Many understand the risk and yet....

[GEMIN_M4]

Now I know why some people keep leaving their Bitcoin in the hands of centralised exchanges.

What if the reason why we keep telling people to take their funds or bitcoin out of centralised exchanges and they failed to do it was because it was all intentional? What if they intentionally want Coinbase to hold their Bitcoin for them simply because they suck at keeping private keys like their lives depends on it?

After all they will have someone to blame? After all they have money in the bank and they have access to it when they want, and Coinbase just feel to them like another bank?

In 2026, a Reddit user still believe that if no Centralised exchanges like Binance and Coinbase existed he won't be holding any Bitcoin or crypto because he just can't keep anything too sensitive like private keys and recovery seed safe.

Instead of me telling him that since he can't become his own bank and take responsibility he should not invest in Bitcoin, he choose Coinbase to do the job for him, funny enough he understand the risk and still choose to do this.

What do you have to tell such people?

[Hewlet]

What if the reason why we keep telling people to take their funds or bitcoin out of centralised exchanges and they failed to do it was because it was all intentional? What if they intentionally want Coinbase to hold their Bitcoin for them simply because they suck at keeping private keys like their lives depends on it?

does it mean that if you are using coin base or any other exchange that  you are not going to be responsible for keeping your seed phrase or your pass key? laziness in keeping of seed phrase or pass key is not an excuse as to why one should leave all his asset in an exchange. leaving your asset in an exchange is a clear show of laziness and an act of careless that seems as nothing until something bad actually happens.

If you know the risk that is involved in dong something, why go on to doing it in the first place? apart from the fact that if you leave bitcoin in a exchange that a bull in bitcoin will equally affect you, there is no much different between doing that and leaving your fiat in the bank in both cases, you are giving your asset to a third party to take care of.

[nemesis_incarnate]

What if the reason why we keep telling people to take their funds or bitcoin out of centralised exchanges and they failed to do it was because it was all intentional? What if they intentionally want Coinbase to hold their Bitcoin for them simply because they suck at keeping private keys like their lives depends on it?

does it mean that if you are using coin base or any other exchange that  you are not going to be responsible for keeping your seed phrase or your pass key? laziness in keeping of seed phrase or pass key is not an excuse as to why one should leave all his asset in an exchange. leaving your asset in an exchange is a clear show of laziness and an act of careless that seems as nothing until something bad actually happens.

If you know the risk that is involved in dong something, why go on to doing it in the first place? apart from the fact that if you leave bitcoin in a exchange that a bull in bitcoin will equally affect you, there is no much different between doing that and leaving your fiat in the bank in both cases, you are giving your asset to a third party to take care of.

You need to want to have your custody in your hands.

Otherwise, it's a one-sided battle..

[Charles-Tim]

Anyone can do whatever he likes, be it saving on an exchange or saving on a noncustodial wallet. But the main thing is that we have to let them know the disadvantages of holding coins on an exchange which means they do not have full control over their coins on the blockchain. That is the reason I will prefer noncustodial wallets over exchanges.

[melinoe]

Anyone can do whatever he likes, be it saving on an exchange or saving on a noncustodial wallet. But the main thing is that we have to let them know the disadvantages of holding coins on an exchange which means they do not have full control over their coins on the blockchain. That is the reason I will prefer noncustodial wallets over exchanges.

Risks.

That is what differs them.. And your ability to say and feel outright free from somebody's control / processes, like with CEXes.

[bitmover]

Anyone can do whatever he likes, be it saving on an exchange or saving on a noncustodial wallet. But the main thing is that we have to let them know the disadvantages of holding coins on an exchange which means they do not have full control over their coins on the blockchain. That is the reason I will prefer noncustodial wallets over exchanges.

Some other day a friend asked me for a suggestion for a third party custodial service. I said he should make his own custody.

However, he is afraid of physical threat,  kidnapping,  etc... I live in a dangerous country.

I think thay this may make some sense. Although I still prefer self custody

[Dunamisx]

Many keep claiming to understand what they don't even know, the security of our bitcoin should not be taken with weak hands, except we want others to take advantage of that and took away our assessed from us overnight before we realize, we must know about wallet safety and which are the best for us to use, we cant just be using a random wallet and thing that that is the end of it all, when we are not even safe at all, its hard for someone who knows what is at stake to still commit related actions that could lead to his asset forfeiture.

