Coins on an exchange, any exchange, are never safe

[kawetsriyanto]

Every day it seems a new story emerges about an exchange going bankrupt. Has been a recurring pattern since the Mt. Gox collapse. Why, with so many examples of failures, do people continue to keep their money on these?

Yep, there will be always news of a bankrupt exchange, it is ideally a warning for everyone to keep their coins in private wallets (not in the exchange wallets). However, not every individual who has crypto coins really understands and realizes the risks. Some of them may be beginners, others may be lazy to move their coins to private wallets because of the transfer fees. And some people may think that even if there is a problem with the exchange, as long as it is a trusted exchange like Binance, they will refund the customers' assets. These people will always consider putting their coins in exchange wallets, so the news of bankrupt exchanges won't work on them.

[AmoreJaz]

Well, we tend to believe or hope that it won't happen to us. In my opinion, we use exchanges out of comfort. They are relatively simple to set up and provide you with a wide range of capabilities.Exchanges such as Binance or CEX.io go as far as having investment plans, staking functions, and saving functions. On the one hand, I feel relatively safe on Binance; however, everyone is guilty until proven innocent. You never know what might happen to the exchange, but even if Binance went bankrupt, which is unlikely, it would have a huge impact on cryptocurrencies.

From what I've understood, can someone be absolutely safe? I'm storing bitcoin on my computer through Electrum; how safe am I? How can you store cryptocurrencies when using DeFi projects and being involved in staking? Metamask doesn't look too safe to me.

binance has their SAFU in place. so if anything happens, you have your insurance. don't know if FTX has that kind of feature. but in any case, we should not really store our funds in CEXs. however, if you are staking or availing the savings feature, i am more confident to use binance services. but in this market, we really don't know what will happen next, even top crypto-exchange like FTX can go bankrupt without a warning.

[Rruchi man]

Every day it seems a new story emerges about an exchange going bankrupt. Has been a recurring pattern since the Mt. Gox collapse. Why, with so many examples of failures, do people continue to keep their money on these? You don't own crypto if you have "coins" on an exchange, you have an IOU from a business that may or may not even be solvent.

People never learn because they think that after it has happened, it never happens again or it doesn't repeat itself. They refuse to learn from people's experience. No matter how reputable an exchange seems, like they can never go bankrupt or be victims of hack, people who have not learnt this lesson should learn it never to keep their coins in an exchange when there are cold storages and safer places for them.

[Welsh]

People never learn because they think that after it has happened, it never happens again or it doesn't repeat itself. They refuse to learn from people's experience. No matter how reputable an exchange seems, like they can never go bankrupt or be victims of hack, people who have not learnt this lesson should learn it never to keep their coins in an exchange when there are cold storages and safer places for them.

I said it the other day, but eventually this won't happen. Since, opening a centralised exchange in the first place will be considered a shady act, since there's no reason why peer to peer can become the mainstream trading route. There's the issue of escrow, and making it simple enough for people to use, and unfortunately I don't think multisig is the answer there due to the complexity that it adds to the transaction.

Ultimately, the only reason we tolerate, and don't learn our lessons about centralised exchanges is that they're by large very convenient due to the simplicity. It's one of the biggest questions you get asked by people who don't know about Bitcoin. "But, how easy is it to buy something with Bitcoin", which of course what they're actually asking is how easy is it to exchange, and turn into real (from their perspective) money. Centralised exchanges make it incredibly easy to do that within a few minutes.

However, peer to peer exchanges don't have that simplicity or speed. Unless, you've found a trusted seller, but even then you're likely ignoring certain security recommendations during the process. That's where we should be looking to develop, making peer to peer exchanges more convenient, and simple to use.

The only issue I see with peer to peer exchanges is governments not liking the idea of them, due to the fact that people could potentially money launder easily. Since, centralised exchanges will be reporting their books to the authorities, whereas peer to peer isn't doing that, it's down to each user to do that. Which of course, they/you should be doing, but the government will definitely see issue in the potential for people to cheat the system or go undetected more easily there.

