Are cold wallets safer than online exchanges?

[royalfestus]

With a cold wallet, you have full control over your cryptocurrency, eliminating the need to rely on a third party for security. In contrast, online exchanges act as custodians, holding your cryptocurrency on your behalf.

[Issa56]

If you had a large amount of cryptocurrency would you prefer to keep it on an offline cold wallet or an online cryptocurrency exchange?

It has been said multiple times on the forum here that coins shouldn’t be stored on exchange. If you store a coin on exchange, then it means you are not totally in control of your money and you can lose your coin at any moment, because no matter how reputable an exchange is, anything can happen to it at any moment. We have all seen different exchanges fail us in the past, and we should be expecting more in the future, so people will be losing money. The only time I do recommend that people leave their money on exchange is when they are trading with the money, but if you are not trading, then your funds should be in an offline wallet.

[Stalker22]

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I'm interested to hear the thoughts of others.

I noticed you just joined our forum  - welcome! With a fresh set of eyes, you likely havent had the chance yet to poke around previous threads on securing your crypto holdings.  So let me drop some wisdom real quick. 

Cold storage wallets? Definitely the move for stacking sats long-term.  Exchanges make sense for active trading because convenience.  But for hodling? Nuhuh.  Not your keys, not your cheese!

If you are just dipping your toe into crypto, Id take a scroll through old threads about cold storage and hot versus cold wallets.  Plenty of handy know-how already up in here to help a newcomer.

Stay curious my friend!

[lalabotax]

If you had a large amount of cryptocurrency would you prefer to keep it on an offline cold wallet or an online cryptocurrency exchange?

Both have pros and cons.

I'm interested to hear the thoughts of others.

Choosing wallets must be done carefully and precisely, because this is related to the security of our assets and is also related to the possible fees that we will incur.

Well, if the condition is that I have a lot of assets and it is for long-term investment, then I would much prefer cold wallets or offline wallets to hot wallets. Because this is related to the security system and also control of our assets. In Cold wallet, we store our own exchange and it is offline so it will be much safer than holding them in any exchange. which means that online swallows or exchanges can cause various types of cyber crimes, which of course has also become one of the things to be wary of.

See and read or learn the following source taken to add more knowledge about hot wallets vs cold wallets.

More information about hot vs cold wallets can be read here:
https://thegww.com/hot-wallet-vs-cold-wallet-which-is-right-for-you/

[nelson4lov]

The answer is that, it depends. It depends on what your intentions are with the assets. If you want the asset to be readily available when you need it without the need to access the wallet, acquire some other BTC / or gas if EVM to send out the asset in question, then it's an online exchange. But if you simply want to keep it and hold, then you should really opt for a cold wallet. The biggest drawdown with storing it directly on an exchange is that the exchange could close up at any time and there is nothing you can do about it. Nada. But with a cold wallet, you have full control and access to it at any time possible.

So here's my TLDR version.

• If you want it to be readily available and on demand, then store on an exchange.
• But if you're just going to hold it for a long time and not move it around a lot, definitely recommend a cold wallet

[Raflesia]

Actually things like this may go back to their respective perspectives but indeed when talking about security I think everyone will agree that a cold wallet will be much more worth it than a wallet that has been provided by an online exchange considering that at least we don't have to worry that the assets we have are controlled or can be supervised by the exchange unless you want to try trading so the exchange will definitely be an option but when it is an investment then it will indeed be more worth it if it is stored in a cold wallet in the end.

But that does not mean that cold wallets will also directly avoid some fraud syndicates or hacks because after all about security issues in the end it is always a problem that is always discussed where we must realize that security problems depend on our foresight because even if it is stored in a hard wallet, cold wallet or exchange wallet even as long as you are negligent then it could endanger your assets.

[Z-tight]

If you had a large amount of cryptocurrency would you prefer to keep it on an offline cold wallet or an online cryptocurrency exchange?

Both have pros and cons.

What are the cons of storing a large amount of your coins in cold storage, i do not know of any cons, but only pros. Your money is in your control, it is safe if you know what you are doing, it is off the internet and not vulnerable to online attacks, etc. It is recommended to store your funds in an offline wallet, and only hold funds for spending on the go in your online wallet.

