99% of People Will Lose Crypto in Self Custody

[kotajikikox]

Recently, when people are withdrawing their money to personalized wallets, CZ says that  out of these people 99% of them will lose money, as only 1% of the people are capable of handling the non-custodial wallets.

Not so sure where did he get this Idea but we are talking about special funds here , do you really think that you and me are part of those 99%? imagine this whole forum in which many are now using custodial wallet will be part of that bit percentage or are we the one that will add to that 1 %?
I will never lose mine no matter what because it is not only me that has the possession .

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[Pmalek]

CZ has realized and sees that a lot of bitcoin and altcoins are leaving his exchange, so he wants to stop that trend in any way possible. Scaring people with information like that is just one method. What he is really trying to say is, please don't withdraw all your coins from Binance. Leave something here. 

He is right that many people will make mistakes that ultimately will result in permanent damage and loss of their coins. But that number isn't 99%. The worst thing is using software wallets on desktops and mobiles that are permanently online and used for everything you can possibly think of. School, work, financials, leisure time, gaming, porn, torrents, social media, etc. Unless you come up with your own system and use different devices for different activities, your chances of messing up are bigger. At least use a separate computer just for your mot valuable crypto and financials.   

Get rid of software wallets on your everyday computers and switch to airgapped systems or hardware wallets and you will be much safer.   

[buwaytress]

CZ has realized and sees that a lot of bitcoin and altcoins are leaving his exchange, so he wants to stop that trend in any way possible. Scaring people with information like that is just one method. What he is really trying to say is, please don't withdraw all your coins from Binance. Leave something here.   

Does he still charge 0.5 mbtc for withdrawals? That's a heck lot of money, and a missed opportunity, I'd say. He processed something like 6B in 3 days? Why not just encourage everyone to prove that his exchange is liquid and he can honour every withdrawal? And keep encouraging people to keep their BTC on their own wallets after trading?

He earns with each withdrawal, so it benefits him more to get people to keep withdrawing after every trade.

Why's he so afraid to make money? Surely not because Binance is... not overcollateralised as promised? Shock!

[Pmalek]

Does he still charge 0.5 mbtc for withdrawals?

I think he still is, yes. According to the official source, the bitcoin withdrawal fee is 0.0002 BTC. But just two lines below that, we see an entry for 'BTC(SegWit)' whose withdrawal fee is 0.0005 BTC.

Begs the question, what is 'Bitcoin' and what is 'BTC(SegWit)'. Do legacy addresses belong to 'Bitcoin' and nested/native segwit belongs to the second type? Or does he just consider native segwit as 'BTC(SegWit)' and nested goes into the general 'Bitcoin' category? Who knows I am not sure my Binance account is still active to log in to check. Anyways, I am not going to do that now and from this device.

The second question I would have after looking at their withdrawal data is why would segwit transaction cost more than legacy withdrawals?

[Reatim]

Recently, when people are withdrawing their money to personalized wallets, CZ says that  out of these people 99% of them will lose money, as only 1% of the people are capable of handling the non-custodial wallets.

At least I will never be part of that 1% 

had been holding my coins in Non custodial wallet but for years? i kept my funds intact and safer , also one of my wallets are being kept by my Wife so at least she will be the one that has full responsible towards that said amount.


and also even if there are some who lose theirs? that does not mean majority will be lazy to keep their wallet safer .

[Pmalek]

...also one of my wallets are being kept by my Wife so at least she will be the one that has full responsible towards that said amount.

Is it a software wallet on a permanently online device or some other solution? I hope your wife is smarter and isn't a Facebook/Instagram addict like one of my ex girlfriends.

She told me one day that her laptop was acting up and she lost access to get Facebook, email, and a bunch of other things and asked if I can fix it. Turns out she got tricked over Facebook by some fraudulent service to hand over her credentials and was infected with malware in the process. Why? Some other bright friend of her suggested trying out this wonderful new service that shows you which of your male friends look at your pictures the most. In other words, she wanted to find out who besides me is interested in... you know... poking her from certain angles and positions.