[Oilacris]

Every day it seems a new story emerges about an exchange going bankrupt. Has been a recurring pattern since the Mt. Gox collapse. Why, with so many examples of failures, do people continue to keep their money on these? You don't own crypto if you have "coins" on an exchange, you have an IOU from a business that may or may not even be solvent.

Its been said for thousands or million times for sure that leaving coins on an exchange is never been safe but surprisingly which there are people whom do really leave out their funds on an exchange.

Some do even make it as their main wallet without even thinking up about the risks specially on these hacking incidents or other exchange issues that could possibly happen.There's no such thing about

100% safe when it comes to custodial platforms or things which we know that there's no way on recovering your funds once they do experience some problems.
I know its hassle to make out active deposit and withdrawals on exchanges but as able as you could then it would be always that recommendable.

[Ultegra134]

Well, we tend to believe or hope that it won't happen to us. In my opinion, we use exchanges out of comfort. They are relatively simple to set up and provide you with a wide range of capabilities.Exchanges such as Binance or CEX.io go as far as having investment plans, staking functions, and saving functions. On the one hand, I feel relatively safe on Binance; however, everyone is guilty until proven innocent. You never know what might happen to the exchange, but even if Binance went bankrupt, which is unlikely, it would have a huge impact on cryptocurrencies.

From what I've understood, can someone be absolutely safe? I'm storing bitcoin on my computer through Electrum; how safe am I? How can you store cryptocurrencies when using DeFi projects and being involved in staking? Metamask doesn't look too safe to me.

binance has their SAFU in place. so if anything happens, you have your insurance. don't know if FTX has that kind of feature. but in any case, we should not really store our funds in CEXs. however, if you are staking or availing the savings feature, i am more confident to use binance services. but in this market, we really don't know what will happen next, even top crypto-exchange like FTX can go bankrupt without a warning.

That's something I actually didn't know. I guess having funds on Binance is safe-ish? However, quite a few members will disagree with that statement. Honestly, exchanges are much more versatile and user-friendly; Binance offers a mobile app and even a debit card. It's generally a great option, not only for beginners but also for experienced users.

I'm using Binance's savings and staking services, and while I'm planning to move to a decentralized platform, I find the whole concept of being able to trade crypto and invest it at the same time quite convenient.

[pixie85]

Every day it seems a new story emerges about an exchange going bankrupt. Has been a recurring pattern since the Mt. Gox collapse. Why, with so many examples of failures, do people continue to keep their money on these? You don't own crypto if you have "coins" on an exchange, you have an IOU from a business that may or may not even be solvent.

People never learn because they think that after it has happened, it never happens again or it doesn't repeat itself. They refuse to learn from people's experience. No matter how reputable an exchange seems, like they can never go bankrupt or be victims of hack, people who have not learnt this lesson should learn it never to keep their coins in an exchange when there are cold storages and safer places for them.

It always happens again and again. Sometimes the loss is covered, sometimes it's not but most exchanges have their problems from time to time. You don't want to leave your money and ultimately your future in the hands of some random dude even if it's the "mighty" CZ.

People will never learn because there's more crypto users every year and those newcomers will once again repeat the same mistakes.

You can check my post from a year ago where I said that the biggest risk of trading is the fact that you have to hold money on an exchange.
https://bitcointalk.org/index.php?topic=5348828.msg57451823#msg57451823

A year later and one of the biggest exchanges implodes.

[MoonOfLife]

Every day it seems a new story emerges about an exchange going bankrupt. Has been a recurring pattern since the Mt. Gox collapse. Why, with so many examples of failures, do people continue to keep their money on these? You don't own crypto if you have "coins" on an exchange, you have an IOU from a business that may or may not even be solvent.

Once it's centralized nothing is safe but we can't stop using it, if you make profit from trading how will you profit if you don't use centralized exchange. Once invested means we take risks, so no matter how many exchanges fail, I believe we will never eliminate our reliance on them.