Cefi and defi wallet. My brief review!

[Hewlet]

If you're someone new in the online space, and you're considering the right wallet to download for saving of funds, you need to understand what cefi (centralized finance) and defi(decentralized finance) wallet means and also know which is the best option for you to use.
Let's look at the two kinds of wallet separately.
1. Cefi (centralized finance) wallet: they operate within centralized finance. In a simple way, it means that this platforms have access just like the normal banks to your assets and private keys. They control all your crypto deposits and I think the main reason why people use this kind of wallet is basically due to the high security they provide for your crypto and also because of other trading services like p2p, sports and future trading. Its disadvantage is that in some cases of unexpected shutdown or hack, it's very possible that you will loose your money, plus if you have any negative report on the transactions you execute, your account can be blocked and in some cases your assets might be seized and they can deny you access to your wallet again.
Example of the cefi wallet are 1. Binance, bybit block chain, coinbase etc

2. Defi (decentralized finance) wallet :  for this, you have total control of your crypto. You can login your recovery key using any defi wallet at any time you want to do your transactions. Just like the cefi wallet, the defi wallet has it disadvantage which is that, you are the one responsible for your security. If for any reason you loose your recovery key, your funds are all gone.
Example of defi (decentralized platforms) are; trust wallet, exodus, meta mask etc.
For beginners in the crypto space that are just interested to save crypto, it's best to use defy wallet because, if you use cefi wallet because most of the transactions you might be making will be coming from sources you don't have 100% trust in, and if any of them has negative reports, all your funds are at risk.
The cefi is mostly for crypto traders and it's best to avoid them if you are not into crypto trading.

This is part of the information I got from my research and from my little experience, i think binance works best for me.

[Winterfrost]

This is part of the information I got from my research and from my little experience, i think binance works best for me.

You say Binance works best for you, but Binace is a custodial wallet and it is not advisable. If your not having any trade going on but would love to save and store your coins in a wallet then it is best advised to store in a non-custodial wallet.

A custodial wallet, like Binance spot wallet, offers a service that owns the private key to your wallet and holds your assets in their custody. On the contrary, if you use a non-custodial wallet, you alone have complete control over your assets. MetaMask, Trustwallet to mention a few are examples of non-custodial wallets. When you have a small amount of assets with you then its not a bad idea to leave your asset there because its not too risky.

A non-custodial wallet puts you in full control. You’re responsible for security, and if you lose the wallet no worries, as long as you have your security “keys” saved somewhere. As long as you did not take a pic or saved it in an email or shared it with anyone then your safe.

[Hatchy]

This is part of the information I got from my research and from my little experience, i think binance works best for me.

Well op, I think you need to research more, if you just stated that using Centralized wallets to store funds is unsafe and you literally are using binance to store yours. I think you are forgetting the popular Saying, NOT YOUR KEY NOT YOUR COIN
Well to clear things up for you, here's a quote that shows a list of cex exchanges that has experienced huge hacks in the past, and to be clear binance is one of them.

This is a good reference point especially for new investors who believe that it is a good idea to keep your money on exchanges. Exchanges should be used only for what the name suggests - the exchange of currency A to currency B and once that is done the money should be withdrawn to a safe device. 

For better visibility I am going to add the list of hacked exchanges so it's visible in this thread as well. I think it is important as there are many well known names in that list.

