through KYC, some of the assets on my exchanges are Binance, Coinbase and Gate.io, I have been trading and storing my crypto assets on exchanges for almost 3 years, everything is fine, maybe we do not hold the private key, but as long as the exchanges are trusted, of course it is also safe.

No disrespect towards exchanges, but as long I do not have the full custody of my coins and tokens, it’s not safe to use them as a storage. Not even Binance is exempted from getting compromised last time. Whatever security measures that they have in place, these hackers and intruders are just one step ahead finding ways to break that barrier. I can only use those exchanges to trade coins and tokens.

Hardware wallets are simply the best to store our hard-earned assets and coins. SafePal is the cheapest hardware wallet right now at $49.99 (currently on a discount from the original price of $69.99) and I’ve just unboxed it earlier. Ledger Nano S and Trezor are also great hardware wallets, but they are kinda pricey. SecuX, which is Taiwan-based is also a hardware wallet with a unique design, which I also have that too shipped via FedEx.

Worth the investment to store my assets safely than relying on exchanges and mobile apps.

Well, i think the advantage of using hardware wallet is off-grid, offline wallet, no one would have access to your wallet but you. Also, the exchange wallet has easy accessibility anywhere when you have internet connection but it's less secure compared to hardware wallet. Always remember, not your keys not your coins.
   

With a mainstream exchange like Coinbase and a relatively small amount of crypto, it might be okay to keep your crypto there. However, if you want more security, a non-custodial cryptocurrency wallet may be more suitable. I understand that you want your funds available at the exchange if you are actively trading, but there is really no point in using exchange wallet for long-term holding. Every exchange, no matter how popular it is, is susceptible to hacking. It has happened before, it will happen again.

You are absolutely right, in fact recently there was a mishap with Binance, because all Colombian users were detained under investigation all their accounts, by orders of the police of another country, which generated a great controversy because international lawyers spoke Before Binance, I know that BInance lost many clients due to this type of collaboration with the police of another country to investigate clients from another country, which in my opinion is not the right thing to do, however before these events it is better to have your own wallet with all the security implemented.

What's clear is that with hardware wallets everything ends up being dumped on you and no one can do anything with what you put there other than yourself and perhaps the family you have given the information to open them.

now everything is advanced and the hardware can easily be used in any system as long as there is an internet connection, so it is clear from a security point of view I totally agree and agree with you, obviously the hardware is very capable to use.

An online wallet is the same as an exchange, while some may argue that at least with the online wallet you have access to your private keys while this is not true for the exchange, at the end of the day your coins are now in a centralized service which could be hacked at any moment since they are a large target for hackers to attack.

It is better to use your own software wallet like electrum in that case, however if you have the money, you have a large amount of bitcoin or altcoins, or simply you cannot secure your coins properly by yourself then it makes more sense to get a hardware wallet.

Yes, the hardware wallets are the best to save your crypto provided you have a good amount of money in crypto. Hardware wallets may not be recommended to newbies who have very little funds. They can start with desktop wallets before shifting to hardware wallets.

Even mobile non-custodian wallet is still better than exchange wallets as long as you can safely keep the keys offline. In the recent past, some exchanges have shutdown either due to hack or inability to continue the running of such exchange. Well, not everyone get back their money from such centralized exchanges. To be more secured, get a hardware wallet and keep bulk of your fund there.

OP you need to know how to separate things, when you want to hodl then use hardware wallet but if you want to day trade then leave in the exchange a part of the coins you day trade because if you make withdrawals every day you will pay a lot of fees in the end though have currencies that have low fees, but there are cases where altcoin has dropped a lot in price and as you don't have currency on the exchange, then you miss a good buying opportunity

I was scrolling through the trading discussion section of the forum, and I came across a post that talked about an exchange that got hacked about recently. That is enough reason for you to avoid exchange wallet. You can only make use of exchange wallets when you want to trade your cryptocurrencies, but not for your main storage.

