Don't trust web wallets, don't trust exchanges, then where to trade?

[shield132]

Not your keys - not your coins, that's 100% true but for some people, I would say: Even your keys - not your coins.

Okay, woud love to hear opinion about this from the community members.

As we know and from every logic, we shouldn't trust web wallets and also exchanges. There were a lot of accidents when exchanges were hacked and people lost their coins. Some may say - don't keep your coins at exchanges for a long time but I would say that everything happens in seconds, maybe you had access on your coins at exchanges while you were replying to this thread but once you submitted the post, exchange got hacked and coins were lost, everything happens in seconds, otherwise loss wouldn't occur.

So, how do you trade in these cases? Only p2p exchanges? But it's not flexible and you may miss a good time frames where you could profit 1-2% of your balance.

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[ololajulo]

Not your keys - not your coins, that's 100% true but for some people, I would say: Even your keys - not your coins.

Okay, woud love to hear opinion about this from the community members.

As we know and from every logic, we shouldn't trust web wallets and also exchanges. There were a lot of accidents when exchanges were hacked and people lost their coins. Some may say - don't keep your coins at exchanges for a long time but I would say that everything happens in seconds, maybe you had access on your coins at exchanges while you were replying to this thread but once you submitted the post, exchange got hacked and coins were lost, everything happens in seconds, otherwise loss wouldn't occur.

So, how do you trade in these cases? Only p2p exchanges? But it's not flexible and you may miss a good time frames where you could profit 1-2% of your balance.

The advice on keeping coin only on private wallet had declined although exchanges are not the safest but the exchanges had give traders confidence with recent hack that protect traders fund while exchanges cater for the damages. The recent development in trade on DEX through token swap (UNISWAP etc.) had been efficient with wallet security except the traders are careless with their private keys. 

[Yogee]

Atomic swaps are becoming more popular and we may see greater volume soon on these exchanges with all the crypto regulations forced on centralized exchanges.

You can check https://www.xlitewallet.com/ It supports BTC, DASH, LTC, DOGE, SYS, BLOCK, and PIVX. It claims to have no centralized servers and secured by decentralized service nodes. The design also looks fine based on the images from the site.

[joniboini]

Separate your funds into multiple baskets, one of them for trading. Be prepared to lost everything. Deposit to "reputable" exchanges, make your trades, withdraw your profit regularly. If the exchange starts to be a pain in the ass, move to another platform.

If you're not a trader and just want to exchange Bitcoin for fiat, use P2P. If there's a local exchange in your country and it is somewhat decent, use them but don't store your Bitcoin. Only deposit if you want to exchange. That's how I do it at least, and so far fortunately there's no problem.

[Marvelman]

I never really trust an exchange. You don't know if they're going to crash and lose your money, you don't know if they're going to go out of business, or if they have a sudden inexplicable bug in their system. P2P trading with other people is the safest way to trade, imho.

[mk4]

It's not that you shouldn't be using exchanges per se, it's just that you shouldn't leave your entire holdings on exchanges(which surprisingly a lot of people still do). If you trade with like 5% of your total holdings, then only leave that 5% on exchanges. And just withdraw the funds when you plan on stopping trading for a while and such.

[bL4nkcode]

These lines are only applicable when people stores funds to exchanges and custodial wallets.

When day trading, trader should accept those risks, and even use multiple exchange to diversify and reduce these risks. Only use trusted platform with insurance or I guess some regulatory function as well.

[mersal]

So, how do you trade in these cases? Only p2p exchanges? But it's not flexible and you may miss a good time frames where you could profit 1-2% of your balance.

Use exchange for trading not for storing that is the actual content of not your keys, not your cryptos. But if we are going to stop the centralized exchanges then you will lose profits as a trader so you have to accept such risk that exchanges can be hacked at any time. So just move funds to your wallet if you are not going to trade in the near future.

For example, you are trading at Binance and the exchanges got hacked where you had few thousands worth of cryptos but the exchange itself claim that all the users funds were protected by SAFU which means the exchange will take the responsibility for the hack and they will pay the users from their pockets.

[shield132]

It's not that you shouldn't be using exchanges per se, it's just that you shouldn't leave your entire holdings on exchanges(which surprisingly a lot of people still do). If you trade with like 5% of your total holdings, then only leave that 5% on exchanges. And just withdraw the funds when you plan on stopping trading for a while and such.

