Many understand the risk and yet....

[Y3shot]

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?

Leaving one asset on an exchange wallet because money in the bank is secure is not a good idea. Comparing the bank and the exchange, the bank is better because it is very rare for a bank to just close down and run off with people's money.

In most cases, when a bank wants to stop operating, they give notice to their customers, but when an exchange wants to crash or shut down, they don't provide any warning; they just do what they have in mind, and your money is gone forever, which you can't even recover from the bank. Exchanges are unpredictable; anything can happen. The disappearance of many exchanges should be a case study that people shouldn't forget and also learn from.

[xbetz.io]

Many users understand the risks but choose custodial exchanges for convenience and accountability. Self-custody shifts responsibility fully to the user, which not everyone is prepared for. Exchanges reduce operational friction: recovery options, familiar interfaces and perceived safety. This doesn’t remove risk, it redistributes it. The real issue isn’t ignorance but a trade-off between sovereignty and usability. People don’t fail to self-custody by accident; they often consciously choose delegation.

[Questat]

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.

I know they are aware of the future hacks, but they aren't cautious enough, otherwise they would not trust their coins to an exchange because they are just putting their coins at risk of losing, as there's no security that their coins will be totally safe.

However, people will not learn their lesson if they won't try. Maybe if they will experience the consequence, that's the time they won't be trusting an exchange again regardless of how big or small their investment is.

People need to see to believe, need to experience to believe, but there are always ways to avoid if they really want to.

[Vaculin]

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

His reason is valid, so trusting an exchange could be his last option.

However, bitcoin has known already as the target of scammers and fraudsters due to its highly expensive price. So if you think you can't afford to manage the risk, it would be best not to enter bitcoin investment.

But if you instill proper risk management and accept the challenge to be with your own bank with bitcoin, for me that is more commendable so you can highly benefit on your own whenever bitcoin investment turns highly profitable in the long run.

[serjent05]

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?

Every individual has their own preference and level of trust.  They leave their Bitcoin to centralized exchanges because they trust the exchange and possibly they are trading.

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?

It is on their discretion, it is their Bitcoin so they have all the right on how they wanted to store them.  It is also possible that they think that keeping their Bitcoin in such large exchanges is more secure than them holding the coins themeselves.

After all they will have someone to blame?

Yes, this is another reason. People want someone to take the blame.

What do you have to tell such people?

I will tell them to learn how to keep their coin securely, and while they are on it, it is ok to keep them on exchanges, but the moment they grasp how to secure their Bitcoin, they must move their Bitcoin out on centralized exchanges and keep it in an uncustodial wallet.

[MarjorieZimmermanGinger]

His reason is valid, so trusting an exchange could be his last option.

However, bitcoin has known already as the target of scammers and fraudsters due to its highly expensive price. So if you think you can't afford to manage the risk, it would be best not to enter bitcoin investment.

This could be much better, but there are other ways to maximize your potential. Trusting an exchange to store your assets is a bad decision, even if the reason is people's ignorance about how to store Bitcoin safely. All the negative things associated with Bitcoin are often attributed to Bitcoin, but have we ever considered that these are generally perpetrated by haters or individuals who commit fraud on personal or group grounds. If we must talk about risks what should we actually do? As far as I know, investing in Bitcoin is very independent and if stored properly there won't be any major problems, except for those who prefer show off in their Bitcoin ownership.

[m2017]

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

Because they are not capable of taking responsibility.

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?

The reason is human laziness, because it is easier to shift responsibility for storing bitcoin to the exchange than to learn how to do it correctly yourself.

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?

The ability to blame instead of owning your assets? What could be more stupid?

Actually, yes, Coinbase (any other exchange) is a surrogate alternative to banks in the cryptocurrency sector. Could say that.

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.

I don't rule out the possibility that it might be safer to store bitcoin in a exchange wallet than at home. Therefore, despite many categorically asserting that shouldn't store cryptocurrency on centralized exchanges, I would say that each bitcoin storage situation is individual, and shouldn't even rule out storing it on an exchange (if that's appropriate for you).