However, a crypto exchange should be used for trading only and shouldn't hold any of your funds for longer than the time you are trading.

[Ojima-ojo]

If you had a large amount of cryptocurrency would you prefer to keep it on an offline cold wallet or an online cryptocurrency exchange?

Both have pros and cons.

I'm interested to hear the thoughts of others.

Yes if I have large amount of assets such as bitcoin, I will rather store them on a hot wallet where I have total control of the wallet, most especially if I intend to keep them for a long term.


Sometimes one can buy bitcoin and keep it for let say 10 year without looking back to the wallet or how much it have generated, this way it a risk to save such bitcoin on an excahge wallet, so for long term holding, personal custodial wallet is the best choice.

[AmoreJaz]

Yes if I have large amount of assets such as bitcoin, I will rather store them on a hot wallet where I have total control of the wallet, most especially if I intend to keep them for a long term.
Sometimes one can buy bitcoin and keep it for let say 10 year without looking back to the wallet or how much it have generated, this way it a risk to save such bitcoin on an excahge wallet, so for long term holding, personal custodial wallet is the best choice.

It is always advisable to store your coins in a wallet where you have full control of it. Hence, the question of the OP should be very easy to answer. It is not recommended in any way to store your coins in a crypto exchange, even if it is the top 1 exchange.

As most of crypto users know - "not your keys, not your coins." You will understand such phrase when you happen to lose your coins in an exchange hack or similar events.

[Ben Barubal]

If you had a large amount of cryptocurrency would you prefer to keep it on an offline cold wallet or an online cryptocurrency exchange?

Both have pros and cons.

I'm interested to hear the thoughts of others.

     It is actually much safer to put your assets into a cold wallet. Now,  if you put your assets in a centralized exchange, just remember that you must also be prepared for the risk you may face because, in the first place, holding your assets is almost no different than putting money in the bank.

     That's why sometimes it seems like we don't have a choice and others don't know either. That's why others always say, Be careful and do it at your own risk.
And be prepared.

[Assface16678]

For me, it's better to store your assets where no one can access them, and you can protect your assets from different scenarios. Meanwhile, if you store your assets in an exchange, there are some bad things that could happen. If you have been targeted by hackers, your assets can be stolen, or if an exchange malfunctions, you cannot access your assets. Yes, there are still advantages to storing your assets in an exchange, but when it comes to safety, cold wallets are the best option. You are the only one who has control over or access to it, as the wallet in which it will be stored has a physical body. You can bring it anywhere and anytime, but of course, as it is physical, you will need to keep it safe because your wallet can still be lost or stolen. So it's up to the owners, but for me, a cold wallet is the best option if you have the capability to purchase it.

[GbitG]

If you had a large amount of cryptocurrency would you prefer to keep it on an offline cold wallet or an online cryptocurrency exchange?

Nope I would never prefer to keep my funds on an online Exchange. Because I already know that keeping funds on Exchange is nothing more than losing them, it has an almost 99% risk of being stolen, whether in the term of Exchange bankruptcy or a hacker attack. In both scenarios, you will fall victim to the loss of his funds. In spite of an offline cold wallet, you have been able to get rid of these two problems, namely, that neither your fund can be stolen easily nor you can be a victim of any hack easily.

Both have pros and cons.

I think there can be no pros except for taking trades. I mean That is, there is no other benefit to keeping funds on the exchange rather than trading. But keeping funds in exchange has too many cons

I'm interested to hear the thoughts of others.

My opinion is that you should keep your funds in offline cold-air-gap wallet. With which you can keep your fund under full control. When you are under the ownership of the exchanges, if he wants, he can steal your funds or even get stuck without asking you.

[OcTradism]

If you had a large amount of cryptocurrency would you prefer to keep it on an offline cold wallet or an online cryptocurrency exchange?

Both have pros and cons.

Your fund safety should be your most concern, more than convenience when you store your bitcoins on centralized exchanges.

Convenience is clear but does it worth to take risk of losing your bitcoins if that centralized exchange goes bankruptcy or scam?

Reminder: do not keep your money in online accounts

The vital point for your fund security is "It's not your private keys, it's not your bitcoins".

