are crypto owners naturally paranoid?

[krusepig]

It seems to me that it would be safer (and more convenient) to keep your crypto on an exchange (coinbase, blockfi etc) than cold wallet. Wouldn't the odds be greater that you mess up your cold storage than a large exchange being hacked or whatever (even if they are hacked, that wouldn't necessarily mean you would lose any coins, whereas if you are hacked that's a different story). I ordered a ledger nano X but it seems that the exchanges are still the way to go based on probabilities. What are your thoughts?

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[yazher]

It happens on Binance before where some of the users lost their coins due to the hacking activity but they managed to track the hacker. you can find it here: https://portswigger.net/daily-swig/binance-awards-200-000-bounty-after-cyber-attackers-indicted-in-us

Due to this kind of incident, it is mandatory for people who hold huge amounts of crypto currencies to own a ledger to keep their crypto-asset personally without worrying about the exchanges they usually used to be hacked.

Therefore, no one really gets paranoid if they have their own hard wallet where they can control their crypto assets freely.

[Poker Player]

It seems to me that it would be safer (and more convenient) to keep your crypto on an exchange (coinbase, blockfi etc) than cold wallet. Wouldn't the odds be greater that you mess up your cold storage than a large exchange being hacked or whatever (even if they are hacked, that wouldn't necessarily mean you would lose any coins, whereas if you are hacked that's a different story). I ordered a ledger nano X but it seems that the exchanges are still the way to go based on probabilities. What are your thoughts?

You sound like someone who has a lot of opinions about crypto but don't hold much crypto yourself.

Bitcoin owners who take a lot of precautionary measures have so much Bitcoin that you can't even imagine. People who have 10, 100 or 1,000 bitcoins are not stupid, and as they are not stupid they do not leave what is theirs in the hands of third parties, besides not having everything in one cold storage. The normal thing is to have it in several and the keys well stored and in different places, besides using multisig, etc.

If you have $100 in Bitcoin or crypto, it's OK to leave it in an exchange, but as you get more and more and learn the meaning of "not your keys..." you start to take more security measures, and that has nothing to do with being paranoid, but rather with being smart.

[rhomelmabini]

It seems to me that it would be safer (and more convenient) to keep your crypto on an exchange (coinbase, blockfi etc) than cold wallet. Wouldn't the odds be greater that you mess up your cold storage than a large exchange being hacked or whatever (even if they are hacked, that wouldn't necessarily mean you would lose any coins, whereas if you are hacked that's a different story). I ordered a ledger nano X but it seems that the exchanges are still the way to go based on probabilities. What are your thoughts?

A third party wallet wouldn't be safer than the wallet you really hold, of course it's your responsibility and strategy on how to manage it properly. Just because the funds are SAFU? It's a great responsibility holding your own asset and as I said, keep it somewhere safe, change password/code regularly and other precautionary measures on safety of your asset. I wonder and wanted to know on what are those probabilities, mind you lay it here?

[lovesmayfamilis]

You will become paranoid if you trust your bitcoins to an exchange. Just try it, but it doesn't have to be a small amount. Above there was already a very competent answer, are you ready to trust your money to someone if there are good ways to store it?
The only thing you need is knowledge of storing your passwords. There is a good proverb: "if you want to do well, do it yourself." There is nothing better than to rely on and always trust only yourself.

[noormcs5]

It seems to me that it would be safer (and more convenient) to keep your crypto on an exchange (coinbase, blockfi etc) than cold wallet. Wouldn't the odds be greater that you mess up your cold storage than a large exchange being hacked or whatever (even if they are hacked, that wouldn't necessarily mean you would lose any coins, whereas if you are hacked that's a different story). I ordered a ledger nano X but it seems that the exchanges are still the way to go based on probabilities. What are your thoughts?

So you prefer convenient over security ? The exchanges can run away with your funds and you cannot do anything about it.
However if you have a hardware wallet and you messed up its security key or passphrase, then again you will lose your funds. If you are that careless with your money, i am afraid you will sooner of later lose your coins.

[DannyHamilton]

If you don't have exclusive control of the private key associated with a bitcoin address, then you don't have the bitcoins that are associated with that address.
(frequently paraphrased as "Not your keys, not your bitcoin")

If you keep your bitcoins on an exchange, then you are donating your bitcoins to some other people in exchange for a promise from them that they will send an equal amount of THEIR coins wherever you ask them to whenever you ask them to.  It's up to you how much faith you want to put into that promise. I prefer to have actual bitcoins instead of promises.