If you are using your exchange as your main storage, if that exchange should get hacked then everything you have worked for is gone. Avoid making use of exchanges as your main storage, try to make use of hardware wallets. Hardware wallets are more safer than making use of an exchange. Although I do know that every type of wallet can come with its own risk, but it’s worst when you are making use of an exchange.

between exchanges or hardware wallets both have advantages and disadvantages.

The exchange has the disadvantage of being vulnerable and prone to hacking, but has the advantage of being easy to trade without having to transfer assets.

hardware wallet is very safe from hacking, but has the disadvantage of having to transfer to an exchange if you want to use it for trading

Exchange is good if u want trading . and hardware is secure than any exchange because it is in your control   and no one can get access to your hardware wallet.
Whenever you done some deposit or withdraw any thing . The exchange can control it .

You can still own a hard wallet if you do trading, if you don't trust the exchange to hold your bitcoin for a period of time, you can just send it to your hard wallet and send back to exchange if you need to trade again. It's quite a hassle but if you are looking for security that's the best thing to do as we never know when an exchange will scam us or will get hack and our funds will be lost forever.

In terms of security, a hard wallet is more secure, however, you also have to understand that if you lose your hard wallet, you also lose all your assets on it. so be careful always in safe keeping your hard wallet to protect your investments.

Everything has been mentioned and links has been shared , so i will just tell you once again that never trust exchange for long term holding because the exchange are the target of hackers and other bad element that wanted to take our coins , and there are many stories before and even recently that exchange is having issues about security.
so yes trust Hardware wallet as long as you can keep your seeds safer because if not then you will be facing another trouble again.

I am holding my big chunks of coins in hardware wallet but i also hold some of my funds inside exchange because i love to watch the market and see what can be profitable in short term.
so yes i will be finding some good moving project and my funds inside exchange will be for buying and selling purpose .

as i know about this topic are:
EXCHANGER:
1. exchanger can be close their service, so you need to move your cryptocurrencies to another wallet
2 .maybe it will not safe like the hardware wallet, exchanger can be hacked by the hacker, and access all the control to send or withdraw the cryptocurrencies
3. but the advantage of the exchanger are, its flexible, you never save your hardware things, you just need to remember your account and it will be great if you use it portable

HARDWARE WALLET:
1. hardware wallet are the most secure wallet, you can store it and dont be afraid with hacker, they can't have access to your hardware wallet
2. but the disadvantages are, you need to save the hardware wallet in the safe place, if you lost your hardware wallet, it means you lost your coin and your wallet

It was not a big deal which wallet you are able to use unless you know how to take care of it. That exchanges wallet is solely for trading purposes and most of us here are for that reason. But if we just plan for a long-term investment, a hardware wallet is the best choice. However, that was expensive that mostly it holds some holders not to buy it but rather to consider custodial and exchanges wallet available online.

Yes ,we all know that hardware wallet is more secured than any other wallet if it is even the exchange wallet .We have seen many times that many exchange being hacked on the past ,hacker always use the smart way to hack .So it is so necessary to look into the security system always .I always use hardware wallet to store my asset and also hold a few into exchange wallet for trading .I use all the security system and i feel secured on this way i actually never faced any hacking .I just wanna suggest if you want to hold your asset for long term you may use hardware wallet to hold it .

well, it is indeed very useful when we will hold coins for a certain time. Personally, I like to use a hardwallet to hold my assets over the long term. Unfortunately, to date, I haven't purchased one from the hardwallet.
In terms of trading, I think it might be easier to keep it on an exchange, because considering the fee issue, it also needs to be considered. however, depending on the goal, if in the long term, then hardwallet is the best, while for trading, it is better to keep it on the exchange until we really want to hold it in the long term.

Hardware wallet is an extra level of crypto security, it is unhackable as the user control it. It goes with you wherever you're going. Unlike exchange wallet that are prone to hackers. Some even go on maintenance when you need them most.

Have many difference between Hardware wallet and Crypto exchange, Only you can control your Fund Through Hardware wallet and nobody can access your wallet but Exchange means you share your everything with another person, your fund is not secure in exchange becouse second person can control your Fund.                 

