Many understand the risk and yet....

[Judith87403]

When it comes to limits some persons are actually honest about it, and that really matters. Self custody offers complete control, though it equally requires discipline and responsibility. When one knows they will most likely lose keys or mishandle backups, making use of a reputable exchange can also be a rational choice, it isn't ignorance. Bitcoin is about options, compelling a particular lifestyle on everybody. The real error is pretending an exchange is free of risk or equal to self custody. It is a trade off that is between sovereignty and convenience. What really matters is choice that informed. When they understand the risks, diversify custody where it is possible, and stay away from blind trust, which is yet better than staying completely out or going after shortcuts.

[Creeper0]

We have nothing to say here. Your wealth, your custody. We can only inform him about the good and the bad. If he knows the risks of saving on exchanges and the benefits of saving in decentralized wallets but still takes the risky path, then he is responsible for his actions. We have no responsibility here and nothing to advise. We cannot change his mindset if he does not change himself.

[Mpamaegbu]

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?

That's a possible reason for many people. I know of a crypto influencer who's a Web3 person but dude feels very comfortable leaving most of his coins on top centralized exchanges. According to him, it saves him the headache of looking over his shoulders whenever he's travelling or moving around as he would always be thinking of how to safeguard his passphrases and passwords to those wallets. With Cexs, he doesn't need to worry about all that as much. All he needs is to click on forgot password and follow the prompts for whatever direction on what next to do to regain access if he forgets his password.

After all they will have someone to blame?

It's not even about looking for someone to transfer blame of any such to. Whether one blames someone or not, what's lost is lost.

What do you have to tell such people?

Well, one can only suggest where appropriate but that's where it ends. We can't coerce anyone into doing what they don't want to do in order to maintain peace.

[Btcdeybodi]

Everyone with the kind of risk they want to take but for me, i rather hold my bitcoins in an open source self custody wallet than leave it in an exchange wallet. Instead of me to even keep my bitcoins on exchanges, it is better i convert it to fiat and keep in the bank, it's even safer since bank have offices where you can lay complain if anythings goes wrong than experience the kind of thing that happened to exchanges like BYBIT when it got hacked and large amount of ETH was moved out. Anyone who cannot keep their private keys and seed phrases safe in their own custody is likely to face many problems because they will always choose to keep their assets in the custody of third parties which is very risky because it can be exposed to hacks and can be stolen without the consent of the owner.

[Findingnemo]

Keeping it intentionally because they can't handle the private keys can't be the most reason, there might be few but the percentage will be less and even if they do coinbase is not a tradtional bank and they don't have insurance if the funds are lost and the user needs to bear the loss 100%.

IMO, most people do it our of ignorance, they don't even know the real purpose of bitcoin they just treat it as another asset like a stock and keep it in their accounts.

[HONDACD125]

Why do we need to tell them anything? Will they listen to us and do what we tell them to do? Should that be our concern at all? Someone using a centralized exchange and losing their funds or someone using a non-custodial wallet and losing their private key are not going to affect Bitcoin or this market at all, it's their loss, which is why it's also their responsibility to choose what's best for them, and if they think centralized exchanges are a better option for them, let them choose that and see what happens. If they stay safe, well and good, and if something happens and they lose their funds, they will learn the hard way.

I don't understand how people want to get involved in everything but they don't have the capability to manage their things properly. I mean, if you are making investments in cryptocurrencies, you should be able to keep your assets safe, because it's your money and it's your responsibility to keep it safe and don't lose it, you can't say that you can't keep your private keys or seed phrases safe which is why you will stick with centralized exchanges, unless your total investment is worth a few hundred dollars.

[Gozie51]

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?

Laziness.

Laziness is the first reason that I can attribute to such decision because he doesn't want to create time to open his own personal wallet and protect his investment. So he has not had an experience of those who lose their coins because the exchange where their coin is was hacked because if has witnessed such then he will learn the hard way. He is taking such decision because his coins is still safe and no hack yet that he is affected with, otherwise he would have known that it is proper to use a wallet where you have absolute control over. Although he might be trading with them because some traders still keep their coins in exchanges because they avoid transaction charge of moving the coin in and out.

[Hypnotizer]

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?

But what will be the essence of using bitcoin if they can’t hold their keys? If they want to invest in bitcoin without holding bitcoin themselves then why not buy ETFs? For real there are some people that leave their bitcoins in exchanges intentionally because they want the exchange to help them hold 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?

Maybe they love the traditional banking system so much they don’t want to escape from the ‘sense of security’ it’s provides them by having control over their money..

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?

It is their money..they do what they like with it, maybe in an occasion in the future they might understand the mistake they’re making..they’ll learn the hard way

[xbetz.io]

Many people do understand the risk, they just consciously trade sovereignty for convenience. Self-custody isn’t only about knowledge, it’s about operational discipline. For some, the risk of losing keys feels more immediate than the risk of an exchange failing. I don’t think it’s irrational, it’s a preference. The real problem starts when people deny that they’re outsourcing responsibility while still expecting full sovereignty outcomes.

[Felicity_Tide]

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?