Code:

 Exchange  		Year        	Amount / Month  	 Amount / Coin 			Founders			              	 
✔️ Bitcoin7    		2011 <      	50.000 $ October	  5.000 / BTC		
✔️ Mt.Gox      		2011 <       8.750.000 $ June	  	  2.000 / BTC           Jed McCaleb / Mark Karpeles
✔️ Bitcoinica  		2012 <         228.000 $ March	 	 43.550 / BTC	
✔️ Bitcoinica  		2012 <          87.000 $ May	 	 18.540 / BTC
✔️ Bitcoinica  		2012 <         300.000 $ July	 	 40.000 / BTC
✔️ Bitfloor    		2012 <         250.000 $ September 	 24.000 / BTC   	    Roman Shtylman        
✔️ PicoStocks  		2013 <       3.000.000 $ November	  6.000 / BTC	
✔️ Vircurex		2013 <         160.000 $ May	  	  1.450 / BTC
✔️ BTER        		2014 <       1.065.000 $ August                 / NXT
✔️ BitPay      		2014 <       1.800.000 $ December         5.000 / BTC
✔️ Bitcurex    		2014 <               ? $ March                  /
✔️ Cryptsy     		2014 <       9.500.000 $ July	 	 11.325 / BTC
✔️ Cryptorush  		2014 <         570.000 $ March		        /
✔️ KipCoin     		2014 <         690.000 $ October                /
✔️ MintPal     		2014 <       1.300.000 $ October                /
✔️ Mt.Gox      		2014 <     460.000.000 $ February	650.000 / BTC		Jed McCaleb / Mark Karpeles
✔️ Poloniex    		2014 <          64.000 $ March	     	     97 / BTC		   Tristan D'Agosta
✔️ LocalBitcoins 	2015 <		     ? $ January	     17 / BTC
✔️ 796Exchange 		2015 <         230.000 $ January	  1.000 / BTC	
✔️ BTER        		2015 <       1.750.000 $ February	  7.170 / BTC
✔️ Bitcurex    		2016 <       1.500.000 $ October          2.300 / BTC
✔️ Bitstamp    		2015 <       5.200.000 $ January	 19.000 / BTC	 	    Merlak brothers
✔️ Bitfinex    		2016 <      77.000.000 $ August	        119.700 / BTC		    Rafael Nicole
✔️ Gatecoin    		2016 <       2.140.000 $ May	            250 / BTC
✔️ ShapeShift  		2016 <         230.000 $ April	            469 / BTC	
✔️ Bithumb     		2017 <      30.000.000 $ February		/ Crypto		Kim De Shi
✔️ YoBit      		2017 <       5.300.000 $ April                  /
✔️ Yapizon     		2017 <       	       $ April            3.816 / BTC
✔️ EtherDelta     	2017 <       	       $ April                  /
✔️ Okex      		2017 <               ? $ August               ? / BTC
✔️ Coinis      		2017 <               ? $ September            ? / BTC
✔️ YoBit      		2017 <             17% $ December               /
✔️ Bancor      		2018 <      23.000.000 $ July		        /			Guy Benarzi
✔️ Coincheck   		2018 <     500.000.000 $ January		/ NEM		Koichiro Wada, Yusuke Otsuka
✔️ BitGrail    		2018 <     187.000.000 $ February		/ Nano		    Francesco Firano
✔️ Zaif        		2018 <      60.000.000 $ September              / 
✔️ Coinrail    		2018 <      40.000.000 $ June		        / Crypto		Lee Nuss
✔️ Cryptopia		2019 <	    16.000.000 $ January	        /			twitter.com/Cryptopia_NZ/status/1085084168852291586
✔️ Liqui Crypto		2019 <		Closed $ January	      Closed			cointelegraph.com/news/ukrainian-crypto-exchange-liqui-shuts-down-cites-lack-of-liquidity
✔️ QuadrigaCX		2019 <	   145.000.000 $ January	      Closed			cointelegraph.com/news/crypto-exchange-qaudrigacx-goes-offline-claims-maintenance-issues
✔️ Coinmama		2019 <		       $ February	450.000 / emails+passwords	www.ccn.com/exchange-coinbene-swears-it-wasnt-hacked-traders-fear-the-worst
✔️ DragonEx		2019 <		       $ March		 Waiting for more info.		www.coindesk.com/singapore-based-crypto-exchange-dragonex-has-been-hacked
✔️ Coinbene		2019 <		       $ March		 Waiting for more info.		blockonomi.com/coinbene-hacked-exchange-says-not/
✔️ Bithumb		2019 <	  Waiting info.$ March	      3.000.000 / EOS			cointelegraph.com/news/crypto-exchange-bithumb-reportedly-hacked
✔️ Binance		2019 <	    41.000.000 $ May		  7.000 / BTC			cointelegraph.com/news/hackers-withdraw-7-000-bitcoins-in-binance-crypto-exchange-security-breach
✔️ GateHub		2019 <	    10.000.000 $ June		    	/ XRP			cointelegraph.com/news/report-nearly-10-million-in-xrp-stolen-in-gatehub-hack
✔️ Bitrue		2019 <	     5.000.000 $ June		    	/ 			cointelegraph.com/news/singaporean-exchange-bitrue-gets-hacked-losing-5-million-in-xrp-cardano
✔️ Bitsane		2019 <	     	       $ June		    	/ 			cointelegraph.com/news/exit-scam-dublin-based-exchange-bitsane-vanishes-with-users-funds
✔️ Bitcoins Norway	2019 <	     	       $ June		    	/ 			news.trijo.co/news/norwegian-crypto-exchange-wants-to-force-users-to-sell-their-cryptocurrencies/?lang=en
✔️ BitMarket		2019 <	     	       $ June		    	/ 			cointelegraph.com/news/polish-crypto-exchange-bitmarket-shuts-down-citing-liquidity-loss
✔️ Bitpoint		2019 <	    32.000.000 $ July		    	/ 			cointelegraph.com/news/japanese-crypto-exchange-bitpoint-suffers-32-million-hack