I laughed my ass off and she didn't want to admit it because she realized what she did.   

[yazher]

Of course, that's what he going to say because he is merely promoting his company and also they wanted to keep the use of a Centralized wallet because of how the decrease of its usage has been declining these past few days. After the Admin of this community highlighted the danger of keeping your crypto assets in the centralized exchanges, they wanted to fire back some logic but in reality, the admin said the truth and nothing can take you to safety except learning how to use hard wallets and how to keep it safe from hackers.

[buwaytress]

Does he still charge 0.5 mbtc for withdrawals?

I think he still is, yes. According to the official source, the bitcoin withdrawal fee is 0.0002 BTC. But just two lines below that, we see an entry for 'BTC(SegWit)' whose withdrawal fee is 0.0005 BTC.

Begs the question, what is 'Bitcoin' and what is 'BTC(SegWit)'. Do legacy addresses belong to 'Bitcoin' and nested/native segwit belongs to the second type? Or does he just consider native segwit as 'BTC(SegWit)' and nested goes into the general 'Bitcoin' category? Who knows I am not sure my Binance account is still active to log in to check. Anyways, I am not going to do that now and from this device.

The second question I would have after looking at their withdrawal data is why would segwit transaction cost more than legacy withdrawals?

There you go, even can't promise what official source says. Even at that "low" price it's still over $3 per withdrawal, and I remember the 0.5 mbtc fee was too rich for me (not to mention it gets even higher in congested network periods).

It's all moneymaking, there's no reason he'd not want to earn for withdrawals, and repeated withdrawals.

What else could he be afraid of if not that he doesn't have enough for a true "bank run"?

[tjtonmoy]

People are ignorant when in comes to accept their own mistake. And they are happy to blame the others for their mistakes. That's the reason for people like this to get manipulated so easily. And people who know this, they tend to take advantage from people like this.
Even his words are very convincing, I doubt many people will trust his words. After the FTX incident and all this mess in the market, I personally don't trust anyone related to any Centralized Exchanges. 
As he said that people will forget or lose their assets, then how come so many early holders are still holding their assets safely? Doesn't makes sense.

[serjent05]

Recently, when people are withdrawing their money to personalized wallets, CZ says that  out of these people 99% of them will lose money, as only 1% of the people are capable of handling the non-custodial wallets.

‘99% of People' Will Lose Crypto Storing in Self-Custody: Binance CEO Changpeng Zhao

He may be right because most people do not understand the risk, if they are not careful they could lose all their crypto.  Some may lose their private keys and others may connect their wallet at scam sites and they will be deprived of their funds.

Education and understanding of non-custodial wallets is necessary.  A lot of people have move funds out of binance recently, lets see if they know how to safeguard their bitcoin/ altcoins in these wallets.

Of course CZ saying that 99% of people don't know how to handle the wallets is exaggerating, and it's easy to guess why since he runs the biggest exchange in the world. But besides that he's right, I'm pretty sure that probably at least half of the people who buy cryptos aren't able to properly handle a personal wallet.

I will also partially agree with his statement, I have a cousin who just entered the market 1 month ago, and he told me that he prefers using binance to using a non-custodial wallet, he thinks that storing private keys is too risky and too complicated. Although I have explained the difference and the importance of protecting our own property rather than leaving it to someone else to hold, but he still doesn't seem to understand and doesn't envision the importance of being the owner of his property. I don't want to argue with him much, but I hope with time, he will realize the difference and know how to store his assets properly.

Your cousin doesn't want to go out of his comfort zone to know about the importance of self-custody.  You made the right decision of not arguing with him after all the explanation.  Let his experience teaches him the slopes of cryptocurrency, by then he will acknowledge that you are right from the start.

People are ignorant when in comes to accept their own mistake. And they are happy to blame the others for their mistakes. That's the reason for people like this to get manipulated so easily. And people who know this, they tend to take advantage from people like this.
Even his words are very convincing, I doubt many people will trust his words. After the FTX incident and all this mess in the market, I personally don't trust anyone related to any Centralized Exchanges. 
As he said that people will forget or lose their assets, then how come so many early holders are still holding their assets safely? Doesn't makes sense.