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.

Investing in bitcoin is a risk in itself.

And then there are people who buy, for example, BTC-futures.

What do you have to tell such people?

I can say this: do what you think is most beneficial for you, without listening to the "noise" around you from others who can't assess your situation properly.

[davis196]

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.

Having crypto in a centralized crypto exchange doesn't take away all the responsibility from a crypto user. He(or she) has to keep his login details like email and password safe. I do remember news about hacked Coinbase accounts being sold by some hackers/scammers on the darkweb(despite the idea of selling an account with crypto in it instead of withdrawing the crypto being extremely dumb). Some people do feel a false sense of security when they hold crypto in a centralized exchange. They can talk to customer support, if something happens with their coins(not that the customer support will always solve their issues).

[Cleanslate_]

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?

It is their choice and what they want, experience they say is the best teacher, which risk could be more than you not taking care of your responsibilities and allow an exchange to do that it means you don't value your assets and should be ready for the consequences involved.
Keeping your money or bitcoin in an exchange is very risky therefore should be avoided

[Kelvinid]

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

Safety first, as they say. Not for your hard-earned coins, but definitely for yourself. And for me, that makes more sense. That's why we can't blame those people who just want to live as they want to, without distractions and hassles to think, and that could only happen once they entrust their coins to the exchange.

However, there are still some wise enough to manage both. And these are the people who make the most benefits in the long run.

[UmerIdrees]

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?

A person who is too lazy to keep his money in his private wallet and keep the key safe, do you think he deserve to have a big wealth ? I mean, the people around the world have big data, they're working and having businesses where they safeguard the confidential data and all such things, and here there are people who can't even keep the 12 or 24-word key phrases safe 

Maybe there are people who are uneducated, etc., but those such people who possess wealth to buy bitcoin would be very few illiterate people. The majority of wealthy people should know how to keep their personal belongings safe.

[Kasabus]

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.

Exchanges can be reputable on their own, but not safe and reliable enough.

If we allow them to take care of our coins, that's just good to say that we are open from scamming and may lose our coins in the future. It could be an inside job or whatever, but one thing is certain, we build our bitcoin investment not for them to take care and take advantage of it, but for us to solely benefit our bitcoins when retirement comes.

This only makes sense for those who clearly understand the security of bitcoin.

[Adams0001]

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.

Putting your funds in exchange as a savings or investment i think you're just savings what will not benefit you when the exchange crashes. You need to look for  better wallets to secure your coin so that know one will get access to it accept the people you wish to share with and keeping your secret phrases safe is better then trying to share it with your love once. Is only people that like doing trading are are does that probably leave there coin to trade with but others that are really ready to invest for long term know what is the best thing to do. I don't know or in the future they can get what will be better for Self-Custody because everyday technology is improving so anything can be possible but the best now is self custody.

[BlackBoss_]

A person who is too lazy to keep his money in his private wallet and keep the key safe, do you think he deserve to have a big wealth ?

Be deserved or able to build up wealth or big wealth is different than how to keep your money safely.

It's like a story of an egg and a chicken and successful people need both things. They have to take care of their bitcoin rightly and store their bitcoin safely first. It should be stored in their open source, non custodial wallet to have a safe storage. Then with time, their bitcoins will increase in value and make them richer.

I say it is different because careless people still store their bitcoins unsafely but get richer if they're lucky. Even they got richer, their wealth can disappear anytime by bad and unsafe storage, and they must know about it in order to change their storage practice as soon as possible.

[Uhwuchukwu53]

Though I have not gotten experience of those who are full of experience about crypto generally that prefer exchange to store there holding what I observe that most Short time holder due to watching the market and not been able to move their coin or token from one place of storage to another prefer exchange to enable quick trade when they envisage their marketing target, but even as that it's very risky,for a long time holder who engaged on this act it really shown how careless such individual could be considering the risk involved, it's in nature of human that their careless and not managing risk properly leads to their cry when ever they encounter losses.

