Why does Bitcoiner still support the use of centralized exchanges?

[o_e_l_e_o]

So, as I see it, it's just a lot of unnecessary FUD, business as usual.

I wouldn't say it is fud. There was a legitimate vulnerability, which thankfully (this time) was picked up when only minimal damage was done. What if the bug went unnoticed for months, and resulted in losses of hundreds of millions which Binance were unable to cover?

This is part of the risk you take when using closed source software like Trust wallet. It can be filled with all kinds of bugs and vulnerabilities, and no one would be any the wiser until it is too late.

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[Ale88]

At the same time, as I said, I don't think that creating FUD about anything CEX related is somehow helpful for the community and for the people who are approaching this world for the first time.

I get what you are saying Ale88 Bruh, but i don't think it is fud, especially because of some of the recent events that have happened with centralized exchanges and services. And i noticed that if people approaching this BTC world for the first time start off with centralized exchanges, they tend to continue with it, forget that BTC is actually a decentralized network and even believe that without Binance BTC won't survive, so i think strongly debunking all these and trying to make them see decentralization as the way to use BTC is the right thing to do, and should not be called fud.

At the end it depends on what you want to do. If I just need to buy some crypto I can go for the easy way (CEXs) or for a more tech savvy way (DEXs), as long as the crypto world keeps growing I don't see the problem, it's benefits all of us at the end. Not everyone wants to learn all the necessary steps that are required to buy on DEXs and usually CEXs are almost idiot proof, almost. I think it's important to know what we're doing and what kind of options we have, then we make our choice. Luckily DEXs are getting better and more user-friendly, I remember years ago the first I used EtherDelta, I felt like I was in the 90s 

So, as I see it, it's just a lot of unnecessary FUD, business as usual.

I wouldn't say it is fud. There was a legitimate vulnerability, which thankfully (this time) was picked up when only minimal damage was done.

As I said it all depends on how you formulate the phrase because, to me, the way it was described looked kind of deceptive. Was there a vulnerability? Yes, absolutely. Did it create serious problems? No. But I understand that everyone has its own view of the facts. Just like CEXs, some people prefer those that (in theory) never had a single asset stole and others prefer those that actually had stolen assets but refunded the users. Is it better the exchange that looks unbreachable or the one that has shown how solves that situation? There is no wrong answer.

[John Abraham]

why do some Bitcoiners act contrary to them? Why do they continue to support centralized exchanges, use them, and retain their Bitcoin there?

I don't know if Bitcoiner supports Centralized exchanges. But yeah, Bitcoiners still use centralized exchanges like Binance and Coinbase. Some of them offer some excellent features and facilities. For example, Coinbase users can send Bitcoin to another Coinbase user for free without paying transaction fees. Binance users can do the same. This is one of the reasons, but the main reason is the unavailability of decentralized exchanges. I wouldn't say I like centralized exchanges. Still, I am using Binance and have compromised my privacy. I don't have other options to trade with my locals. There are a few numbers of platforms where I can find my locals and deal with them.

Of course, I don't want to trade with an unknown person who can run away with my money. I can also use this forum to trade, but I don't see any of my locals providing the service I am looking for. So, it's kind of I am forced to use their platform.

This is part of the risk you take when using closed source software like Trust wallet. It can be filled with all kinds of bugs and vulnerabilities, and no one would be any the wiser until it is too late.

Well, I didn't know that. Trust Wallet claims they are open-source wallet software. I don't know how to verify it. I should stop using Trust Wallet.

[posi]

At the same time, as I said, I don't think that creating FUD about anything CEX related is somehow helpful for the community and for the people who are approaching this world for the first time.

I get what you are saying Ale88 Bruh, but i don't think it is fud, especially because of some of the recent events that have happened with centralized exchanges and services. And i noticed that if people approaching this BTC world for the first time start off with centralized exchanges, they tend to continue with it, forget that BTC is actually a decentralized network and even believe that without Binance BTC won't survive, so i think strongly debunking all these and trying to make them see decentralization as the way to use BTC is the right thing to do, and should not be called fud.

