Another (same old) reason to avoid centralized exchanges

[Upgrade00]

Earlier today Binance announced on Twitter that they were disabling Bitcoin withdrawals on their platform due to "backlog", this started a roller coaster ride where it was resumed with a clause that there would be a delay, closed again and finally fully opened back up;


To users of centralized exchanges, this is not major news. Exchanges can limit withdrawals, block accounts etc, for whatever reason they deem fit and one would be prevented from using their funds deposited there.
In the spirit of customer satisfaction exchanges try to avoid doing those often, but it's still a major issue, along with how personal information can be misused or stolen.

Not your keys, Not your coins!
Bitcoin was designed so no third party would have any sort of control over your funds and it operates without an intermediary.
The best solution would be to use actual non KYC exchanges which are decentralized, or if you already use a centralized exchange: do not store funds there, only pass them through (deposits and withdrawals).

[jackg]

You can always distribute exchange holdings if you're wanting to feel more secure also but don't trust yourself with bitcoin/other cryptos yet (especially for newbies).

There's a point in storing as much as you're competent to store on your own, a lot of money in an exchange is likely more secure than a lot of money in a Web wallet or even, in some cases, on a desktop one.

(obviously the best solution is to get a hardware wallet (airgapping or otherwise) and/or making your systems. More secure and yourself less susceptible to attacks - stop downloading random freeware).

[NeuroticFish]

due to "backlog"

I find this funny. I guess that they're extensively logging users' every step if the logs have became too big to handle 
I guess that the logs filled up some disk space that was shared with other services involved in withdrawals - I don't exclude an instance of bitcoin core either.

Not your keys, Not your coins!

If people would go more by this and would keep at exchanges only small funds for short time, they would not freak out for every announcement like this. I wish to see those days...

[Upgrade00]

There's a point in storing as much as you're competent to store on your own, a lot of money in an exchange is likely more secure than a lot of money in a Web wallet or even, in some cases, on a desktop one.

Webwallets are generally not a good option to store bitcoins, a desktop wallet is better but still poses a significant risk if the desktop is regularly used.
Also, your account on an exchange is only as secure as you can keep it, if you are not competent to secure your passwords and email, you can still loss your funds.

If people would go more by this and would keep at exchanges only small funds for short time, they would not freak out for every announcement like this. I wish to see those days...

It seems such a day is becoming less likely; more crypto users are getting comfortable using centralized exchanges which takes away the responsibility of building their funds themselves, at the cost of their privacy.

[mk4]

If you absolutely need to use an exchange, like for day trading, probably Binance isn't the best choice even if it's the biggest. Since you're going to submit AML/KYC anyway, probably use the ones that seems to not be continuously pursued by authorities. Binance is simply one of those exchanges that I won't be surprised if they managed to piss off most regulators lol.

[Pmalek]

...or if you already use a centralized exchange: do not store funds there, only pass them through (deposits and withdrawals).

That's the way those platforms are supposed to be used hence the name "exchange". Unfortunately, too many people who can't bother to spend some time to create safer crypto storage options use them as wallets for their coins. When something bad happens, than it's everyone else's fault, crypto and bitcoin sucks, and the whole movement is a scam.

...a lot of money in an exchange is likely more secure than a lot of money in a Web wallet or even, in some cases, on a desktop one.

Keeping your coins in a web wallet is equally bad as storing them on an exchange if you ask me. An open-source and non-custodial desktop wallet with a proven track record that is installed on a malware-free computer is clearly a better option.

Binance is simply one of those exchanges that I won't be surprised if they managed to piss off most regulators lol.

That's for sure. I don't think they are happy with the restrictions they were forced to place on their customer's accounts. But they were pushed into a corner and simply have to comply. Now it's a gamble who will be the next exchange to face a similar fate.

[Porfirii]

But hodling your coins in a centralised exchange you can get some interest for your coins. Is there any solution to this? I mean, somewhere else you can put your coins and get interest for them (BTC or less than 32 ETH). You can stake other coins like ICON, BAND or ZILLIQA, while keeping your keys, in Atomic Wallet for example and I wonder if there is something similar for Bitcoin.

[TheNineClub]

The thing is, exchanges like that make it easier to do transactions on the fly, so that is a reasonable reason why people are holding money on it, but it's interesting how, at the end of the day, no decentralization can work without some amount of centralization. Maybe it has to be that way, but also maybe we can find some way to flip everything back to decentralised.

[Bitcoin_Arena]

Binance lost it a long time ago. I see people complaining about the exchange freezing and having their positions liquidated as a result of not being able to put stop loss orders. A wise trader would avoid Binance and look for budding but reputable exchanges.

Also, Never use an exchange as your wallet. Anything can happen.

[CryptopreneurBrainboss]

But hodling your coins in a centralised exchange you can get some interest for your coins. Is there any solution to this? I mean, somewhere else you can put your coins and get interest for them (BTC or less than 32 ETH). You can stake other coins like ICON, BAND or ZILLIQA, while keeping your keys, in Atomic Wallet for example and I wonder if there is something similar for Bitcoin.

How much is the interest, ask yourself that question and evaluate if it's worth the risk of losing your coin for them. What if the exchange gets hacked and there's nothing they can do to refund their customers immediately and causes them some loss when they finally do assumptions they do and not exist scam.

When you think about it, by just holding Bitcoin in your private wallet and maybe some of those altcoins, already gives you an interest as your initial investment tends to increase over time providing the value of the coins increase in the market.