I think it is more on avoiding the blame of their own mistake that is why they wanted to blame others.  Same goes of not practicing self-custody of their own cryptocurrency.  The don't want to be held responsible and wanted to put the blame on others.

[Smartvirus]

~snip~

He did say that huh @CZ. I suppose leaving it at centralised exchanges are safe then?
Centralised exchanges can't be half as safe as non custodial wallets. I wonder how people do trust it. The onlyeans to loosing coins from a non custodial wallet is due to a users carelessness. As per either having a bugged device or forgetting of private key or seed phrase and not being private enough as per keys or seed phrase security.

When it comes to centralised exchanges, the only advantage you've got is the password recovery and nothing else. All the above could still play out and even more. Like exchange hacks, mismanagement of funds as seen in FTX, not to mention that, your verified mail address could be hacked, linked and transactions could as well be done from a different device.

I don't want to discredit what his said @CZ but, I'll say users should see it for a warning and apply caution when transacting.

[Bitstar_coin]

I wouldn't say 99% per se but am I guessing quite a high number of people will most likely misplace their private keys mostly out of carelessness. Who knows this could be one of the reasons why the majority of investors were living their assets in centralized exchange instead of their personal wallets.
Storing your assets in a personal wallet is one part of the risk, other like hack and loss of keys are also major concerns.
 

[Altryist]

I wouldn't say 99% per se but am I guessing quite a high number of people will most likely misplace their private keys mostly out of carelessness. Who knows this could be one of the reasons why the majority of investors were living their assets in centralized exchange instead of their personal wallets.
Storing your assets in a personal wallet is one part of the risk, other like hack and loss of keys are also major concerns.
 

The fear of losing your keys and therefore keeping your coins on the exchange is simply shifting the responsibility onto someone else. At the same time, you need to understand that this is not safer and this should not allow you to feel that your funds are safe, in fact, these are even greater risks. But people want to believe that the exchange can take care of their coins, they want to believe that if they lose access to their coins, the exchange will help them restore it, this is a big delusion.

[Baofeng]

And this is just CZ trying to say to crypto enthusiast to put their money on his exchange Lol.

99% is a huge numbers and he is just exaggerating it, of course there are lost bitcoin and crypto but this was long time ago, when people doesn't value them at all. But in the last 5 years, I think investors do know how to protect their self custody wallet, that this is the prefer way of holding our assets, in a wallet that we have total control of. Instead of 3rd party like exchanges that can be hack.

[freedomgo]

While he has a slight point, I'm really not a fan of the 99% number, knowing how frequently attacked centralized exchanges are.

I think the only case where I'll justify leaving funds on a centralized exchange, is when the holder is a totally technologically-illiterate senior citizen. On the other hand, if the holder is capable of using a smartphone, chances are — he/she is capable of using a Ledger hardware wallet.

But yea, you shouldn't lose your funds in self-custody if you aren't utterly careless.

I believe even if the user is illiterate, but always long for the safety of his coins, then he can always find a buddy that he can be trusted who is also good in crypto, to make him a self custody wallet, rather than taking risk from entrusting his coins to centralized exchanges. Otherwise, if he has no one to run to, then no choice but to trust the centralized exchanges but only put the amount of coins enough for his trading activity.

[Pmalek]

As he said that people will forget or lose their assets, then how come so many early holders are still holding their assets safely? Doesn't makes sense.

You can't possible know who is holding what, who still has access to their coins, and who has lost their private keys years ago. Unless you see sporadic or regular transactions coming in and going out of old addresses, you can't know. Not everyone who has lost their coins complains about it publicly. And some of those unfortunate ones have surely passed away, been killed, seriously injured, or are otherwise incapacitated to spend their bitcoin.

Storing your assets in a personal wallet is one part of the risk, other like hack and loss of keys are also major concerns.

Forgetting your kids at the park or mall and leaving without them is also a risk. Still, that doesn't stop couples from having kids. I intentionally didn't want to use a worse example.

