are crypto owners naturally paranoid?

[skarais]

OP, not your keys, not your bitcoin. The warning should not only be addressed to those who have large amount of bitcoin but to anyone who is concerned about the safety of the bitcoin they own regardless of the amount. If you are not a trader then you should never entrust your bitcoin to a third party (any exchange) as you never have full control over the bitcoin you deposit on the exchange. The potential for hacking will always be there for any exchange regardless of how secure their system is, you should start checking which exchange have been hacked in the past.

If you are buying bitcoin for long term investment purposes then get a secure wallet for them where you have a private key that gives you full access to your bitcoin stored on the blockchain. You should be fully aware of how valuable this asset is to hackers, so take precautions to keep it safe.

[godzillarekt007]

While they are less likely to lose your funds, they are more likely to be hacked. You gotta run the risk;reward simulation for yourself to see which is worth it. I think most who got into crypto, generally disliked the banks anyways. So it was a natural progression for us to hold our money. But who knows, that could change one day and in 10-15 years from now we could have crypto banks. Oh how that would be so backwards and would suck.

[ice18]

regarding this, I'm actually thinking the same thing. I would probably feel safer keeping my assets in popular markets like Binance, or Kucoin, because even if they get hacked, I'm pretty sure they'll replace it.

Very risky to trust exchanges for holding your coins for a long time, how can you be so sure that they can replace it immediately incase another hacked happened? This two exchanges already hacked before the most recent is from Kucoin, online exchanges are very vulnerable to hacking since they are holding huge amount of money, even if they are mostly updated from security features, if an inside job happened all you hard earned crypto will be lost and possible can't recover anymore and you cant do anything about it. 

[witcher_sense]

I totally disagree. From my point of view, self-custody of your own keys is not about being paranoid, it's rather about being a rational, self-sufficient, self-sovereign, financially responsible, independent, disciplined person. The other point is that exchanges, be they centralized or decentralized, aren't meant to be used as vaults or wallets, they are designed for making exchanges between individuals. Once an exchange is finished, there is no point (assume they are not active traders) for both parties to keep their funds on a platform any further. Okay, suppose they consider a particular exchange platform safer than, say, cold storage. Will it really be safer and more convenient? I don't think so. In the case you retain full control over your keys, you can always mitigate the risk of losing your keys by taking some precautions. For example, you can make multiple encrypted backups of your seed and store them in multiple media, locations, jurisdictions, or even planets. If one of your copies is lost or destroyed, you won't lose access to your funds. In the case you give up control over keys and hand your keys to an exchange, you become fully dependent on their decisions, which is both dangerous and antithetical to the nature of cryptocurrencies. In this case, there is no way you can mitigate the risk of losing keys because you don't have them in the first place.

[imteaz]

Of course most bitcoin holder having tough time, as price keep going up, they are in two mind, sale it or hold it. I know personally lots of people who hold bitcoin Sold while it hit 50k or 60k. Now you see most holders are institution or big company, who won most of the bitcoin. When I had bitcoin, I had so many sleepless nights.

[matjas]

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 cold wallet is definitely safer if you take percussion and store your seed in two different physical places that you know for sure are safe. I dont think Binance or any other exchange guaranties you your money back if they get hacked. If you do decide to trust exchanges more, then its better to spread your coins trough few exchanges with best reputation.

[jerry0]

Assuming you keep all your crypto is the most reputable exchanges... like coinbase or gemini and make sure your 2 factor authorization is not SMS and is google authenicator or authy, are there cases of your account getting hacked?


Now even if your phone was stolen or lost, as long as your iphone is locked with a passcode, then aren't your coins still going to be safe on coinbase or gemini though?  Thus if someone had access to your phone and its not locked and they see your google authenticator and authy, as long as they don't know what your coinbase/gemini username/password is... then its fine?  I know when i click on google authenticator on my phone, you see codes for coinbase/binance etc.


But the issue is if you lose your two factor authorization, how do you contact coinbase/gemini to fix the issue and get back your account?  Would having your passport and id documents be fine?  Or would you need your phone number tied to the account even though you use google authenticator or authy on it?

[Sled]

OP, not your keys, not your bitcoin. The warning should not only be addressed to those who have large amount of bitcoin but to anyone who is concerned about the safety of the bitcoin they own regardless of the amount. If you are not a trader then you should never entrust your bitcoin to a third party (any exchange) as you never have full control over the bitcoin you deposit on the exchange. The potential for hacking will always be there for any exchange regardless of how secure their system is, you should start checking which exchange have been hacked in the past.

If you are buying bitcoin for long term investment purposes then get a secure wallet for them where you have a private key that gives you full access to your bitcoin stored on the blockchain. You should be fully aware of how valuable this asset is to hackers, so take precautions to keep it safe.

But I'd rather advise not to trust this huge amount in the 3rd party. if we are aware of the hacking issues that have been rampant these days, it was a safety precaution not to use online wallets in keeping huge amounts but rather to have a hardware wallet for safety assurance.

"Not your Keys, Not you Bitcoin" is the thing we have to consider. And we have to keep in mind that there we become careless the more it attracts other people to take advantage of us. If we don't have the reason for keeping it on the exchanges aside from holding (not staking) that seems useless.

[TinaK]

<....>
"Not your Keys, Not you Bitcoin" is the thing we have to consider. And we have to keep in mind that there we become careless the more it attracts other people to take advantage of us. If we don't have the reason for keeping it on the exchanges aside from holding (not staking) that seems useless.