Source:
https://bitcointalk.org/index.php?topic=5090869.0

And again, Trust wallet is not a safe wallet for your funds, so you might consider removing it from your list and replacing it with some other secured wallets Like Mycelium or Electrum

[Hewlet]

Well to clear things up for you, here's a quote that shows a list of cex exchanges that has experienced huge hacks in the past, and to be clear binance is one of them.

This is a good reference point especially for new investors who believe that it is a good idea to keep your money on exchanges. Exchanges should be used only for what the name suggests - the exchange of currency A to currency B and once that is done the money should be withdrawn to a safe device.  

For better visibility I am going to add the list of hacked exchanges so it's visible in this thread as well. I think it is important as there are many well known names in that list.

Code:

 Exchange  		Year        	Amount / Month  	 Amount / Coin 			Founders			              	 
✔️ Bitcoin7    		2011 <      	50.000 $ October	  5.000 / BTC		
✔️ Mt.Gox      		2011 <       8.750.000 $ June	  	  2.000 / BTC           Jed McCaleb / Mark Karpeles
✔️ Bitcoinica  		2012 <         228.000 $ March	 	 43.550 / BTC	
✔️ Bitcoinica  		2012 <          87.000 $ May	 	 18.540 / BTC
✔️ Bitcoinica  		2012 <         300.000 $ July	 	 40.000 / BTC
✔️ Bitfloor    		2012 <         250.000 $ September 	 24.000 / BTC   	    Roman Shtylman        
✔️ PicoStocks  		2013 <       3.000.000 $ November	  6.000 / BTC	
✔️ Vircurex		2013 <         160.000 $ May	  	  1.450 / BTC
✔️ BTER        		2014 <       1.065.000 $ August                 / NXT
✔️ BitPay      		2014 <       1.800.000 $ December         5.000 / BTC
✔️ Bitcurex    		2014 <               ? $ March                  /
✔️ Cryptsy     		2014 <       9.500.000 $ July	 	 11.325 / BTC
✔️ Cryptorush  		2014 <         570.000 $ March		        /
✔️ KipCoin     		2014 <         690.000 $ October                /
✔️ MintPal     		2014 <       1.300.000 $ October                /
✔️ Mt.Gox      		2014 <     460.000.000 $ February	650.000 / BTC		Jed McCaleb / Mark Karpeles
✔️ Poloniex    		2014 <          64.000 $ March	     	     97 / BTC		   Tristan D'Agosta
✔️ LocalBitcoins 	2015 <		     ? $ January	     17 / BTC
✔️ 796Exchange 		2015 <         230.000 $ January	  1.000 / BTC	
✔️ BTER        		2015 <       1.750.000 $ February	  7.170 / BTC
✔️ Bitcurex    		2016 <       1.500.000 $ October          2.300 / BTC
✔️ Bitstamp    		2015 <       5.200.000 $ January	 19.000 / BTC	 	    Merlak brothers
✔️ Bitfinex    		2016 <      77.000.000 $ August	        119.700 / BTC		    Rafael Nicole
✔️ Gatecoin    		2016 <       2.140.000 $ May	            250 / BTC
✔️ ShapeShift  		2016 <         230.000 $ April	            469 / BTC	
