Know why the exchange wallet are not safe

[Su-asa]

What if we discuss this important thing concerning crypto currencies, investors and social media platforms? However, some discussion might have been concerning this dissertation, but it will be good if we keep on talking about them so that we will know and not get involved in any of them.
Some of us might be running from crypto scams from scammers on social media platforms. Wow, that's good, but that's not all.
We can keep a safe distance from scammers when we have protected our coins first. We can only protect our coins through 2 means.

1. protecting our seed phrase: We can start protecting our coins the first day we protect our seed phrase. It is very important to do this, because with this seed phrase, we can no longer access our Bitcoin when we don't have any means to log in to our Bitcoin wallet.

2. Do  not keep bitcoin in an exchange wallet: This is also important to be aware of. A lot of people only think that after protecting their seed phrases, their coins are secured.

However, if you do so, it can be secured when you store it in a safe wallet like an electrum. A Bitcoiner might think that he can not get scammed if he did not click on suspicious links on social media, but that's not all. One thing is to keep your bitcoins in a good wallet and protect them. What if you keep your coins in an exchange wallet and you try to protect your coins and then the exchange collapses? There will be no way to get back your bitcoins. That's why I have said earlier that storing Bitcoin in a secured wallet and protecting your seed phrases are some good ways to protect your Bitcoin. Instead of keeping them in an exchange wallet.

[Findingnemo]

You are dragging too much for what you wanted to convey.

Exchanges don't give us private keys for the addresses and exchanges can be hacked or run away with our cryptos are the two primary reasons why you should not keep your coins in exchange.

P.S: Are these typos "we can no longer access our Bitcoin" and "Do Don't keep bitcoin in an exchange wallet"?

[I_Anime]

I won't advice any one to keep their asset in cex account. Purchase your coin and send it to a Dex account asap, Holding your coins in a cex account is like given someone else to help you to hold your funds and not just that it can easily be a target for scammers to penetrate and run with your funds. Or the exchange may endup With bankruptcy ( like  FTX Due to mishandling of customer funds) and your funds will go down with them so is better to save your asset in a Dex account knowing that your funds is in your hands.

Cex account don't use seed phrases just keep as findingnemo said they only use password you input yourself, that one advantage about cex account whenever you lose your password you can go for forgotten password as long you still have that particular eMail you used in registration while Dex account uses seed phrase which you cannot retrieve back when you lose it. That why most users here keep on saying you should mind the way you keep your seed phrase and always keep it in location you can easily access

[hosseinimr93]

2.Do keep bitcoin in an exchange wallet:

Don't keep your Bitcoin on an exchange.
Fix the typo.

However, if you do so, it can be secured when you store it in a safe wallet like an electrum.

If you want your fund to be completely secure, you should use an open source trustworthy wallet like electrum on an air-gapped device.
Take note that any online device is always prone to hacking. If you use electrum on an online device, there's still the chance that your device is infected with a malware and your wallet gets hacked.

[Lida93]

1. protecting our seed phrase:
2. Do keep bitcoin in an exchange wallet:.

Op after telling us  about making sure to secure our seed phrase I was expecting you were going to spelt out method's with which we can securely store our seed phrase but since you didn't maybe I should  give one for newbies that may be needing it.
Bitcoin metal seed storage

Leaving our coins in an exchange is similar to the risk of leaving our money in traditional banks, where they  have to dictate the term of how and when we can have access to our money. Any bankruptcy is a total loss to you. To have total financial freedom  and control of your asset making use of non-custodial wallets like electrum is what every bitcoin holder should  not compromise. Your seed phrase is equivalent to your coins and whoever holds it originally owns the coins in a wallet that is why it should be secured and known only to just you.
TUTORIAL: How to use Electrum (for beginners)

[EL MOHA]

Cex account don't use seed phrases just keep as findingnemo said they only use password you input yourself, that one advantage about cex account whenever you lose your password you can go for forgotten password as long you still have that particular eMail you used in registration while Dex account uses seed phrase which you cannot retrieve back when you lose it. That why most users here keep on saying you should mind the way you keep your seed phrase and always keep it in location you can easily access

The problem is there are  some centralized exchanges that do have an in built wallet apart from the exchange platform it self this one gives you the seed phrase example is the OKX exchange and wallet. But the same thing still relates how do we know what happens to the seed phrase when the exchange itself is closed source we don’t know maybe they have copies of it and with the recent hacking issue then it would be possible to get access to those keys or seeds example is the use of TrustWallet which also closed source wallet.