A common line that we usually heard.
Bitcoin or crypto has value and is considered valuable stuff to us, I don't blame people if they are being paranoid about keeping their private keys.
So it is not the best practice to store bitcoin on a exchange which you don't have your own keys.

Because we have heard different cases of bitcoin lost every month or weeks, though we had that news just don't being paranoid because there is maybe a chance that your bitcoin getting lost and the password maybe you forget.

[deadmousehat]

I am more paranoid when crypto is kept on exchanges. the risk of storing crypto on an exchange is higher than in a cold wallet. don't trust the exchange too much, they can freely steal your crypto and also risk being attacked by hackers.

[thepriceinsats]

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?

Hmm you make a good point, but I think it also depends when you got started pre-2015 you had to do your own thing really, it was only after 2017 did we see measures taken in my opinion for exchanges to consider the individuals and the security of their assets. That might have something to do with regulation coming about.

I still do not trust the majority of exchanges, not just because of data, but also because of fees. Utilising my own wallet gives me a little more control.   

[LogitechMouse]

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?

Many will disagree with what you said and I'm one of them.
I respect your opinion though regarding which is better in terms of storing your crypto coins.

At first place, why would you hold a huge amount of coins if you don't know how to handle it yourself? It isn't a requirement but it would be better (at least for me) if you know how to use a hardware wallet before buying huge amount of coins. There are series of hacking happened already in different exchanges so storing your holdings there especially if its a huge amount is a no-no for me unless you are ready just incase anything goes wrong. For me, storing in a hardware wallet is better. Its better for me if you have your own control of your wallet. Well, we have our own opinions and experiences regarding storing our coins. If storing in exchanges would be better for you then so be it .

[maydna]

I am more paranoid when crypto is kept on exchanges. the risk of storing crypto on an exchange is higher than in a cold wallet. don't trust the exchange too much, they can freely steal your crypto and also risk being attacked by hackers.

That is because we can't fully control our coins and make us worry if the exchanges are getting into trouble in the future. But if the exchange has a good reputation, we can stay calm, but still, it is better to save the coin in our private wallet, so we don't need to worry about anything. You can convert your coins into other coins in the private wallet, so nothing to worry about. Or you can save it in the cold wallet and only send it into exchange if you want to trade and increase your funds.

[syntac]

I don't agree that if you want to store bitcoin you have to use binance or blockfi, because binance and blockfi can be hacked and we can lose bitcoins. It's much better to store bitcoins in a cold wallet because only you can access them.

[giammangiato]

It is not about being paranoid, but security is never too much when it comes to money, hackers aim for money, so if you hold huge sums on platforms like coinbase etc ... the risk is very high, always evaluate well first. to make risky exchanges with your cryptocurrencies, only if they are small amounts worth the risk don't you think?

[DarkDays]

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?

Exchanges = risk of hacks, it is out of our control.
Cold storage = risk of losing funds, it it in your control.

The way I see it, cold storage is the better alternative if you can trust yourself enough to safe-keep your own key phrase much like the safe-keeping of your log in details to your exchange. It is no brainer - really 

[Evgenklm]

I don't think so, it's better to keep it on a cold wallet than on the cex exchange, let's say it's calmer for me, especially now the exchanges require kyc, at any time they can say that your money is blocked or something else, so it's better to let it lie on a wallet where there is access 24/7.

[Ultegra134]

I'm not too paranoid about my cryptocurrency holdings, however, I don't have that much to justify a hardware wallet or whatever. I used to use an online wallet, but now I've moved to an offline wallet, stored on my PC. It's always better to be on the safe side, especially for those who might hold more than 0.10 BTC, for instance.

However, I used to have a decent amount of money on an exchange, which I had completely forgotten about, and nothing happened to them. However, that doesn't necessarily mean that funds are 100% safe. There's no guarantee on that. I'd rather be responsible for the loss of my coins rather than having to chase someone because they got hacked or just solely stole my money.

Generally, in case of loss of funds, it's extremely difficult to track down what happened to them. I'd also like to point out how many phising and scam websites are out there, I almost lost my coins from Metamask on a phising attempt, luckily, I managed to move everything before the scammers did.

[isaac_clarke22]

~

Either way in exchanges, you already had the risk of losing your fund anyway. I personally never had any cold storage, and I am just having a separate machine that is for my own desktop wallet. It won't be used for any browsing purposes that would risk of getting hacked or getting infected by spy/malware. Kind of an alternative, if one also does not want to spend too much in a hardware wallet.

[FanEagle]

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?

Why a lot of people are avoiding exchanges is because they are hot wallets, and hot wallets are online wallets which are mainly the target for hackers. You would hardly see anyone going after a cold storage, So, what they usually go for is exchanges and that’s why people are afraid of storing their coins on an exchange.

If the exchange is not working on their security, they might end up getting hacked and if a lot of money is stolen from that exchange,it may affect them and they wouldn’t be able to pay back the investors or users of their exchange. As for cold storage, just like the one you bought (Ledger Nano X), for your wallet to be hacked, it would have to be a mistake that is coming from you. That’s why you shouldn’t be giving out information about yourself online or anywhere at all. Sensitive information about you should be kept secret. With that said, for anyone to be able to have access to your cold storage they must have in one way or the other had access to your private keys.