✔️ Bithumb     		2017 <      30.000.000 $ February		/ Crypto		Kim De Shi
✔️ YoBit      		2017 <       5.300.000 $ April                  /
✔️ Yapizon     		2017 <       	       $ April            3.816 / BTC
✔️ EtherDelta     	2017 <       	       $ April                  /
✔️ Okex      		2017 <               ? $ August               ? / BTC
✔️ Coinis      		2017 <               ? $ September            ? / BTC
✔️ YoBit      		2017 <             17% $ December               /
✔️ Bancor      		2018 <      23.000.000 $ July		        /			Guy Benarzi
✔️ Coincheck   		2018 <     500.000.000 $ January		/ NEM		Koichiro Wada, Yusuke Otsuka
✔️ BitGrail    		2018 <     187.000.000 $ February		/ Nano		    Francesco Firano
✔️ Zaif        		2018 <      60.000.000 $ September              / 
✔️ Coinrail    		2018 <      40.000.000 $ June		        / Crypto		Lee Nuss
✔️ Cryptopia		2019 <	    16.000.000 $ January	        /			twitter.com/Cryptopia_NZ/status/1085084168852291586
✔️ Liqui Crypto		2019 <		Closed $ January	      Closed			cointelegraph.com/news/ukrainian-crypto-exchange-liqui-shuts-down-cites-lack-of-liquidity
✔️ QuadrigaCX		2019 <	   145.000.000 $ January	      Closed			cointelegraph.com/news/crypto-exchange-qaudrigacx-goes-offline-claims-maintenance-issues
✔️ Coinmama		2019 <		       $ February	450.000 / emails+passwords	www.ccn.com/exchange-coinbene-swears-it-wasnt-hacked-traders-fear-the-worst
✔️ DragonEx		2019 <		       $ March		 Waiting for more info.		www.coindesk.com/singapore-based-crypto-exchange-dragonex-has-been-hacked
✔️ Coinbene		2019 <		       $ March		 Waiting for more info.		blockonomi.com/coinbene-hacked-exchange-says-not/
✔️ Bithumb		2019 <	  Waiting info.$ March	      3.000.000 / EOS			cointelegraph.com/news/crypto-exchange-bithumb-reportedly-hacked
✔️ Binance		2019 <	    41.000.000 $ May		  7.000 / BTC			cointelegraph.com/news/hackers-withdraw-7-000-bitcoins-in-binance-crypto-exchange-security-breach
✔️ GateHub		2019 <	    10.000.000 $ June		    	/ XRP			cointelegraph.com/news/report-nearly-10-million-in-xrp-stolen-in-gatehub-hack
✔️ Bitrue		2019 <	     5.000.000 $ June		    	/ 			cointelegraph.com/news/singaporean-exchange-bitrue-gets-hacked-losing-5-million-in-xrp-cardano
✔️ Bitsane		2019 <	     	       $ June		    	/ 			cointelegraph.com/news/exit-scam-dublin-based-exchange-bitsane-vanishes-with-users-funds
✔️ Bitcoins Norway	2019 <	     	       $ June		    	/ 			news.trijo.co/news/norwegian-crypto-exchange-wants-to-force-users-to-sell-their-cryptocurrencies/?lang=en
✔️ BitMarket		2019 <	     	       $ June		    	/ 			cointelegraph.com/news/polish-crypto-exchange-bitmarket-shuts-down-citing-liquidity-loss
✔️ Bitpoint		2019 <	    32.000.000 $ July		    	/ 			cointelegraph.com/news/japanese-crypto-exchange-bitpoint-suffers-32-million-hack