At the end it depends on what you want to do. If I just need to buy some crypto I can go for the easy way (CEXs) or for a more tech savvy way (DEXs), as long as the crypto world keeps growing I don't see the problem, it's benefits all of us at the end. Not everyone wants to learn all the necessary steps that are required to buy on DEXs and usually CEXs are almost idiot proof, almost. I think it's important to know what we're doing and what kind of options we have, then we make our choice. Luckily DEXs are getting better and more user-friendly, I remember years ago the first I used EtherDelta, I felt like I was in the 90s 

So, as I see it, it's just a lot of unnecessary FUD, business as usual.

I wouldn't say it is fud. There was a legitimate vulnerability, which thankfully (this time) was picked up when only minimal damage was done.

As I said it all depends on how you formulate the phrase because, to me, the way it was described looked kind of deceptive. Was there a vulnerability? Yes, absolutely. Did it create serious problems? No. But I understand that everyone has its own view of the facts. Just like CEXs, some people prefer those that (in theory) never had a single asset stole and others prefer those that actually had stolen assets but refunded the users. Is it better the exchange that looks unbreachable or the one that has shown how solves that situation? There is no wrong answer.

I'm not taking sides as I'm using both CEX and DEX. But I have a question, if DEX is really better than CEX, then why are people using CEX more? DEX is not new, it was also born at the same time as CEX but is hardly chosen by many investors, proving it has limitations compared to CEX.
Depending on the needs of investors, we have suitable options, as traders or investing in altcoins, the use of DEX is extremely limited, but with CEX, it is very easy. And I believe many people are talking bad about CEX there are still some people who have signed up for CEX and use them.

[John Abraham]

Your financial freedom with Bitcoin is still guarantee because the exchanges do not or can not have access to your wallet. And the main thing is the wallet. It is when you transfer your coins to the exchange that you will make the transactions.

It's like you are saying you send your Bitcoin to me, and I can't access the funds. If you say that for the self-custodial wallet, I agree. Self-custodial wallets don't have access to your funds. But, when it comes to exchanges. They have access to your funds. They can use your coins to do whatever they want. This is why you see exchanges freeze user accounts and confiscate their funds. There are a lot of cases where exchanges like Binance and Coinbase freeze their user account and their balance. I have mentioned this in many threads so far.

Coinbase Case: https://bitcointalk.org/index.php?topic=5444423.0 In this thread, OP claims one of his known people had a Coinbase account, and Coinbase froze her account and seized her assets.
Binance Case: https://bitcointalk.org/index.php?topic=5370726.0 Binance Disabled user withdrawals and asked him to deposit to get unlocked. I would quote myself here;

During the Dogechain upgrade, Binance Mistakenly did some transactions twice a few years ago. It was their developer's mistake. To recover those funds, Binance locked their user's accounts and asked them to deposit to unlock their account. Imagine you withdrew 500K Dogecoin to an unknown wallet address about a year ago.

After a year, Binance sent another 500K Doge to this address, and now they ask you to return that amount. You may don't have access to this wallet anymore. How would you return them? Also, There was a massive pump of Dogecoin. Just imagine your 500K Doge was worth $100 only. But, when Binance asked you for a refund, 500K Doge was worth around USD 80K.

You can read more here https://bitcointalk.org/index.php?topic=5370726.0

If they couldn't access your funds, How would they freeze and seize your account? Exchange always has access to your funds. You can do nothing if they run away with your funds (If something happens like FTX).

[jokers10]

The only reason why I support or still keep on using centralized on Bitcoin or crypto is due to safely withdraw or convert my crypto into Fiat.
But if there would be other way for me to securely withdraw or convert crypto into Fiat without doing it in person then I would stop using centralized platforms.

It looks safety only until first problem with CEX: as any centralized financial project they consider user money in their accounts like something what they have a right to control. And it is just the most obvious problem which happens from time to time with many. Even big CEX sometimes scam and fail. And what is not less disgusting they lose and illegally sell personal data of users. And as many of them are dubious organisations without a proper state regulation it is not something unexpected at all.