Sharing everything is not an appropriate term here. Once you use an exchange service, it's just common that you need to settle things there by transferring your funds "in order" to use what you are trying to do.

It's also irrelevant to say that it's not 100% safe when we use an exchange. It's subjective but it's not that when you use an exchange, it's already not safe. To lessen the risk, choose reputable platforms instead of using small exchanges.

I think that my opinion isn’t totally incorrect, becouse i see some small crypto exchange did scam with his user. And for this reason we always try to use big and secure exchange. But we see that on the past Kucoin has Hacked, some days ago hacker attack Bitmart exchange so exchange means have risk. We can use exchange only for Trading purpose not as a holding wallet for our Fund.                   

exchange and hardware have significant differences.  for exchange has the advantage of being able to see prices spontaneously and at any time but has the disadvantage of being vulnerable to hacking.  however, hardware wallets have high security advantages that can be controlled by the kpin owner.  So both of these methods have their respective advantages

Hardware wallet, you own your it, it's safety is with you and you controls your assets yourself. Unlike exchange wallet that can get compromised anytime or even get hacked or go on maintenance the critical time you needed to deposit or withdraw.

Many people will advise you to put your money on the exchange. But my suggestion is to put it in a hard wallet. Both have their own advantages. I prefer to put it in a hard wallet. I don't operate currency frequently, and I don't worry about exchanges being hacked.

I prefer hardware wallets. because if you look at the risk of crypto assets, there is a very large risk of hacking and many cases of hacking are lost on exchanges or online wallets. I'm currently using a hardware wallet and it's safe until now for storage

Both have their advantages and disadvantages. It would just really be on your personal preference to choose which one will suit what you want and need.

Exchange Advantages:

1. Convenience - It is convenient to use in a sense that you don't have to undergo many and long processes before transacting. This is easy to install as well and most of the time free download in PlayStore or AppStore. After you download, you'll just follow a few steps to be able to make and use your account. You can access it anytime, anywhere as long as you have your gadget in you, you  can open your account.

2. Easy to learn how to use - Because of its simple interface, it is easy to familiarize and to use regardless of age bracket. Its features are mostly comprehended quickly as well as the runaround inside the exchanger platform.

Exchanger Disadvantages:

1. KYC is required - To some this is a disadvantage that's why I put it here. In most exchanges, KYC is mandatory most especially if it is a centralized one because they just follow local government protocol as well as to detect the accounts of those people who are doing illegal activities such as laundering money using their platform. This possess a risk because once you give your consent in providing your personal information to them, they could use or sell it without you knowing, despite having the agreement that they will keep your personal data private. Unfortunately, this really happens. In addition, identity theft is also possible once their security has been breached which could lead to a bigger problem in the future if ever it happens.

2. Hacking incident is frequent - I think most of us are already aware of this. Several incidents have been reported in the past up until the present regarding this issue. Exchangers, most especially the centralized ones are prone to hacking because they have weaker security protocols compared to others which is the reason why it is mostly infiltrated by hackers. Recently, coinbase has been compromised which just caused thousands of users to lose money they have their account. Despite the OTP feature and other security measures of exchangers, the hackers still manage to bypass the security with just a few clicks and viola! they were able to stole huge sum of money that cannot be returned back to the account holders.

Hardwallet Advantages:

1. Security - No doubt, hardwallet is really the best when it comes to security. If you want your assets to be safe, it is recommended to have a hardwallet that could gatekeep your assets while you are doing your own thing. Because hardwallets have a built-in and specialized chips in them, it is harder for a hacker to infiltrate your account. Once they try, they won't be able to succeed unless you give your password and seed phrase to them wide open.  

2. More coins are available and many accounts can be stored - In hardwallets, there are more options in coins. You are not limited to the usual coins but can access many coins in which you can invest and trade in. In addition, you could add more accounts depending on your hardwallet model. In some hardwallets, it has 20 maximum accounts, some 50 accounts, and so on. Of course, this varies in accordance to the price. Indeed, you get what you pay for.