Source:
https://bitcointalk.org/index.php?topic=5090869.0

And again, Trust wallet is not a safe wallet for your funds, so you might consider removing it from your list and replacing it with some other secured wallets Like Mycelium or Electrum

Thanks a lot for this additional piece of review. My thought process is to learn a particular crypto-related topic and share my idea with the house so I get refined information for a better decision making through your contributions.

[Pmalek]

In your OP, you are talking about which wallet to download to store your coins, but then you suggest Binance, Bybit, etc. These are not software wallets you need to download on your device. They are custodial online exchanges that you access with your email + password combination without downloading software.

But there is a bigger problem here. You are mistaking the terms decentralized wallet and non-custodial wallet. You have mentioned Trust Wallet and Exodus as examples of decentralized wallets. These wallets are not decentralized but they are non-custodial. In both examples, you connect to their servers, and without this server or a backup, you wouldn't be able to use the wallet. So, they are centralized.

Examples of decentralized wallets are Bisq, Electrum, Bitcoin Core, or Ethereum DEXs like Uniswap, Sushiswap, etc. These don't rely on servers operated by their people that you have to connect to to be able to use them. With Bisq, you connect to other people P2P. Electrum has community-run servers and you can connect to any one of them. If one is offline, you can use a different one. The wallet is never offline unless not a single server is online, which has never happened. If Trust Wallet's server's are down, you can't use Trust Wallet.     

[un_rank]

1. Cefi (centralized finance) wallet: ...I think the main reason why people use this kind of wallet is basically due to the high security they provide for your crypto and also because of other trading services like p2p, sports and future trading.

These types of wallet does not have high security cause there has been so many cases of hacks on different exchange wallets. You also cannot verify their security process cause they are closed source.

2. Defi (decentralized finance) wallet : ...the defi wallet has it disadvantage which is that, you are the one responsible for your security. If for any reason you loose your recovery key, your funds are all gone.

This is an advantage of non custodian wallets. In a decentralized system you should not centralize storage. Being responsible for your funds allows you to adopt maximum security practices, like multiple backup locations, airgapped device and so on.

Example of defi (decentralized platforms) are; trust wallet, exodus, meta mask etc.

Trust wallet is closed source and not a good example of a wallet to use here.

- Jay -

[cryptoaddictchie]

if you use cefi wallet because most of the transactions you might be making will be coming from sources you don't have 100% trust in, and if any of them has negative reports, all your funds are at risk.
The cefi is mostly for crypto traders and it's best to avoid them if you are not into crypto trading.

Well aside from trading, there are cefi products on other platform to enjoy with like staking, joining launchpads, loan from assets, and sometime some airdrops. Yes there are also available on some exchanges and the only worse thing that could happened on that is if you didnt able to withdraw your funds or the exchange got hacked. Yes its quite risky and thats how it roll, so having funds on your non custodial is also a good move.

[OcTradism]

There is overlap between CeFi and DeFi for their users. If you use a DeFi platform with their services like staking, you no longer control your coins. After locking your coins in their staking pools or liquidity pools, you waive up your control on your coins.

Three Arrows Capital, Celsius are good examples of non decentralized DeFi projects that caused massive losses on their customers.