It is not so easy and sometimes costly but I never pass KYC in crypto. I hope, will never be in need of that. What I wait is that most of spending can be done directly in bitcoin and there will be no need for anyone to use CEX or any other centralized third party.

[Minecache]

Yes, bitcoin was initially created as a payment method that could work without a 3rd party. But nowadays, people are considering and using bitcoin as an investment, they are less concerned with the function and utility of bitcoin but only interested in profit and convenience for them. And CEX provides all the services that investors need in the most convenient way. 
Moreover, the market is not only bitcoin, but we also have altcoins, and if you want to invest, buy, sell, and trade altcoins, you must go with CEX. It can be said that it plays an important role in the market whether you use it or not because people still need it.

Actually, I agree with what you said about bitcoin being designed only for one purpose—transactions without a middleman. But thanks to modern technology and the ways in which new generations are embracing bitcoin locally, I believe that people use bitcoin as an investment because it is so secure and because there are so few jobs in their societies. Bitcoin is a way of life both now and in the past. I'm curious as to how someone may participate in the bitcoin market while refusing to use CEX, which we all know is crucial if we want to enjoy using bitcoin.
When some people, such as some wealthy people who use bitcoin today, hear about it from the other side as a wise investment, they may change their minds and carry on with their previously positive transactions after learning about another, less complicated method of transaction.

Similar to you, I don't rule out DEXs entirely and don't encourage people to use CEX, but I'm curious to know how some investors who didn't use CEX can enter the market, especially newbies. Lately, even whales who have been holding bitcoins since their early years wake up and want to sell their bitcoins, they move them to centralized exchanges, they rarely use DEXs. And if we compare the trading volume of DEX and CEX, we can see a huge difference. When I use an exchange with small liquidity, it also worries me.

[BD Crypto]

I think Bitcoiners still support only trusted Cex exchanges because Thay are used to trade with higher liquidity and they want a good interface for trading. Actually centralized exchanges are far better for crypto trading as they have higher liquidity and many more options. But the main problem is that the funds aren't in your control that's why decentralized exchanges are the most secured. I think when decentralized exchanges will be more user-friendly then Cex exchanges will be rarely used by the Bitcoiners.

[jokers10]

I think Bitcoiners still support only trusted Cex exchanges
...

To invent a trustless peer to peer currency to trust later a CEX... genius! What can go wrong?! I trust no CEX first because they are CentralizedEX. And I see nothing they can do to change my opinion of them. Freezing of accounts, hacks, frauds, scams are always possibe with CEX, because they have a control over everything in their relationship with you and everything left for you is to trust them and hope nothing will go wrong.

[Wend]

Your financial freedom with Bitcoin is still guarantee because the exchanges do not or can not have access to your wallet. And the main thing is the wallet. It is when you transfer your coins to the exchange that you will make the transactions.

It's like you are saying you send your Bitcoin to me, and I can't access the funds. If you say that for the self-custodial wallet, I agree. Self-custodial wallets don't have access to your funds. But, when it comes to exchanges. They have access to your funds. They can use your coins to do whatever they want. This is why you see exchanges freeze user accounts and confiscate their funds. There are a lot of cases where exchanges like Binance and Coinbase freeze their user account and their balance. I have mentioned this in many threads so far.

Coinbase Case: https://bitcointalk.org/index.php?topic=5444423.0 In this thread, OP claims one of his known people had a Coinbase account, and Coinbase froze her account and seized her assets.
Binance Case: https://bitcointalk.org/index.php?topic=5370726.0 Binance Disabled user withdrawals and asked him to deposit to get unlocked. I would quote myself here;

During the Dogechain upgrade, Binance Mistakenly did some transactions twice a few years ago. It was their developer's mistake. To recover those funds, Binance locked their user's accounts and asked them to deposit to unlock their account. Imagine you withdrew 500K Dogecoin to an unknown wallet address about a year ago.