Hardwallet Disadvantage:

1. Cost - Hardwallets are expensive. Most of it costs over hundred or even thousand dollars depending on the brand, model, and features. But this should not be viewed as a worthless expense because we are talking about security here. If you can afford to invest in crypto, you should also invest in security. Because once your account has been hacked, all of your assets will be compromised, be gone, and all put into waste in no time.

I hope I was able to answer your question and help you decide which one is better by laying down all the information about the two.

80% of my crypto assets I store in a hardware wallet, I store assets in a hardware wallet of course for security reasons and I make cryptocurrencies a long-term investment that can change my life later, I hope there will be a significant price spike so I can sell some for venture capital .

Hardware wallet all the way, you know how many exchanges in the recent years have been hacked? I don't think that you would take a chance if you know how many. But you have to also be careful though as hardware wallet can be tampered with and there's also the possibility of forgetting the password after a long time of not using it.

yes hardware wallets are a great choice for storing cryptocurrencies. Hackers will definitely find it difficult to hack a hardware wallet because the wallet can only be accessed by the owner, the hardware wallet will remain safe as long as the wallet owner is not careless. Hardware wallets have a slight drawback, namely that the owner of the wallet has to carry it where he wants to go because if he doesn't take the hardware wallet with him then he will find it difficult to make transactions.

When you do make out some active trades then it would be sensible if you would store up your coins on an exchange for fast executions of trades but if you
are minding about your coins security then hardware wallet would be the best choice.Always mind off that as long you dont possess the keys of a certain wallet which is mostly on custodial wallets like exchange then its not totally 100% your coin or simply it doesnt really belong to you.
You know the risk behind thats why when making out decisions then this is something would really vary.

If we look at the history where some of the major exchanges have been hacked, this should raise our awareness not to keep all our coins
on exchanges. It is better to store coins on exchanges only for trading, most of the coins we have can be stored in a hardware wallet which is
indeed the safest place in my opinion for now. Even if we trade on exchanges and manage to make a profit, I recommend that the profit
be immediately transferred to our hardware wallet. The conclusion is that it is not safe to store too many coins on exchanges, even though
the exchanges we use have sophisticated security systems, still there is no guarantee 100% safe. Because after all exchanges will always be
a target for hackers, because as we know the circulation of coins on exchanges is very large.

Those people that are advising to put your money into exchanges are giving you a bad suggestion.

As you hold, the advantage is in the hardware wallet and if you don't have any intention to transfer it from time to time, hardware wallet is the best keep.

While in exchange, if you're going to use it to keep your assets, it's called an exchange and it has a different purpose and your funds are in risk if you keep it there.

On exchange you are not owner of your funds.
you can get better prices on exchanges and almost most of coin's on exchanges & can have better trade experience.
 
On Hardware wallets you are only owner of your funds.
it provide security can be used with dex , dapps , Defi.
 

Better hold on exchange because you can sell when coin suddenly pump, hard ware wallet need time more than few minute to access and sending to market take few minutes for deposit process. We don't know when coin suddenly pump and not just few while only coin raise higher price before dump, saving on hard ware wallet you waste moment for selling on higher price when got chance to sell with higher value.

If you are an active day trader or spot trader then holding your asset in exchange is better but I think if you have had a number of assets or crypto that you're in a hold and let's say you have a bitcoin and ethereum token then might be good if you have also a hard wallet at the same time. Investors or traders are investing in hard wallets to protect their assets. In my case, I do use both hard wallet and exchange but leave only those tokens that I am actively using in my day trade and putting some token in my hard wallet.

even though, we should seperate our investment assets and the trading assets in case of security and also for holding back our emotion when we are taking quick decision about selling or buying a sudden pump coin.
When we all placing our assets to exchange, we have a desire to go all in with it when we are really confident with our decision and sometime ended up loss.

Holding assets on exchanges isn't all that bad. That is for day traders, holding an exchange is very risky for the holder. Hold assets on exchange as the exchange is controlling your money, you are not the real owner. In contrast, holding assets on a hardware wallet you have full control of all your assets, as long as you do not reveal your secret seeds to others.

if you store your crypto assets on an exchange then prepare yourself for possible losses that may befall you.  the safest place to store assets for the long term is a hardware wallet and then secure it in a vault..