[Charles-Tim]

Some other day a friend asked me for a suggestion for a third party custodial service. I said he should make his own custody.

However, he is afraid of physical threat,  kidnapping,  etc... I live in a dangerous country.

If he is holding coins on exchanges, he can still be kidnapped. With wrench and torture, he can give them all the details needed to move money on the exchanges or custodial wallet.

There is duress mode a wallet in a way the wallet can be taking you to a different a single wallet with your finger print but another wallet with password like Unstoppable wallet, but the disadvantage is that it is a mobile wallet but it can easily fool attackers. It is the best duress mode that I have seen.

But most common are the duress pin that will delete the wallet if you input incorrect password. This can be questionable by the attacker but at least they will not be able to access your coins, unlike on exchanges which have not worked towards having fake/second exchange account for their customers which can be used to fool attackers.

Wallets are better if it is about kidnapping and wrench attacks.

The problem about noncustodial wallet that I noticed are social engineering attacks, address poisoning and some other ones which are completely avoidable if learning about how to avoid them.

[Natalim]

We all have our own way of managing risk. If someone isn’t good at securing private keys or keeping a wallet safe but still wants to invest in Bitcoin, then opening an account with Coinbase is honestly a good option.

That said, if I’m thinking long term, I’d rather take it on myself to really learn how to store my funds properly and securely. The good thing about holding coins in your own wallet, aside from having full control, is that it’s not directly visible to the government. That also means when you sell, taxes might not be as straightforward, for better or worse.

If Coinbase were truly like a bank with solid insurance, then yeah, I’d probably feel safer leaving funds there. As it stands, it still comes down to personal responsibility and what level of risk you’re comfortable with.

[JoyMarsha]

Anyone can do whatever he likes, be it saving on an exchange or saving on a noncustodial wallet. But the main thing is that we have to let them know the disadvantages of holding coins on an exchange which means they do not have full control over their coins on the blockchain. That is the reason I will prefer noncustodial wallets over exchanges.

Some other day a friend asked me for a suggestion for a third party custodial service. I said he should make his own custody.

However, he is afraid of physical threat,  kidnapping,  etc... I live in a dangerous country.

I think thay this may make some sense. Although I still prefer self custody

But still, that's not a good reason for someone to have their Bitcoin on an exchange, for safety purposes against kidnapping, or physical attack.

To me, that makes it worse on the person's side, in the sense that, he can be forced to disclose the logins of his crypto exchange password when kidnapped, which he will surely do for the kidnappers to have full access to his Bitcoin on the exchange. But in the situation he is in, self-custody of his Bitcoin, he will have his seed phrase in a hidden place, which I know he didn't memorize or have with him. That act alone would make it hard for kidnappers to get access to his Bitcoin.

That being said, your friend doesn't know the dangers of having their Bitcoin on an exchange. He should have a rethink now, as it is early, before what he is afraid happens to him, because I see it as an easy way for someone to steal away his Bitcoin from the crypto exchange.

[sokani]

In 2026, a Reddit user still believe that if no Centralised exchanges like Binance and Coinbase existed he won't be holding any Bitcoin or crypto because he just can't keep anything too sensitive like private keys and recovery seed safe.

Instead of me telling him that since he can't become his own bank and take responsibility he should not invest in Bitcoin, he choose Coinbase to do the job for him, funny enough he understand the risk and still choose to do this.

What do you have to tell such people?

People will say anything to justify their actions, and I think it's a stupid reason to keep funds on a centralized exchange. If he's scared of losing his seed phrase and thus his funds on non-custodial wallet, he can add a passphrase to it and store in multiple locations, like 5 to 6 locations. That way, even if he has problems remembering things, I don't think he will be able to forget all the locations.

[macson]

People like this will only learn from their mistakes when they experience the consequences of their actions. If not, they will continue to hold their Bitcoin on a centralized exchange and will not care about any risks they might experience.

If that's the case, there's no need to waste energy advising such people not to use centralized exchanges to hold their bitcoin. They'll simply ignore anything you tell them. It's better to educate those who are willing to learn and are open to understanding self-custody.

