Newbie Reminder: Treat Exchanges as Marketplaces

[Davidvictorson]

Dear newbies, please treat exchanges, such as Binance, KuCoin, Kraken, Huobi, OKX, and Coinbase, as marketplaces. What do I mean? Just as you do not leave your goods on the market after you have paid for them, you take them home with you. Consider your coins as the goods you bought at the marketplace. Your bitcoins should only be stored in cold storage wallets after purchase, and transferred out when you want to sell them. It takes less than 10 minutes. Remember, if you don't have the keys, it's not your coins.

[1714057958]

1714057958

[mk4]

Quite a good analogy. The same reason how you immediately get your money on money remittance centers and not leave them there unnecessarily just because you're lazy.

Seriously, most exchanges today have great looking UIs that it gives the impression that there's nothing that can go wrong with the platform.

[slackovic]

I really don't understand why would anyone use a CEX these days. Especially for "normal" spot trading. I understand that Ethereum fees are still too high to use Uniswap for a daily trading but there are bunch of L2 solutions that users can trade one with very little gas fee.

And then there is leverage trading. Before it wasn't that easy to do leverage trading on a decentralized exchanges but lately there is an increased popularity in DEXes where users can do leverage trading.

And additional benefit is that no one is forcing you to do KYC on a decentralized exchange while on some centralized exchanges KYC is mandatory.

[Charles-Tim]

Seriously, most exchanges today have great looking UIs that it gives the impression that there's nothing that can go wrong with the platform.

Exactly, but they can be hacked. Manynkf their coins are on hot wallets, they are handling customers coins and large in number, the reasons hackers do more work for haxk exchanges.

Hackers will find it more difficult or more impossible to hack if they use cold wallets.

The best is to just setup a cold storage. If you want it to be online, multisig will be perfect. Combining multisig on cold storage or hardware wallet are most perfect.

Noncustodial wallet gives full control.

[cryptoaddictchie]

Dear newbies, please treat exchanges, such as Binance, KuCoin, Kraken, Huobi, OKX, and Coinbase, as marketplaces. What do I mean? Just as you do not leave your goods on the market after you have paid for them, you take them home with you. Consider your coins as the goods you bought at the marketplace. Your bitcoins should only be stored in cold storage wallets after purchase, and transferred out when you want to sell them. It takes less than 10 minutes. Remember, if you don't have the keys, it's not your coins.

This is a good suggestion. But what if a guy always trade big bulks of tokens and stablecoins? He should pass the level or the minimum withdrawal he can only do and stick to that everyday. (Im talking about a lot of money or whales). Also possibly that liqudity on dex might not be enough. Usually big pool or the market is on cex due to trading volume. But what you said is right, as much as possible keep on non custodial wallet.

[Welsh]

Treat it as a car, once you buy the car you don't typically leave it on the forecourt. You drive it off. Unfortunately, until we introduce a community standard, and start boycotting exchanges which have wallets, this probably isn't going to change.

I'm of the opinion that any exchange advertising their wallet services is shady in the first place. It's encouraging bad practices. Instead, wallets shouldn't exist. Instead, pay for your Bitcoin, but input an external address at the time of purchase, so that it's impossible to keep Bitcoin on the exchange.

[Awaklara]

that is very correct. I used to also put some of the assets I own on the exchange. I think it will be very easy when I want to sell it and don't need to transfer again. and immediately make withdrawals when I need fiat. ah, it turns out I did something wrong for quite a while. and of course, it turns out to have a very big risk.
now I only move assets from my wallet when I need fiat or do day trading. sometimes still forget to withdraw and leave it on the exchange.

[CryptoHeadlineNews]

This is the best advice and explanation so far by the O.P to anyone who is currently into crypto now, as we never can tell when another trusted exchange may go bankrupt after the fall of "FTX" during the week because if only had we treated exchanges as only marketplace to buy coins, while we send to a cold wallet, the effect on the crypto market wouldn't have been that much. However, it's never too late for us to have a u-turn from today, most especially the newbies who are new to bitcoin.

Advantage of having your BTC in a cold wallet
1. You have total control over your funds
2. It can't be stolen or hacked

Example of a cold wallet Is Electrum wallet

[ajiz138]

Beginners should be aware that this reminder is important for them not to do exchanges such as houses that store goods in them.

Maybe we used to think that storing on the exchange is a safe place even though Binance is the largest exchange in the world still it doesn't guarantee our assets are safe we should avoid that and change our mindset to keep our assets in non-custodial wallets because private keys are the most important thing to protect our assets.

I have outreached to close friends so they don't keep assets on the exchange, and thankful of them believing that non-custodial wallets give them full control over them so they left the exchange to store assets.

[Queentoshi]

Dear newbies, please treat exchanges, such as Binance, KuCoin, Kraken, Huobi, OKX, and Coinbase, as marketplaces. What do I mean? Just as you do not leave your goods on the market after you have paid for them, you take them home with you. Consider your coins as the goods you bought at the marketplace.

I did not learn this on time, but I was lucky not to learn the lesson the bitter way, that "not your keys, not your coins" sentence that is used many times here made me realize that exchanges cannot be trusted. The recent situation in cryptocurrency is enough for people who have not known this to learn about it now, but I still think some people will not learn and will never learn, even some who learn, may still forget about it when the importance of this is no longer stressed.

[Findingnemo]

I really don't understand why would anyone use a CEX these days. Especially for "normal" spot trading. I understand that Ethereum fees are still too high to use Uniswap for a daily trading but there are bunch of L2 solutions that users can trade one with very little gas fee.

And then there is leverage trading. Before it wasn't that easy to do leverage trading on a decentralized exchanges but lately there is an increased popularity in DEXes where users can do leverage trading.