You argue in a way that allows for either black or white only. That's nonsense. I deliberately pointed out the difference between small amounts of investors who want to get in but have no idea about dealing with cryptos in a secure way and people who got some more money on the line. When you are playing around with a 100 bucks as a US citizen, you might be alright keeping it on Coinbase as I do indeed deem chances for Coinbase to collapse very low. There are people who want to get in with just a little amount of money, but are not eager to deal with hardware wallets or paper wallets and stuff. That doesn't mean I would not prefer a hardware wallet over leaving my coins on an exchange, I do indeed use hardware wallets. But I get where some people are coming from when they deem it too much of a hassle to secure their 100 bucks in crypto with a hardware wallet.

If you can buy a hardware wallet, then definitely a hardware wallet is recommended. There are lots of reasons, but if I want to say it in short, it will be like this: Exchange is controlling your funds. You didn't hold your funds in exchange. You held your funds in the company wallet and they have full control of your money. But in a hardware wallet, you create your own account where you hold your money in your own wallet. As a result, you are the sole owner of your money.But remember, do not share your seed. If you pass, both hardware and exchange are safe to use, but always use the best exchange like Binance, Ftx, etc. And, if you're looking for a hardware wallet, don't buy from a third-party website just to save a few dollars; it could be dangerous.It might come with a virus. Always buy from the official website. That's it. Thank you.

Exchange provide us with the facility that we can place our money there and without any barrier we could withdraw it any time. It also helps us to buy different currencies with our assets . But the most dangerous thing is that the hackers are now trying to hack account having more assets so they are having Access to all the exchanges as they connected through internet.
In the case hardware wallet would be better because it is not accessible to hackers and you can carry it in your wallet anywhere and can use it anytime by connecting it with your own device. But the difficulty we are facing with it is that these wallets are actually electronic devices and any damage to them can result in a great loss.

Exchanges don't have as much security as hardware wallets. as we know Hardware wallets are programmed to be used as coin storage which has a security level of 90% and has been tested by whales because it is not easy to hack, unlike the exchange used for traders, not for storage that is easily accessed by hackers because stored can acces on application.

true, exchangers obviously always have loopholes that can make hacking happen by irresponsible people, but experienced exchangers can always take responsibility for mistakes made by replacing all participants who have funds there, actually there is protection too if we use a good exchanger, but when compared to security, it is clear that the hardware is very well tested and good. but obviously it is for those who are active in trading and need very high privacy so that the funds cannot be taken, if only on a small scale it is enough in a wallet which is also good to use.

You should ask your self this having your coin in your full custody or handing it over to a centralized institution which is more preferred. I guess you would go for the former. Everyone wants to have full control of their assets and this is what the hardware wallet offers you at no cost or expense but going by exchange your will be asked to provide series of documents to proof your authenticity through KYC verification.

hardware wallet is more secure than exchanger, because exchanger save all your asset, by online, there are possibility that hacked by hacker, but if you use hardware wallet you save all of your asset on hardware wallet, and it will never hacked by hacker, but the consequence you should save it on a safest place

Good exchanges keep most of their cryptocurrency reserves on cold wallets which makes them as safe as hardware wallets, in some cases even more secure because they will use multisignature setups where several hardware wallets are required to send crypto, and often provide additional insurance for your coins. I haven't heard of the cases where hackers managed to access the cold storage of an exchange.
Hardware wallets are special purpose electronic devices that can operate offline, with which you can store, generate your keys and sign transactions. The level of their security cannot be accurately estimated because it will depend on many factors including how experienced the actual user.
I think you are confusing whales with security experts.
Unlike cold storage, an exchange's hot wallets are connected to the Internet, which makes them vulnerable to hacks and greatly increases the attack surface. But this is also true for ordinary users, which is why it is not recommended to hold huge amounts of money on mobile and desktop wallets.