[WatChe]

Anyone can do whatever he likes, be it saving on an exchange or saving on a noncustodial wallet. But the main thing is that we have to let them know the disadvantages of holding coins on an exchange which means they do not have full control over their coins on the blockchain. That is the reason I will prefer noncustodial wallets over exchanges.

Some other day a friend asked me for a suggestion for a third party custodial service. I said he should make his own custody.

However, he is afraid of physical threat,  kidnapping,  etc... I live in a dangerous country.

I think thay this may make some sense. Although I still prefer self custody

One benefit of keeping your coins on custodial services like Binance is that the exchange is responsible for safety of your coins. In case your coins are in self custody then there is no way to recover them in case the coins are lost due to any reason. Having said that there are also issues associated with custodial services like they can confiscate your coins at any time due to any reason like if you violate there terms and conditions. If you know how to secure your coins in self custody then they will remain under your custody as long as you want.     

[Ziskinberg]

I guess they really don't understand the real risk that comes with centralized exchanges. If they do, they won't waste their time and money trusting those centralized exchanges, but since they let the exchange do their job instead, then they have no one to blame in the future but only theirselves.

However, everyone's got their choice on how to hold and protect their bitcoin. But just a reminder, centralized exchanges have their security measures, but we can't deny the fact that they are still prone to hacks and fraudulent practices, that's why others would prefer looking for decentralized exchanges instead.

But it would be best if you are responsible in holding and protecting your own bitcoin through saving them in your non-custodial wallet.

[Popkon6]

A Bitcoin holder can transfer his coins anywhere he wants, but he can also transfer them to an exchange wallet or he can choose software wallets and hardware wallets anywhere he wants to hold his Bitcoins. However, exchange wallets are not safe for holding Bitcoins, hardware wallets are suitable for holding Bitcoins.

[Stepstowealth]

In 2026, a Reddit user still believe that if no Centralised exchanges like Binance and Coinbase existed he won't be holding any Bitcoin or crypto because he just can't keep anything too sensitive like private keys and recovery seed safe.

This feels like a problem with mindset, that is, he is suffering from a poor and flawed mindset that probably has been formed as a result of past experience that he has had with keeping things that are sensitive and then failed at their safety and then now he thinks that he will not be able to keep a sensitive information like his private keys and recover seed safe. That flaw in mindset is the first thing that needs correcting, he has to know that he can keep sensitive information if they learn properly about security. With the problem identified, there is a solution for it.

[Merit.s]

I prefer to keep my coins in my custody than storing it in an exchange. At least, it's better that I lost my coins due to my carelessness which may/may not happen than keeping it with a third party and it disappears from the exchange based on hack or exit scam. I know that I'm responsible for it than putting your hope that exchanges are secured and your funds gets stolen.

One advantage of keeping your coins in your self custody is privacy sake. No one will know how much bitcoin is in your possession but exchange will expose that and your asset can be frozen if the government suspects you of any illicit activities.

[sunsilk]

One reminder is already enough that they shouldn't keep their funds in any exchange if they have no plans of trading.

That's for them to decide and if they trust more of these exchanges than themselves if it's about keeping their money, you can't blame them for having that mindset.

Because for them, it's best to trust these centralized exchanges that are registered. But little did they know, if hacks do happen. There is no assurance that their funds won't be affected.

[dzungmobile]

One reminder is already enough that they shouldn't keep their funds in any exchange if they have no plans of trading.

They should not use all or big capital part for trading which is risky and easily to lose money. So trading should be given very small part of their capital.

They should not store their fund on exchanges a long time or longer than what they actually need. Without plan to do anything, they must withdraw coins to their non custodial wallets.

Many warnings about risk of storing fund on centralized exchanges.
Reminder: do not keep your money in online accounts.
Exchange graveyard.
Events made you scare about custodial wallets, centralized exchanges.

[Somegory]

Good luck to anyone who thinks that keeping their Bitcoin on a crypto exchange is better.

Wait till the exchange locked them out. Withdrawal instantly paused, mostly when you needed the fund the most, and they start telling you that your assets are Safu, on words only.

Since the past 15 years now nothing has been better than Self-Custody.

There is no such thing as ' too big to fail' in this crypto space, thinking that the likes of Coinbase and Binance can not crumble is a big fat lie.