After a year, Binance sent another 500K Doge to this address, and now they ask you to return that amount. You may don't have access to this wallet anymore. How would you return them? Also, There was a massive pump of Dogecoin. Just imagine your 500K Doge was worth $100 only. But, when Binance asked you for a refund, 500K Doge was worth around USD 80K.

You can read more here https://bitcointalk.org/index.php?topic=5370726.0

If they couldn't access your funds, How would they freeze and seize your account? Exchange always has access to your funds. You can do nothing if they run away with your funds (If something happens like FTX).

I have also encountered several cases of user accounts being frozen by centralized exchanges. But we need to find out the reason behind that, why those users' accounts are frozen. Don't jump to the conclusion that they take money from users because those accounts have very small amounts, nothing compared to the assets of Binance or Coinbase. One more thing, I have never heard of having to deposit to unlock from Binance, maybe a new type of scam. Don't just listen to one side and jump to conclusions just because you don't like CEX, there should be fairness here.

[o_e_l_e_o]

Did it create serious problems? No.

Which was almost entirely luck. This vulnerability could very easily have resulted in millions in losses.

Is it better the exchange that looks unbreachable or the one that has shown how solves that situation?

Neither. It's better to keep your coins under your own control by using your own wallet and DEXs, and not have to trust a third party at all.

Well, I didn't know that. Trust Wallet claims they are open-source wallet software. I don't know how to verify it. I should stop using Trust Wallet.

Have a read of my post here: https://bitcointalk.org/index.php?topic=5415683.msg61049268#msg61049268

[Ale88]

At the same time, as I said, I don't think that creating FUD about anything CEX related is somehow helpful for the community and for the people who are approaching this world for the first time.

I get what you are saying Ale88 Bruh, but i don't think it is fud, especially because of some of the recent events that have happened with centralized exchanges and services. And i noticed that if people approaching this BTC world for the first time start off with centralized exchanges, they tend to continue with it, forget that BTC is actually a decentralized network and even believe that without Binance BTC won't survive, so i think strongly debunking all these and trying to make them see decentralization as the way to use BTC is the right thing to do, and should not be called fud.

At the end it depends on what you want to do. If I just need to buy some crypto I can go for the easy way (CEXs) or for a more tech savvy way (DEXs), as long as the crypto world keeps growing I don't see the problem, it's benefits all of us at the end. Not everyone wants to learn all the necessary steps that are required to buy on DEXs and usually CEXs are almost idiot proof, almost. I think it's important to know what we're doing and what kind of options we have, then we make our choice. Luckily DEXs are getting better and more user-friendly, I remember years ago the first I used EtherDelta, I felt like I was in the 90s 

So, as I see it, it's just a lot of unnecessary FUD, business as usual.

I wouldn't say it is fud. There was a legitimate vulnerability, which thankfully (this time) was picked up when only minimal damage was done.

As I said it all depends on how you formulate the phrase because, to me, the way it was described looked kind of deceptive. Was there a vulnerability? Yes, absolutely. Did it create serious problems? No. But I understand that everyone has its own view of the facts. Just like CEXs, some people prefer those that (in theory) never had a single asset stole and others prefer those that actually had stolen assets but refunded the users. Is it better the exchange that looks unbreachable or the one that has shown how solves that situation? There is no wrong answer.

I'm not taking sides as I'm using both CEX and DEX. But I have a question, if DEX is really better than CEX, then why are people using CEX more? DEX is not new, it was also born at the same time as CEX but is hardly chosen by many investors, proving it has limitations compared to CEX.
Depending on the needs of investors, we have suitable options, as traders or investing in altcoins, the use of DEX is extremely limited, but with CEX, it is very easy. And I believe many people are talking bad about CEX there are still some people who have signed up for CEX and use them.

Using DEXs is not something that every person feel safe and comfortable because everything is on you: you make a mistake, you pay, and of course you may lose everything, so they prefer CEXs because to buy and sell are easier and safer, that's it. As I said CEXs are almost idiot proof, there are no contracts to double check and approve and when you want to withdraw there are several security steps.