Bitcoin Q&A: Not your Keys, Not your Coins. This is a 15-minute video and watching it can help you to get answers for following important questions.

How is the public / private key pair stored in a wallet?
What is the difference between a mobile and web wallet?
What is the relationship between wallets and IP addresses?
Why are developers of Samourai and Wasabi wallet arguing?

Custodial surveillance wallets a bigger problem to avoid.

[pinggoki]

There's no pros when it comes to storing your bitcoin in an online exchange, that will only beget you with nothing but misery because once you do that, it's not your bitcoin anymore, it's the exchange's bitcoin now and they've got the power to just quit the exchange and run away with all the cryptocurrencies that they have or they get hacked and your account becomes one of the victims of that hack. Just go for the safest which is the cold wallet, if you've got tons of money, you want to make sure that you're securing it in a way that is impenetrable and only a human error on your side could be the cause of losses.

[Plaguedeath]

There's no pros when it comes to storing your bitcoin in an online exchange

Nah, there are:
1. Transaction are off-chain, you don't have to pay fees for miner when you want to sell or move your coins.
2. Maximize your profit, holding 1 BTC for few years and sell it will make you earn a good amount of profit, but staking 1 BTC and give you like extra +0.1 BTC will make you to earn more.

But, it doesn't mean I will suggest people to hold their coins in exchange. I'm just telling the truth, if there are no pros, most people will avoid it, but we know most people hold in exchange.

[SquirrelJulietGarden]

1. Transaction are off-chain, you don't have to pay fees for miner when you want to sell or move your coins.

If you store bitcoins on centralized exchanges, you won't have to pay on-chain transaction fee when you sell, buy, sell, buy, means trading with your bitcoin but it's different if you move your bitcoins from exchange to another exchange, it's withdrawal. Withdrawal requires on chain transaction fee and exchange will charge you expensive withdrawal fee that includes some fees like on chain transaction fee, their wallet maintenance fee, service fee and many hidden fees they don't name.

2. Maximize your profit, holding 1 BTC for few years and sell it will make you earn a good amount of profit, but staking 1 BTC and give you like extra +0.1 BTC will make you to earn more.

People can think of it as it is attractive but there is risk like you said. Exchanges can stay next four years but they can bankrupt next year, we can not know their future.

But, it doesn't mean I will suggest people to hold their coins in exchange. I'm just telling the truth, if there are no pros, most people will avoid it, but we know most people hold in exchange.

We only can trust ourselves by controlling our private keys, controlling our bitcoins without dependence and uncertainty of centralized exchanges.

[tabas]

If you had a large amount of cryptocurrency would you prefer to keep it on an offline cold wallet or an online cryptocurrency exchange?

Both have pros and cons.

I'm interested to hear the thoughts of others.

Why would I keep it on exchange? I'm not a trader so basically I won't keep it there. For launchpools, airdrops? deposits and interests matters? Quite helpful but I don't want to entrust them with such amounts because they can just lock me there and delay my withdrawals if they want to. That's what happens to many huge depositors and remember that it is their money and the exchanges are giving them hard time when the time of withdrawal comes because they're asking for so much but they didn't do that upon deposits.

[re-start]

I believe that individuals who prioritize the secure storage of their digital currencies often opt for cold wallets. However, in the case of traders, it is common practice to allocate approximately one-third of their assets to a reputable exchange, while keeping the remainder in a cold wallet for added security.

[DeathAngel]

Cold storage is 100% safer than storing your Bitcoin on an online exchange. Look what has happened in the past with Mtgox, Celsius, FTX plus many more. It’s boring & it gets repeated all the time but in crypto nothing is everas true as ‘Not your keys, not your coins.’

[AprilioMP]

If you had a large amount of cryptocurrency would you prefer to keep it on an offline cold wallet or an online cryptocurrency exchange?

Certainly an option to store it in offline wallets because the online crypto currency exchange is not a wallet.
People try to be safe for their assets, so choosing to save in an offline wallet is an obligation rather than submitting assets to those owners of the Exchange.

Both have pros and cons.

For people who are pro, they think of the convenience obtained without the need for a complicated process rather than prioritizing the security and control of assets.
Online, the risk is big and needs to be avoided.