Can exchanges be hacked? Can they get shut down or disappear?  Perhaps try asking those that had coins at MtGox.

[stompix]

It seems to me that it would be safer (and more convenient) to keep your crypto on an exchange (coinbase, blockfi etc) than cold wallet.

More convenient yes, safer, no!

Wouldn't the odds be greater that you mess up your cold storage than a large exchange being hacked or whatever (

If you think you can mess your own cold storage by doing something wrong, then it's highly possible you can get a virus on your laptop/mobile, you can have your email hacked, you can be a victim of sim swapping, and many more which would completely invalidate any claims you could do to the exchange or wallet provider. Besides that, how many times have exchanges just disappeared or a "hack" has left them bankrupt? Do you honestly believe in the SAFU buzzword? If Binance's cold wallets are emptied there is no way in hell anyone would get even one-tenth of what they have, there is real insurance other than some man's word.

And that's not all, forget hacks and malware and password stealing.
The exchange might decide that the picture of your ID is a bit fishy or that you've sent tainted coins and they freeze your account until you come with a complete history of your coins and proof of how you earned the money to buy them. My ledger never asked me this, nor does it care about

[mk4]

Cryptocurrency owners are mostly just one of the two:

Risk takers: obviously, bitcoin and cryptocurrencies are a new concept, with higher levels of risk compared to traditional assets, but with higher potential reward.
Ignorant: yea, those people who think their crypto of choice is guaranteed to go to the moon or something.

As for hardware wallet users, yea you can probably make the assumption that they're paranoid, but it's mostly just them being smart. Because they've learned about people's mistakes in the past(MtGox, Bitfinex, etc), and they wouldn't want it to happen to them.

And if you think storing your coins on exchanges is safer: https://cryptosec.info/exchange-hacks

[mitchr4]

In fact, I will feel paranoid if keep money in the exchange. There will always be problems faced and vulnerable to being hacked from outside or inside the exchange. I prefer to use a cold wallet because it is safe and we can control the address.

[Lucius]

It seems to me that it would be safer (and more convenient) to keep your crypto on an exchange (coinbase, blockfi etc) than cold wallet.

For some people, this may indeed be a safer option if we consider that all the user needs is a username and password, and to be careful about phishing, with the hope that the exchange will not be hacked or that the owner(s) will not disappear/die and take everything into the unknown. However, a properly made cold wallet is still the safest, but it should be noted that hardware wallets do not fall into this category - you will still need to connect them to the Internet from time to time.

Wouldn't the odds be greater that you mess up your cold storage than a large exchange being hacked or whatever (even if they are hacked, that wouldn't necessarily mean you would lose any coins, whereas if you are hacked that's a different story). I ordered a ledger nano X but it seems that the exchanges are still the way to go based on probabilities. What are your thoughts?

Mess up with a cold wallet? You can hardly do this if you are sufficiently informed, which leads us to the conclusion that any type of crypto wallet is not resistant to human stupidity - and now the only question remains whether a user will click on the phishing link or save their seed online (e-mail, cloud) and be hacked. As other members have already mentioned, Bitcoin isn't really yours if you don't have full control over your private keys - so I wouldn't even ask if one option is more secure than the other, but what is the correct storage method and what isn't.

[Luzin]

It seems to me that it would be safer (and more convenient) to keep your crypto on an exchange (coinbase, blockfi etc) than cold wallet. Wouldn't the odds be greater that you mess up your cold storage than a large exchange being hacked or whatever (even if they are hacked, that wouldn't necessarily mean you would lose any coins, whereas if you are hacked that's a different story). I ordered a ledger nano X but it seems that the exchanges are still the way to go based on probabilities. What are your thoughts?

I think all have a sense of worry, but at least don't make them up to severe fear.  If comparing Exchange wallets and Offline wallets as you mentioned Ledger Nano of course I choose to save in Ledger Nano. At least Ledger will make the wallet a little secure, because not every time connected to the internet and can be accessed by anyone at any time. Although I believe exhange wallet has also provided protection to its users, through GA, or AUTY. I think at the end of the day there's no need to be paranoid, you're just pretty careful.

[pawanjain]

It seems to me that it would be safer (and more convenient) to keep your crypto on an exchange (coinbase, blockfi etc) than cold wallet. Wouldn't the odds be greater that you mess up your cold storage than a large exchange being hacked or whatever (even if they are hacked, that wouldn't necessarily mean you would lose any coins, whereas if you are hacked that's a different story). I ordered a ledger nano X but it seems that the exchanges are still the way to go based on probabilities. What are your thoughts?