Did it create serious problems? No.

Which was almost entirely luck. This vulnerability could very easily have resulted in millions in losses.

In Italy we have a saying which you can pretty much translate as "if my grandfather had three balls it was a pinball machine".

Is it better the exchange that looks unbreachable or the one that has shown how solves that situation?

Neither. It's better to keep your coins under your own control by using your own wallet and DEXs, and not have to trust a third party at all.[/quote]
I never said to store the coins in an exchange. Exchanges are made to buy and sell, then withdraw, that's it. But there always is the possibility that something bad could happen even during that short timeframe.

[hZti]

Neither. It's better to keep your coins under your own control by using your own wallet and DEXs, and not have to trust a third party at all.

It’s true that your coins should always stay in your own custody and you should avoid any exception from that rule. However if you go to trade at an well established professional exchange, you will probably not need more then 10 minutes to buy/sell coins and withdraw your money and/or bitcoin. The probability of an attack or something like that are so low, that I would not think it is way higher than the probability to have some issue at a DEX.
The benefits of centralized exchange are obvious however, since you can go to established KYC exchange and have clean tax statements. For me this outweighs the benefits of a DEX.

[Ale88]

However if you go to trade at an well established professional exchange, you will probably not need more then 10 minutes to buy/sell coins and withdraw your money and/or bitcoin. The probability of an attack or something like that are so low, that I would not think it is way higher than the probability to have some issue at a DEX.

It's nice to see that someone gets it. Let's not forget that the final goal, for all of us, is growing the BTC/crypto community, that is going to benefits all of us, we still need to grow a lot.

Let's say that, hypothetically, CEXs didn't exist, how many people would be able to buy using a DEX? And how many of those people would probably fall in some kind of scam and lose all their money? And at that point do you think they're still going to be interested in the crypto ecosystem or are they just going to tell their family and friends how everything is a scam because they've been scammed? I have an idea

[BITCOIN4X]

It’s true that your coins should always stay in your own custody and you should avoid any exception from that rule. However if you go to trade at an well established professional exchange, you will probably not need more then 10 minutes to buy/sell coins and withdraw your money and/or bitcoin. The probability of an attack or something like that are so low, that I would not think it is way higher than the probability to have some issue at a DEX.
The benefits of centralized exchange are obvious however, since you can go to established KYC exchange and have clean tax statements. For me this outweighs the benefits of a DEX.

My first bitcoin purchase was through a centralized exchange licensed to operate in the jurisdiction of my country. I had to go through KYC there due to user obligations before purchasing, but it wasn't exactly the threat that scared me the first day.

What I'm trying to say is, centralized exchanges have more potential to keep the crypto industry and the bitcoin community growing. Adoption can also be expected as more people become familiar with bitcoin, but if they care deeply about privacy from day one, then a centralized exchange is clearly not for them. Of course they have to withdraw all their budgets from a centralized exchange to the wallet which gives them complete control for increased security and the risk of losing money for whatever reasons may be stated. Privacy is obviously very important, but when users don't really care about privacy because they use a centralized exchange then that doesn't mean users don't support bitcoin.

[o_e_l_e_o]

The probability of an attack or something like that are so low, that I would not think it is way higher than the probability to have some issue at a DEX.

And how many of those people would probably fall in some kind of scam and lose all their money?

Don't take this the wrong way, but have either of you actually used a real DEX before? I often see people on these forums talk about how DEXs are complicated, DEXs are high risk, newbies can't use DEXs, etc., but they have never actually tried one themselves.

DEXs are not any more complicated than CEXs. Different, yes. But that doesn't mean more difficult, it just means different to what you are used to. I would argue that having to create an account on a CEX, and then send off all my documents and a selfie while holding today's newspaper with the name of the CEX written on it, and then wait 5 days for approval, and then have to do a video confirmation, and then wait another 5 days, and then link a bank account, and then wait 3 days for my transfer to clear, etc., etc., is significantly more complicated than opening a DEX and being ready to trade in 5 minutes.