Exchanges offers this different packages just to get hold of your Bitcoin that's to tell you how valuable they're. Also you tend to get the feeling of selling during fud if your coins are on exchange therefore to minimize that, you're better off getting them off exchanges.

[tvplus006]

...do not store funds there, only pass them through (deposits and withdrawals).

If you are engaged in trading on the stock exchange, then such an option as the constant movement of coins from the exchange to the wallet and vice versa is not a solution to the problem. The only solution to the problem that will reduce the risks is to keep exactly as many coins on the exchange as you need to trade.

[noorman0]

Centralized ones are usually designed to be as attractive as possible and will be improved because their features are flexible. DEX is also not the best choice for active traders because it is not cost efficient.

CEX is still superior in some ways, I wouldn't argue with those who use it, especially for trading reasons (I personally can't avoid it). CEX is just not good for storing large amounts and long term, staking is included in this. Even if you see their number increase, you can't do anything when their value decreases.

[n0nce]

The thing is, exchanges like that make it easier to do transactions on the fly, so that is a reasonable reason why people are holding money on it, but it's interesting how, at the end of the day, no decentralization can work without some amount of centralization. Maybe it has to be that way, but also maybe we can find some way to flip everything back to decentralised.

That's not true at all. Sending funds from an exchange account to somewhere else costs way more than what you'd pay when using your own wallet. Usually for Bitcoin, they charge around $5-10 per transaction, while on most days we can send with real wallets for around $0.08 per transaction. It's also faster, since when you send from an exchange account (withdrawing), they usually batch them and you may have to wait for a while until they aggregate enough transactions to submit.

It's also completely wrong that decentralization can't work without some amount of centralization. You can easily buy your Bitcoin on decentralized exchanges like https://bisq.network/, send the funds to a hardware wallet and there you go; all decentralized, easy, cheap and anonymous.

[cryptoaddictchie]

But hodling your coins in a centralised exchange you can get some interest for your coins.

This is a perks of staking on some centralized exchange like binance which absent on a personal wallet but in return those hassle withdrawal limit. Its up to you, to accept such consequence and perks.

A wise trader would avoid Binance and look for budding but reputable exchanges.

I only used Binance for trading some major coins especially those who aren't erc20 and any l1 metamask package tokens. I have coins which have different chain that isn't present on some exchange or likely I don't trust some of the platform offering trading. Been binance users for a long time, and indeed no problem at all but minor issues which I could understand. So to say I'm not a wise trader? I don't think so, it depends on someone preference how they could handle such risk or factor.

[bittraffic]

The trading volume is what big traders need on Binance, if they keep doing this these traders will move to another or perhaps on DEX which is probably the reason why the volume on Dydx, Unisawp and Pancake getting higher.

If cryptopia had made it very difficult for us to claim our coins, so can binance. And there is nothing we can do unless you have withdrawn your coins already.

[blatchcorn]

Bitcoin was never designed for centralised exchanges,  if you are going to deposit your coins to exchanges like binance then you need to be prepared for such things. My account was limited and I kyc was not approved on binance, they said someone else has attempted kyc with my ID ( wh is something impossible). It took me 3 complete days to fully activate my account.
P2P accounts are decentralized but they are prone to cyber stacks which are lesser in centralised exchanges.

[NeuroticFish]

Bitcoin was never designed for centralised exchanges,  if you are going to deposit your coins to exchanges like binance then you need to be prepared for such things. My account was limited and I kyc was not approved on binance, they said someone else has attempted kyc with my ID ( wh is something impossible). It took me 3 complete days to fully activate my account.
P2P accounts are decentralized but they are prone to cyber stacks which are lesser in centralised exchanges.

Bitcoin was designed to pay without any third party. As simple as that.
From here on everybody can make his own use case and everybody has to pay attention that the other party of the deal/transaction is not malicious/scammer.

It seems such a day is becoming less likely; more crypto users are getting comfortable using centralized exchanges which takes away the responsibility of building their funds themselves, at the cost of their privacy.

Unfortunately far too many have also proven that they cannot be careful with their keys, they cannot be careful with their funds, they cannot make any (financial) step without having support and insurance.

[dbc23]

In as much as we don't have much decentralized exchange and the few available aren't promoted just like the centralized exchanges this issues will keep arising. Exchanges implement most of this policies because they  know 70% crypto investor uses centralized exchange. If we can use more of decentralized exchange this challenge would be limited

[joker_josue]

A popular Portuguese saying says:
"Never put all the eggs in one basket."

This idea is valid, for eggs...  but also for all investments, whether in Bitcoin or not.
Therefore, you should never have a lot of money in exchanges, whether big or small.
Exchanges are for that very purpose, to exchange currencies. That's what they should be used for, and in that sense you should only have enough there to do that.

So, whether Binance or anyone else, we should only have the money we need there for our trades. It may be a high value, but never all you have.

[Bitcoin_Arena]

I only used Binance for trading some major coins especially those who aren't erc20 and any l1 metamask package tokens. I have coins which have different chain that isn't present on some exchange or likely I don't trust some of the platform offering trading. Been binance users for a long time, and indeed no problem at all but minor issues which I could understand. So to say I'm not a wise trader? I don't think so, it depends on someone preference how they could handle such risk or factor.

Hey, I haven't insulted any trader still using Binance and haven't been fucked up by them yet, if that's how you might have interpreted it. All I am saying is that it's about time traders who are aware of the direction things are headed in binance start looking past it.

For example, ask this chap how they feel about binance right now, and we are all sure what his response might be.