Not all are intentional though. There are a few that probably haven't learnt much to understand the key reasons for self custody. They're still very much trapped in the illusion of central authority like the banking systems. Those that are new often fall in this category which might be as a result of the first information they came across_{(probably from YouTube or some random person on the Internet)}. But I won't dispute the fact that there are others that actually wants to make it the responsibility of a central authority to keep their funds despite having a knowledge of self custody. This people actually do it not because it is a tedious task for them, but because they prefer to avoid the concepts of personal accountability, while thinking that centralized exchanges are readily there to take the blame if anything eventually goes wrong.

[BABY SHOES]

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.

What if the exchange is hacked... withdrawals are suspended this will be a panic of exchange users and they have no control over the coins in the flavor, can only wait for the decision of a third party to withdraw the coins they have.

Even though non-custodial wallets are better than exchanges, they still have more trust in exchanges than themselves, for security and other reasons.

Yeah... still my preferred non-custodial wallet.

[Cryptomultiplier]

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.

What if the exchange is hacked... withdrawals are suspended this will be a panic of exchange users and they have no control over the coins in the flavor, can only wait for the decision of a third party to withdraw the coins they have.

Even though non-custodial wallets are better than exchanges, they still have more trust in exchanges than themselves, for security and other reasons.

Yeah... still my preferred non-custodial wallet.

It's always a wise choice to use an exchange that has built reputation and trust in their service delivery and with their customers and has upgraded to include newer technological initiatives like AI tools.

There's also one thing I believe, and that is anyone can do a DCA strategy anyway that suits them best as long as it is convenient and safe to a degree that is okay, until funds are moved anywhere it is supposed to go.

Non custodial or not, what determines your safety is the knowledge and carefulness you apply while saving your Bitcoin, because scams and hacks and other criminals can lay hold of any wallets you use and still cart away with your funds.

[Somto9Light]

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.

Exchange is not a safe  or right place to store our assets, there, you're not the only one that will access it, that is why scammers easily gain access to  our holdings more especially when kept in an exchange. you're right it is better we store our asset in non custodial wallet where the user will only have access to it, i personally don't like holding my asset in an exchange i channel all my assets to non custodial wallet it is only when i want to trade that i will move some portion into my exchange for trading while the rest will remain in non custodial wallet.

[Finestream]

This boils to the idea that bitcoin is not for everyone. While many may understand the risk, but not all of them are willing to manage the risk well so they can avoid future circumstances. But some just chose to be easier on them by passing their task to the exchanges, thinking that its the best way to combat the risk, but in reality it only make the scenario worst by increasing the risk of losing their coins.

However, there are still few who understand it well and manage the risk themselves, but majority don't seem to be cautious at all so its not surprising why a lot have lost their bitcoin in their safekeeping process.

[Furious 7]

I don't think this is a really compelling reason to keep our assets on a centralized exchange because in this case our poor ability to store seeds or phrases is just an excuse so that we don't want to be complicated and don't want to think that the decision not to be in a cold or hard wallet for storage is the right decision.

We realize that it is the first thing to do when storing assets in the safest place possible and we don't do it under the pretext of poor seed storage and insist on being on a centralized exchange when it is risky.
I don't want to judge it, it's just that in this case, the pattern that was done from the beginning as if challenging it is not very good to do because when there is a problem in the end we are the ones who lose.

[hmbdofficial]

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?

For sure if you are  using coinbase or other centralized exchange you’re not responsible  for keeping your seed phras/ private key that why they are called custodial wallet. your seed are in the custody of the company.

[bitmover]

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.

I think etf are good in such situations.
If someone is afraid of such threats and wrench attacks, an etf may be a good option.

ETF are good in such cases because they take a few business days to receive the cash after you sell

[Botnake]

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.

And even if they become aware on the disadvantages of holding coins on an exchange, if they are not willing to manage their own risk and do the right thing, still they will resort on sticking to what they think is right and less burden for them.

People may listen to us but we can't guarantee that they will follow us. So let's leave them with that. But one thing is certain, they will only make a wise turn if they start experiencing losing their coins, and blame the exchange for their irresponsibility and unreliability.

[passwordnow]

he choose Coinbase to do the job for him, funny enough he understand the risk and still choose to do this.

They don't want to do an effort of doing it because they think it's still safe doing that. Despite knowing that there were several news in the past that have taken users funds from the exchanges due to hacking incidents, they'll not stop doing it. Stop reminding people when they are aware of the risk and keeps on doing the risky thing. They will take account to themselves and responsible for any result that they'll get, there's no way to stop them unless it happens to them in actuality with what we don't want to see happen to them. It will only make them do the right thing when the bad thing has come.

[LastKiss]

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?
~snip~

Well, It’s all about personal preference some people are comfortable keeping their Bitcoin on CEX like Binance or Coinbase, while other people prefer using hardware wallets. basically, every option have their own risk and it’s up to us to choose which risk are we willing to take. The most recent hack incident was happened on Trust Wallet, where more than 2,500 wallets were affected. Luckily, they provided reimbursements to those who affected by the hack. Meanwhile, some people are afraid to lose their hardware wallet or forgetting where they stored their keys. We can’t force everyone to use one method, because both third party services and hardware wallets will continue to improve their security over time.