And additional benefit is that no one is forcing you to do KYC on a decentralized exchange while on some centralized exchanges KYC is mandatory.

Decentralized exchanges are not really user friendly and also lacks trading volume which is the reason why newbies and regular traders trust the centralized exchanges. Ofcourse KYC becomes mandatory in almost all the exchange but with the coming years it is not avoidable so people get used to that since they are making money from it.

Day traders can't really afford to move their funds to their wallet everyday but its possible to follow by other kind of traders.

[Zaguru12]

Day traders can't really afford to move their funds to their wallet everyday but its possible to follow by other kind of traders.

Yeah it's a challenge for daily traders. I had suggested before that it will be better to split them into two or more exchanges depending on on the traders fund. At least its rare to have all exchanges having issues at the same time. Then monthly some of the funds can be moved to wallets. This could minimise the risk.

[Falconer]

Dear newbies, please treat exchanges, such as Binance, KuCoin, Kraken, Huobi, OKX, and Coinbase, as marketplaces. What do I mean? Just as you do not leave your goods on the market after you have paid for them, you take them home with you. Consider your coins as the goods you bought at the marketplace. Your bitcoins should only be stored in cold storage wallets after purchase, and transferred out when you want to sell them. It takes less than 10 minutes. Remember, if you don't have the keys, it's not your coins.

This advice has literally been said hundreds of times to beginners or anyone who has deposited their assets on the exchange. I don't think things will change especially many active traders will not care about this advice because they believe that as long as they are still trading then having assets on the exchange will allow them to take advantage of opportunities much quicker.

Your advice is more suitable for investors or for those who have not traded anything on the exchange for a long period of time. So don't equalize traders and investors even though it is true exchange is not a completely safe place for our assets.

[Dunamisx]

Your bitcoins should only be stored in cold storage wallets after purchase, and transferred out when you want to sell them. It takes less than 10 minutes. Remember, if you don't have the keys, it's not your coins.

I also believe that the current events with exchanges will be a lesson and same way sound a warning to everyone using centralized exchanges to take oft their life earnings and assets off from them in other not to be a victim just as in the case of FTX , we don't know which other exchange will be the next very soon because we are in the peak of market volatility and this has proof to be one of the means whereby some exchanges were exposed or being casted.

[BIT-BENDER]

OP is this post only about Bitcoin? Well in my own opinion it shouldn't come to think of it many Newbies but more altcoins that bitcoin.
So regardless of the coin you are buying I also support you do what the OP has said on his post. I think their are some exchange that try to offer users some freebies when they leave their coins on that exchange, it still are dangerous risk that is far more disastrous than any benefits the exchange may want to offer. Exchanges is a literally understandable and take it for what the word stands for and not and a double tasking application that you can also use as a wallet. Open a personal wallet is easy and keeping it safe is easy as well.

[BITCOIN4X]

Your bitcoins should only be stored in cold storage wallets after purchase, and transferred out when you want to sell them. It takes less than 10 minutes. Remember, if you don't have the keys, it's not your coins.

Deliberately bold the sentence above because it is a truth. Ironically to date nothing will stop people from having their assets in exchanges. They decide whatever they want including save their funds on the exchange.

The last thing is, regret will come too late even if now everything seems safe. There are many exchange hacking incidents, it is the most feared thing but actually it also doesn't prevent people's interest from having funds in exchange. This solution is for those who care about the safety of their funds in the long term so they don't care about the fee incurred to transfer assets to a personal wallet.

[The Cryptovator]

Yep, well said. This a pretty good example to show the reality. We have never been supported to keep your funds in the exchange ever and day by day it's becoming more transparent. A lot of things happening in the crypto world which have been making this space more worst. We should take the lesson from history. There are a lot of reasons why shouldn't store your crypto in the exchange. It's been never safe and won't be safe ever.

[Cryptomultiplier]

Dear newbies, please treat exchanges, such as Binance, KuCoin, Kraken, Huobi, OKX, and Coinbase, as marketplaces. What do I mean? Just as you do not leave your goods on the market after you have paid for them, you take them home with you. Consider your coins as the goods you bought at the marketplace. Your bitcoins should only be stored in cold storage wallets after purchase, and transferred out when you want to sell them. It takes less than 10 minutes. Remember, if you don't have the keys, it's not your coins.

With this in mind is it a plausibility that coins kept in wallets can be affected by the bear or bull seasons?
Also, it is quite important to adhere to this cautionary thread in order not to fall victim of manipulations, hack or simple loss due to effect of the exchange seasons.
Your last phrase however, is the most important. 'If you don't have the keys, its not your coins.' I pray to never forget mine as it has happened in previous occasions and be more open and willing to learn, trade and invest as this is a market and I don't know why I would be here if not for making gains.

[Igebotz]

Example of a cold wallet Is Electrum wallet

Gives you access to your keys but Electrum wallet offers hot storage which is still hackable, these are some example of complete cold hardware wallets; Ledger Nano X. Trezor One. SafePal S1 etc.

[_BlackStar]

Day traders can't really afford to move their funds to their wallet everyday but its possible to follow by other kind of traders.

Somehow I get your point, obviously because the transaction fees that exchanges charge when withdrawing their funds will affect day traders decisions.

I'm not sure newbie with a low investment value would be willing to withdraw their funds from the exchange just because of the OP's suggestion. In fact, binance convinces its users with SAFU ^{[even if that's not a good reason]} so many of their customers believe that their funds are safe. I trust in a certain amount on exchange, but of course for the amount I can afford to lose. The right choice is as suggested, but certainly not really adopted by all users.

In addition, storing funds in a wallet that is fully controlled by the user is also not completely safe if you do not understand and practice good security. One other smart thought is, don't keep your funds in one basket. But there's nothing wrong about the OP's suggestion, I full support for it.