[Mauser]

He may be right because most people do not understand the risk, if they are not careful they could lose all their crypto.  Some may lose their private keys and others may connect their wallet at scam sites and they will be deprived of their funds.

Of course there are risks involved in self custody of crypto currencies, but there risks in any form of storage. Saying that 99% of the people are going to lose thei funds seems like an exaggeration. How does he even come up with that number, there is no empirical proof for that clima, more of a subjective assessment. Also not sure if the CEO of one of the biggest crypto exchanges is the best person to speak up a gainst self custody. It's good to make people aware of the risks involved in being responsible for your own cryptos, but he obviously has some motivation for people not to store their own coins. It's a lucrative business for an exchange to have the customers leave their coins at the exchange. In the past we have seen big exchanges going bankrupt, resulting in large losses for customers who didn't self store their coins. I personally prefer to be responsible for my own coins, even if that means a little bit more risk of theft.

[KennyR]

The worst thing is probably using software wallets on desktop and mobile that are permanently online and used for just about anything you can think of. School, work, finance, leisure, games, porn, torrents, social media, etc. Unless you build your own system and use different devices for different activities, your chances of screwing up are much higher. At least use a separate computer just for your precious crypto and finances.

Using separate computer for cryptocurrency holdings and to manage finance is a better choice. This won't work with every user. Complete control in the hands of the wallet owner makes it more secure. Online wallets are always prone to breach and hacks. Self custodial wallets were easy to use once used to it. For the first time it used to be little difficult, if we weren't good into technology.

[BALIK]

He may be right because most people do not understand the risk, if they are not careful they could lose all their crypto.  Some may lose their private keys and others may connect their wallet at scam sites and they will be deprived of their funds.

Of course there are risks involved in self custody of crypto currencies, but there risks in any form of storage. Saying that 99% of the people are going to lose thei funds seems like an exaggeration. How does he even come up with that number, there is no empirical proof for that clima, more of a subjective assessment. Also not sure if the CEO of one of the biggest crypto exchanges is the best person to speak up a gainst self custody. It's good to make people aware of the risks involved in being responsible for your own cryptos, but he obviously has some motivation for people not to store their own coins. It's a lucrative business for an exchange to have the customers leave their coins at the exchange. In the past we have seen big exchanges going bankrupt, resulting in large losses for customers who didn't self store their coins. I personally prefer to be responsible for my own coins, even if that means a little bit more risk of theft.

I don't know why he intentionally exaggerated that number, but many people say that because he owns an exchange, and if people hold assets in their wallets, he will have no customers. This is not true.
Because even if we store assets on the exchange, they will not benefit. Exchanges provide us with services such as trading, futures trading, mining, and staking...which means that they can make a profit when we use their services.  For holders, the exchange is not necessary, but for a trader, the exchange is essential. He doesn't need to invite us to use their services, but if you are a trader, you will have to find them yourself.

[coolcoinz]

The worst thing is probably using software wallets on desktop and mobile that are permanently online and used for just about anything you can think of. School, work, finance, leisure, games, porn, torrents, social media, etc. Unless you build your own system and use different devices for different activities, your chances of screwing up are much higher. At least use a separate computer just for your precious crypto and finances.

I've done that and never had any issues.

Let's not be paranoid about lack of security in desktop wallets. If you get a ton of malware you're going to expose everything like your online banking and private information.

Most of my coins is on a separate offline computer and on my ledger, but I've also had online desktop and mobile wallets where I kept smaller amounts, like 0.1 BTC or less. I've never had any issues with any of them, never lost anything, never had malware...

You need some discipline online. Don't open shady sites, avoid porn sites with popups and stuff, never install anything downloaded from torrents, use only verified software, don't open suspicious emails, have a good, paid anti virus software and you'll be completely fine using a desktop wallet.
Just don't use that for very large amounts of crypto. If you hold over 1 BTC, get a dedicated offline PC, or a hardware wallet. It's going to cost you less than 0.5% of your money and be a huge safety improvement.