Another thing is most Decentralized exchanges do not even allow to store your coins on the exchange most especially the swap exchanges they simply wants you to connect the wallet the coins are stored in with the exchange through the DApp of that wallet

[Alpha Marine]

Not being in total control of your coins is one reason to avoid CEX, but another reason is your privacy.
With a non-custodial wallet, you don't need any form of KYC. You don't need any personal information whatsoever. No one is even going to ask you for an email. That makes you completely anonymous.
Nobody has to decide how you spend your money or when.
Giving out your personal details to third parties is risky.

Isn't it fascinating that we have an opportunity to send money directly to another person without any intermediary? Nobody has to know how much you have and how much you give to a person. All they'll see is an address sending Bitcoin to another address.

[hosseinimr93]

With a non-custodial wallet, you don't need any form of KYC. You don't need any personal information whatsoever. No one is even going to ask you for an email. That makes you completely anonymous.

Completely anonymous? Not really.

You can't protect your anonymity and your privacy, just with using a non-custodial wallet.
When you use a non-custodial SPV wallet like electrum, you have to connect to a server for giving data from a node and broadcasting your transactions. With connecting to the server, you reveal your IP address to a third party.

[m2017]

~snip

Everything that you described in the long read in your post could have been stated briefly. All types of crypto storage are unsafe unless you have sole access to the wallet (seed phrase). That's why it's like this "the exchange wallet are not safe".

[Nwada001]

The truth of the entire matter is: don't trust any third-party provider; trust only yourself; don't give out access even to your personal wallet because that won't guarantee your wallet's safety. Exchanges are only meant for trading and exchanging of coins and not as storage; it's only those who are lazy that will consider using exchanges as a means of holding.
 
Even exchange wallets that they claim to be noncustodial wallets and some that have been proven to be safe, I don't trust them, as we never can tell what's behind their seed phrase generation and the level to which you have access to that wallet.
 
Self-custodial wallets, which are also open source and hardware, are publicly advisable for long-term storage, but those are just wallets. The level to which your funds are going to be safe mainly depends on how careful you are with securing your wallet. You can still have full control over your holdings and still lose them if you don't take security measures seriously.

[Dimitri94]

Holding assets in an exchange wallet means that you are giving away your money to someone else. But you should know how safe the one you have given money. Because we often hear various information about the hack of Exchange site. Major exchanges have also admitted to being hacked. So it cannot be completely trusted and is not possible.

When a holder places his assets in an exchange wallet, his assets are liable to a third party in case there is a possibility of losing his assets at any time. Moreover, if an exchange engages in fraud with its customer, the customer has nothing to do.

An exchange wallet may also be subject to various government restrictions. As a result, the customer's assets will be at risk there.

So one should definitely avoid using exchange wallets.

[moneystery]

storing assets in a wallet such as electrum or safepal is better than the wallet provided by the exchange. using a custodial wallet means that holders have full access to their bitcoins, where they can manage or transact their bitcoins easily and quickly.

but if holders use a wallet provided by the exchange they don't get the private key to access it and they can't fully manage the assets from their account. the risk is also that the exchange could collapse at any time and that would impact all the assets that users have and no one wants something like this.

and for this reason using a custodial wallet is more recommended for holders because they have full access to the assets they store in the wallet. even though users need to secure the private key and that is quite tricky, this should not be an obstacle for the user.

[Findingnemo]

With a non-custodial wallet, you don't need any form of KYC. You don't need any personal information whatsoever. No one is even going to ask you for an email. That makes you completely anonymous.

Completely anonymous? Not really.

You can't protect your anonymity and your privacy, just with using a non-custodial wallet.
When you use a non-custodial SPV wallet like electrum, you have to connect to a server for giving data from a node and broadcasting your transactions. With connecting to the server, you reveal your IP address to a third party.

For someone using exchange as their wallet, the non-custodial wallets look like completely anonymous but it's true that we don't need to provide any identity to get our bitcoin wallets but then when we connect to third-party servers our IP address will be leaked to the connected server and its possible to track the real location even identity.

That is why when someone is thinking non custodial wallet is the best way to store their crypto then they also should consider running their own node.

[hosseinimr93]

That is why when someone is thinking non custodial wallet is the best way to store their crypto then they also should consider running their own node.

If you run your own node, you would no longer need to connect to servers run by third parties and you can protect your privacy, but if your purpose is only to hide your IP address, you can use TOR connection or VPN and still use SPV wallets and connect to servers run by third parties.

[Wakate]

Holding assets in an exchange wallet means that you are giving away your money to someone else. But you should know how safe the one you have given money. Because we often hear various information about the hack of Exchange site. Major exchanges have also admitted to being hacked. So it cannot be completely trusted and is not possible.