No one knows when exchange will be hacked, even if you risk and leave funds on exchange for some hours, there is a chance that it will be hacked and your funds will be stolen. And if you deposit/withdraw money on each trade, I hugely doubt you'll get any profit because nowadays there are a huge fees on transaction and everytime I opened my Electrum wallet, it was always warning me that fee was very high. Paying 5% of your initial capital in bitcoin transaction fees can't bring you a profit in trading. That's why I asked what to do and if you trade with 5% of your total holdings, even if you have high capital, it will be just a waste of time and playing for nothing.

[mk4]

No one knows when exchange will be hacked, even if you risk and leave funds on exchange for some hours, there is a chance that it will be hacked and your funds will be stolen.

I mean, obviously. It's a risk you need to take if you actually want to take advantage of the liquidity of centralized exchanges. If you don't want to risk it, pretty simple- don't trade.

And if you deposit/withdraw money on each trade, I hugely doubt you'll get any profit because nowadays there are a huge fees on transaction

Never said you had to withdraw after literally every trade. I said "just withdraw the funds when you plan on stopping trading for a while and such".

and everytime I opened my Electrum wallet, it was always warning me that fee was very high. Paying 5% of your initial capital in bitcoin transaction fees can't bring you a profit in trading.

If you only trade with a $50 trading allocation, then sure.

That's why I asked what to do and if you trade with 5% of your total holdings, even if you have high capital, it will be just a waste of time and playing for nothing.

Lol not really. It's only a waste of time if you don't make enough money trading to pay for the transaction fees.

[sheenshane]

No one knows when exchange will be hacked, even if you risk and leave funds on exchange for some hours, there is a chance that it will be hacked and your funds will be stolen.

This is the reason why we should choose a good and reliable exchange to trade, if you're deciding to trade, you must know those consequences waiting ahead and risk is a part of it.  Upon choosing to exchange and deposit your fund as capital, it means you already trusted them for any cost, for better and for worst.  

How many exchanges offer this service? (SAFU) Secure Asset Fund for Users , I think this will have a guarantee to traders to have a safe fund, but it doesn't mean, leave your fund and let sleep on the exchange.  After trading, don't leave your fund on an exchange platform that you have used, if you will see net profit was there and already covered by the withdrawal fees, you can withdraw them all.

So basically, we shouldn't leave fund on CEXs and custodial wallet, the line that you've used, Not your key, Not your coin is a great warning to all newbies who wanted to join the crypto space.

[Ultegra134]

Not your keys - not your coins, that's 100% true but for some people, I would say: Even your keys - not your coins.

Okay, woud love to hear opinion about this from the community members.

As we know and from every logic, we shouldn't trust web wallets and also exchanges. There were a lot of accidents when exchanges were hacked and people lost their coins. Some may say - don't keep your coins at exchanges for a long time but I would say that everything happens in seconds, maybe you had access on your coins at exchanges while you were replying to this thread but once you submitted the post, exchange got hacked and coins were lost, everything happens in seconds, otherwise loss wouldn't occur.

So, how do you trade in these cases? Only p2p exchanges? But it's not flexible and you may miss a good time frames where you could profit 1-2% of your balance.

I've also had the same question as you. I've been hearing not to hold coins (Or even Fiat balance) in exchanges, for safety concerns, I don't see how you can actually do that. Not only that, but I find it a waste of time and money to have both your balance and your coins transferred all the time.

I've always used online wallets in the past (BitGo and Blockchain) and never had any issues. Currently, I have some money on an exchange and some Bitcoin, I keep investing/trading both, back and forth throughout the week, I don't see how I could actually keep them "offline". I think, that if you are using reputable sites, don't sign up on any stupid phising or scam sites, use 2FA, you'll be good to go. I might be wrong though, that's just my 2 cents.

[KaratX]

Web wallets are a big No for me, not your keys not your coins , it's as simple as that, the reason why people could warn you not to trust exchanges is never to leave your assets on them, hacks isn't going to warn you when coming, it can happen at anything so they are right, trade on top exchanges and move your funds back into your wallet

[shield132]

That's why I asked what to do and if you trade with 5% of your total holdings, even if you have high capital, it will be just a waste of time and playing for nothing.