LMAO, that's a nice question and I think yes, crypto owners are indeed paranoid. Atleast the ones that I know are all as paranoid as me or may be more but not less.

Even if I would hold 0.001 BTC, I will prefer to hold it in a non-custodial wallet rather than on an exchange.
My wallet my coins. No wallet no coins. I just made that up and it makes sense 

[glendall]

from the previous cases i will learnd , it's better for me to store my bitcoins in a personal wallet than a third party, to be honest with the previous incident that made me paranoid about famous exchanges, because it would be the target of hackers,
I swear I'd go crazy if that happened to me

[uneng]

If you just want to store your coins a cold wallet is the best choice, because this way you have the assurance your money will be untouchable for how long you want. And I don't think there is a serious risk of messing everything up. You just need to be responsible and store your keys in a safe decent place. When you buy the physical wallet the company send you everything you need to keep the informations needed to access the device organized.

But since you mentioned blockfi, I suppose it's more convenient to deposit your funds in different online platforms, so your coins won't stay "idle". They will generate passive income while you don't use it.

[ChiBitCTy]

No no and no, leaving your cryptocurrency on an exchange is the last place you want to leave it.  In regards to your question "are crypto owners naturally paranoid"..I would probably say no.  Most of crypto owners, just like most people, are inherently stupid..if we are being honest.  Most crypto owners don't do their homework or don't want to listen to good advice so they aren't as paranoid as they should be.

[BlackHatCoiner]

It seems to me that it would be safer (and more convenient) to keep your crypto on an exchange (coinbase, blockfi etc) than cold wallet.

It's not safe neither convenient.

First off, let's define what's a cold wallet. It's money you want to spend in the far future, when the asset you're holding will be more appreciated than currently. When you give your bitcoins to the exchange, you're actually handing out your asset to receive liability which is considered a poor move.

Really, how can you be so sure that the exchange you've deposited your future won't shut down or get hacked within the next years? How can you feel more convenient knowing that others have your money? Don't you prefer to just write down a seed phrase and sleep easy knowing that only you're able to touch those coins?

That's the reason we have Bitcoin BTW.

[kryptqnick]

It seems to me that it would be safer (and more convenient) to keep your crypto on an exchange (coinbase, blockfi etc) than cold wallet. Wouldn't the odds be greater that you mess up your cold storage than a large exchange being hacked or whatever (even if they are hacked, that wouldn't necessarily mean you would lose any coins, whereas if you are hacked that's a different story). I ordered a ledger nano X but it seems that the exchanges are still the way to go based on probabilities. What are your thoughts?

I'm sure many won't support this view, but I actually thought about it once. If an exchange is highly reputable, the money might be safer there. For instance, Binance was hacked, but it gave all the stolen money back to customers. If you somehow have your wallet compromised, nobody will do that. But if you mean messing up your cold storage in the sense of accidentally putting it in water or anything, it won't kill your money. As long as you have your passphrase, you can recover the money. If you mean losing your passphrase, it's a different thing, but you can store it in multiple places to ensure that you don't lose it. Also, while Binance has shown that it returns money to customers, they also imposed KYC now, and who knows what else they'll require over the years. So it's not like it's without its huge disadvantages. Not to mention that they might perform an exit scam or be terribly hacked at some point after all.

[Ucy]

I guess being "paranoid" is why we have Bitcoin in the first. I wonder if those who trust the system so much will be able to create something as revolutionary and secure (secure, by the world standard) as Bitcoin.


By the way, I think it's better to have the keys inscribed on hard objects and buried in multiple places you can remember, than having them controlled by centralized exchanges.  
I hope people also realize the need to control their private/sensitive data in similar manner .

[adzino]

It seems to me that it would be safer (and more convenient) to keep your crypto on an exchange (coinbase, blockfi etc) than cold wallet. Wouldn't the odds be greater that you mess up your cold storage than a large exchange being hacked or whatever (even if they are hacked, that wouldn't necessarily mean you would lose any coins, whereas if you are hacked that's a different story). I ordered a ledger nano X but it seems that the exchanges are still the way to go based on probabilities. What are your thoughts?

They are not being paranoid. If you own a large number of coins that's worth hundred thousands of dollars, you wouldn't want to hold it in an exchange. There is a probability that the exchange might get hacked. There is a chance the exchange might confiscate your funds even if you have done nothing. There is a chance that the exchange might freeze your funds because someone else did something and they somehow linked you into it. The coins you store in the exchange aren't yours. Not your keys, not your coins. If you hold the funds in a cold storage that you own, none of the above will happen other than getting scammed.