When a holder places his assets in an exchange wallet, his assets are liable to a third party in case there is a possibility of losing his assets at any time. Moreover, if an exchange engages in fraud with its customer, the customer has nothing to do.

An exchange wallet may also be subject to various government restrictions. As a result, the customer's assets will be at risk there.

So one should definitely avoid using exchange wallets.

Yes, it is true that exchange wallet can be subjected to any government restrictions but you also need to understand some of the benefits that are attached to having a coin in an exchange wallet. You don't have to teach us some mere things everyone supposed to be aware of looking at the risks affiliated to it.
 If you want to buy a coin maybe the one that would soon launch soon, how are you going to go about it if the coin is not available on decentralized platform? How do you intend to trade and make some profits for yourself with selling your coins out? Maybe you should have a rethink and stop telling us things that are already known to every traders and investors. You can keep your coin to yourself and never send it out.

[MFahad]

This topic has been discussed time and time again, and I don't see you making any contribution to the discussion since you are simply repeating what has been said a thousand times already. I don't say you are wrong, you are right that one should never keep their assets in an exchange, especially if they have a large value, and one should keep their seed phrase and private keys safe. However, this has been said many times already.
Safest way to keep your Bitcoins or cryptocurrencies in general is to buy and use a hardware wallet so that your wallet doesn't stay online because online wallets are mostly more vulnerable to hacks and exploits.

[Huppercase]

1. protecting our seed phrase: We can start protecting our coins the first day we protect our seed phrase. It is very important to do this, because with this seed phrase, we can no longer access our Bitcoin when we don't have any means to log in to our Bitcoin wallet.

Not just protecting your seed phrase to know how to use it when you want, also know that it is important to make sure no one have access to it. You can be hiding your seed phrase where someone will see, they might not steal it but it can be copied and that's all. Therefore, make sure you are the only that have access to your seed phrase by hiding them in a secrete place where only you will have access to.

2. Do  not keep bitcoin in an exchange wallet: This is also important to be aware of. A lot of people only think that after protecting their seed phrases, their coins are secured.

Exchange wallets don't have seed phrase, your bitcoin will be in the exchange total control if you keep them in the exchange. Take exchanges as a market places where you will only buy and sell, keeping your bitcoin with them is very risky because you have no control of them.

However, if you do so, it can be secured when you store it in a safe wallet like an electrum. A Bitcoiner might think that he can not get scammed if he did not click on suspicious links on social media, but that's not all. One thing is to keep your bitcoins in a good wallet and protect them. What if you keep your coins in an exchange wallet and you try to protect your coins and then the exchange collapses? There will be no way to get back your bitcoins. That's why I have said earlier that storing Bitcoin in a secured wallet and protecting your seed phrases are some good ways to protect your Bitcoin. Instead of keeping them in an exchange wallet.

In general.
Avoid clicking phishing links.
Not your keys, not your coins.

[aylabadia05]

In essence, exchanges are not wallets for storing assets. The exchange does not provide seed phrases or private keys to asset owners.
Freedom is theirs and not ours. The assets stored on the exchange do not belong to us, but to them.
Why is it not safe, for the reasons I have mentioned.
To be safe, use a wallet that is controlled by the asset owner. Choose a wallet that is open source and has been tested.

[Saint-loup]

To be honest, I don't think that's so simple. You can also keep your fiat cash money or gold at home. But how many people do that? They are afraid of being robbed or to lose their banknotes in a fire of their home, that's why they prefer to leave their money at banks even if they've to pay for that. For Bitcoin risks of losing funds are even higher, because thieves can steal your money from you remotely, and your seed doesn't need a fire to be lost or destroyed. So IMO when banks will accept cryptos or when exchanges will be older, you will see more people using their services to store their cryptos.

[SatoPrincess]

2. Do  not keep bitcoin in an exchange wallet: This is also important to be aware of. A lot of people only think that after protecting their seed phrases, their coins are secured.

Point of correction. Exchanges do not give users their seed phrase or private keys. The exchange holds full custody of your bitcoins. This is why we say “Not your keys, Not your coins”.

There are dozens of threads on why it’s not a good idea to store coins on exchanges;

Reminder: do not keep your money in online accounts
Binance & Nigerian; Most recent development on frozen funds without prior notice
Recent events should make everyone withdraw all their coins to their own wallets
Recent events should make everyone withdraw all their coins to their own wallets: Part 2
Recent events should make everyone withdraw all their coins to their own wallets: Part 3