Lol not really. It's only a waste of time if you don't make enough money trading to pay for the transaction fees.

Wanted to transfer 0.7 Bitcoin and electrum wallet was warning me that the recommended fee would be higher than 5.7% of the initial amount. I guess 5% of 0.7 bitcoin isn't small and it's a pretty good profit in USD if we consider the amount. I think it's illogical to pay that much fees and some exchanges somehow don't accept SegWit transfers (that's another embarrassment). The idea of this thread is not to push people to leave their funds on exchanges. I just want to find the "Golden Ratio" (sweet spot).

Yogee
Atomic swap sounds well, I'll have a look at it, thanks.

[Oceat]

Web wallets are a big No for me, not your keys not your coins , it's as simple as that, the reason why people could warn you not to trust exchanges is never to leave your assets on them, hacks isn't going to warn you when coming, it can happen at anything so they are right, trade on top exchanges and move your funds back into your wallet

But that's a bit of a hassle if you'd ask me since moving from exchange to your cold storage will require some fee and especially this time when the transaction fees are quite high. I might want the idea of not putting everything on a single exchange, meaning you put something on an exchange for trading purposes only and if done, send the profit to your cold storage then repeat what's left on the exchange you are trading. How would you handle yours?

[notblox1]

You can use exchanges for trading but don't trust them for holding and keeping all your coins, and if you want to accept that risk than don't complain later.
There are some decentralized exchanges allowing you to have your own keys and still trade so you have some compromise, more security and lower volume.
I am sure there will be some better and groundbreaking dex solutions in future but we can use what we have for now.
 

[Yogee]

Atomic swaps are becoming more popular and we may see greater volume soon on these exchanges with all the crypto regulations forced on centralized exchanges.

While atomic swap let you have control over your coin, it's not viable option for trader who aim for small profit due to fee of on-chain transaction.

It has to depend on the coin pairs. BTC has the most expensive transaction fee from the coins supported by xlitewallet. The fees for the other coins are cheaper and should be manageable for any trader.

.....
Yogee
Atomic swap sounds well, I'll have a look at it, thanks.

You're welcome. Do give us a feedback.

[sunsilk]

P2P is the other option if you don't want to trade on exchanges but it's not always you'll have that convenient trade through that type of trading. We can use exchanges and basically you will have to if you want to trade bitcoin and convert it to another crypto that you may want to hold. But just as everyone is saying, it's just about not keeping all of them there.

You have to understand the risk that it has upon using a centralized exchange but if you have plans of trading, there's always that huge liquidity on those exchanges that you have to choose. But if it's just holding, I agree that don't use them until you plan to sell.

[Maus0728]

As we know and from every logic, we shouldn't trust web wallets and also exchanges. There were a lot of accidents when exchanges were hacked and people lost their coins. Some may say - don't keep your coins at exchanges for a long time but I would say that everything happens in seconds, maybe you had access on your coins at exchanges while you were replying to this thread but once you submitted the post, exchange got hacked and coins were lost, everything happens in seconds, otherwise loss wouldn't occur.

It is an often reminder to all of newbie and even onto intermediate/expert traders that you must only trade and/or engage in trading if the money or capital you would spend in it would not be all of your money or the money that you cannot afford to lose. Every time that someone asks me where to trade, how to trade, etc., I often tell them that they should only trade if they could take the risk of losing their money. With that being said, there's no real fine line that one must trust any wallets nor any exchanges at all. Even I myself still holds money on some exchanges, not to the fact that I trust those exchanges and their system, but for a reason that I already set myself and my mindset that whatever happens, it would be fine to lose those money.

Hence, whatever your trust issues with wallets and exchanges are, always keep in mind that engaging/trading with crypto remains to be a huge risk to take. Yet, it would always depend on how much risk you can take and if you are willing to take a leap of faith.

[Ridwan Fauzi]

Indeed, that is true, there may a few exchange who still clean from hacked event. But, that is not a guarantee that the exchange has a high security until the hacker tire to hack it. They still have a chance to be hacked, maybe that is the matter of time.

But, I'm a trader it means I need to put my money in the exchange, it is impossible to pull my money in the exchange frequently. I only withdraw all of my fund once a week when I get a profit from my day trade at least it will make me comfortable. More than that, I use binance exchange which is trusted until now, they will be responsible to change my fund when something bad happen.