There have been literally billions of dollars worth of crypto stolen via CEXs, and millions of users have had their private information leaked, hacked, shared, or sold, via CEXs. With a DEX, not only have such attacks not happened, but such attacks are largely not even possible since you don't hand over your data or your coins in the first place.

[John Abraham]

we need to find out the reason behind that, why those users' accounts are frozen. Don't jump to the conclusion that they take money from users because those accounts have very small amounts, nothing compared to the assets of Binance or Coinbase.

What if the exchange refuses to explain why they blocked the account, and what if they don't respond to your email for months? According to their TOS, they are not responsible for explaining this to you or any other 3rd party. Most exchanges Write this kind of thing on their TOS page, which we never bother to read. By accepting their TOS, You are giving them ultimate power over your exchange account and the funds you have there. Once again, I refer you to this thread; Do you know what is hiding behind Centralized exchanges User Agreement?

One more thing, I have never heard of having to deposit to unlock from Binance, maybe a new type of scam. Don't just listen to one side and jump to conclusions just because you don't like CEX, there should be fairness here.

It's not like a typical scam. They won't scam you in a typical way. I don't think you have read carefully what I've said. I refer you to this thread Binance Stuck My withdrawal by shasan for more detailed information. It doesn't look like a scam. But, It's a scam.

[Ale88]

The probability of an attack or something like that are so low, that I would not think it is way higher than the probability to have some issue at a DEX.

And how many of those people would probably fall in some kind of scam and lose all their money?

Don't take this the wrong way, but have either of you actually used a real DEX before? I often see people on these forums talk about how DEXs are complicated, DEXs are high risk, newbies can't use DEXs, etc., but they have never actually tried one themselves.

DEXs are not any more complicated than CEXs. Different, yes. But that doesn't mean more difficult, it just means different to what you are used to. I would argue that having to create an account on a CEX, and then send off all my documents and a selfie while holding today's newspaper with the name of the CEX written on it, and then wait 5 days for approval, and then have to do a video confirmation, and then wait another 5 days, and then link a bank account, and then wait 3 days for my transfer to clear, etc., etc., is significantly more complicated than opening a DEX and being ready to trade in 5 minutes.

There have been literally billions of dollars worth of crypto stolen via CEXs, and millions of users have had their private information leaked, hacked, shared, or sold, via CEXs. With a DEX, not only have such attacks not happened, but such attacks are largely not even possible since you don't hand over your data or your coins in the first place.

I used (and still use) DEXs, and for each one I create a separate wallet to avoid making a simple mistake that could lead me to lose everything I have. I used to buy shitcoins during the bull runs and I knew that had I approved the wrong smart contract everything would be gone.

Would I ever suggest to a newbie starting with a DEX? Personally no, I wouldn't, there are too many risks, before that person needs to understand how the crypto world works, and I doubt that someone completely new is in such a hurry he can't wait for their KYC to be completed... CEXs for me are the best starting point, let's not forget that there still are thousands of people who still give away their seed to some fake customer service representative on Telegram, can you image these kind of people on a DEX?

[FahriZah]

This Question Very Important And I Hope My Need To Answers Little That I Know As Well Why Does Bitcoiner Still Supporting The Use Of Centralized Exchange Because Bitcoin Is One Of The Best And Biggest Currency And When Compared With Decentralised I Mean DEX And Centralized That Means Shortly CEX It’s Totally Different Way And I Also Using Both Exchange DEX And CEX But Primary I Support And I Suggest CEX Is The Best Way To Starting Anyone.

[Ale88]

This Question Very Important And I Hope My Need To Answers Little That I Know As Well Why Does Bitcoiner Still Supporting The Use Of Centralized Exchange Because Bitcoin Is One Of The Best And Biggest Currency And When Compared With Decentralised I Mean DEX And Centralized That Means Shortly CEX It’s Totally Different Way And I Also Using Both Exchange DEX And CEX But Primary I Support And I Suggest CEX Is The Best Way To Starting Anyone.

Please don't use capital letters for every single word