How Much Funding did Each Crypto Sector Raise Every Year?. This is an old article but it mentioned a failed, bankrupted centralized exchange, FTX and it is a good example for a corrupted centralized exchange.

[Jawhead999]

Even non custodial wallet looks more safe because you hold your private key, but you're suggested the closed source wallet. If the source isn't transparent, there's a possibility the wallet isn't safe since the developer can add malicious script.

Example of the cefi wallet are 1. Binance, bybit block chain, coinbase etc

Not entirely correct, although Blockchain.info/com were very known with their centralized exchange, but few years ago they already have their own non custodial wallet [1].

[1] https://www.blockchain.com/wallet

[TakeItEasy]

If you're someone new in the online space, and you're considering the right wallet to download for saving of funds, you need to understand what cefi (centralized finance) and defi(decentralized finance) wallet means and also know which is the best option for you to use.

I'm personally using both of them but I prefer some of them, whether an exchange or a wallet may scam we can't say all the wallets will be like this, as this is my personal experience. Binance I'm using as a cefi wallet and I prefer it for the other users due to its security system as it is quite strong and impressive as well. On the other hand, it is used as the World Top Exchange.
 
While in the Defi Wallet, I prefer Metamask, we can add even different networks through it, firstly I was using Trustwallet when I was new to crypto but after some time I started to use Metamask as a Defi wallet, and it helped me a lot, it is very simple to use. Although there are many more we can use. But still prefer Metamask, as for the new user it is understandable.

[Crypt0Gore]

There is nothing anyone is going to tell me about people in the crypto space, some people will still find their reasons to use a centralized crypto wallet to store their funds and also some are still storing their assets on crypto exchange till date, they see other people who get wrecked but they don't learn from their mistakes.

It costs me a lot in the past days when I was still a beginner, I used some very bad unreliable wallet to store my first set of crypto assets and they moved my fund out without notifying me, why won't anyway? I have no access to my private keys or recovery seed because I don't even know what these are.

After I lost my coins that's where I started to get curious and do research on crypto wallet, I saw that I was the one who is at fault for trusting custodial wallets with my assets, I feel ashamed for not doing my own research from the first day which would have safe myself from the mistakes.

[Zaguru12]

I'm personally using both of them but I prefer some of them, whether an exchange or a wallet may scam we can't say all the wallets will be like this, as this is my personal experience. Binance I'm using as a cefi wallet and I prefer it for the other users due to its security system as it is quite strong and impressive as well. On the other hand, it is used as the World Top Exchange.

Yes every wallet or exchange can be hacked but the vulnerability of an exchange greatly outweighs that of a proper wallet. Just like you have prefer others to use it I would advice others to desist from it. Most especially storing their coins on it. The risk rans beyond just losing your privacy but also the coins stored in them are greatly at risk and should they decide to rug pull they would easily do that by just blaming hackers. Binance also is not secure even though CZ made you to believe so. Been the leading exchange due to number of users doesn’t prove how secure you are, Mt.Gotx was once more popular and superior but they fell to the hand of hackers which made many to lose their money and up till now they can recover from that loss. Another example of trusting exchange is the saga surrounding the collapsed FTX exchange. I will advise you read about them and draw your conclusions and probably you will get cleared that Profit earning is the major priority of exchanges and not the safety of your funds.

While in the Defi Wallet, I prefer Metamask, we can add even different networks through it, firstly I was using Trustwallet when I was new to crypto but after some time I started to use Metamask as a Defi wallet, and it helped me a lot, it is very simple to use. Although there are many more we can use. But still prefer Metamask, as for the new user it is understandable.

Both the Metamask and Trustwallet are not advisable to use because of them been a closer source and kind of too centralized. They take decisions without having to have the opinion of the users, who knows how your seed phrase and private key from them are used, probably they have a copy too. For bitcoin only wallet you have the electrum and the BlueWallet, and for multi coin wallet you can use the Unstoppable wallet, they are all open source