Exchanges are much more marketed than cold wallets or storages.

They will change their mind once there will be no way to go back.

Exchange has never been a place of storage, it's pure market where different buyer comes in the level of risk associated in storage of crypto holding can't be over emphasize, many have lost their Bitcoin, and others holding in many exchange that crashed without recovery till date, it's unwise to engage exchange as place of storage. Just like have said based on my experience there people who are short time holder who are more of a trader they keeps their coin,token within the exchange of trade to enable make easy sake once the market hit their target but even as that it's never a viable idea because anything can happen even within a shorter time interval.

[Reatim]

What do you have to tell such people?

it’s their coins if they lost it, you will not be affected anyway so just let them do whatever and let them see how it will affect them over the long run

it’s been obvious that people use exchanges because they’re scared of responsibility and they don’t want the extra pressure of having to protect their keys

[Mame89]

His reason is valid, so trusting an exchange could be his last option.

However, bitcoin has known already as the target of scammers and fraudsters due to its highly expensive price. So if you think you can't afford to manage the risk, it would be best not to enter bitcoin investment.

This could be much better, but there are other ways to maximize your potential. Trusting an exchange to store your assets is a bad decision, even if the reason is people's ignorance about how to store Bitcoin safely. All the negative things associated with Bitcoin are often attributed to Bitcoin, but have we ever considered that these are generally perpetrated by haters or individuals who commit fraud on personal or group grounds. If we must talk about risks what should we actually do? As far as I know, investing in Bitcoin is very independent and if stored properly there won't be any major problems, except for those who prefer show off in their Bitcoin ownership.

Of course, storing Bitcoin assets on an exchange is the worst decision. There have been numerous cases of exchanges going bankrupt and others suddenly locking up our assets leaving us unable to do anything with them. So, all of this should be a lesson for us all storing Bitcoin assets on an exchange is the worst decision.

Yes, Bitcoin is an investment asset with advantages especially in terms of privacy. We should be able to utilize it wisely by storing our assets in a wallet that we can manage ourselves. Don't be too showy because as Vaculin said, Bitcoin is a target for fraudsters and scammers because it is a valuable asset. When investing in Bitcoin the first thing we must learn is wallet security as this is fundamental to preventing future loss of our assets. Ignoring wallet security is a fatal mistake when investing in Bitcoin.

[Muba20]

Though I have not gotten experience of those who are full of experience about crypto generally that prefer exchange to store there holding what I observe that most Short time holder due to watching the market and not been able to move their coin or token from one place of storage to another prefer exchange to enable quick trade when they envisage their marketing target, but even as that it's very risky,for a long time holder who engaged on this act it really shown how careless such individual could be considering the risk involved, it's in nature of human that their careless and not managing risk properly leads to their cry when ever they encounter losses.

Exchanges are much more marketed than cold wallets or storages.

They will change their mind once there will be no way to go back.

Exchange has never been a place of storage, it's pure market where different buyer comes in the level of risk associated in storage of crypto holding can't be over emphasize, many have lost their Bitcoin, and others holding in many exchange that crashed without recovery till date, it's unwise to engage exchange as place of storage. Just like have said based on my experience there people who are short time holder who are more of a trader they keeps their coin,token within the exchange of trade to enable make easy sake once the market hit their target but even as that it's never a viable idea because anything can happen even within a shorter time interval.

By keeping money in an exchange, an investor may not have to keep his keys under his control, later he may think is safe, but in reality his assets are not safe because if the exchange is hacked, will he get his money back? And there is no certainty. Therefore, if you are trying to keep your assets, you should store them safely from the beginning. Keeping them in your wallet, whether short-term or long-term, is safe. If you have a small amount of money that can be spent on your own needs or is available for trading, then you should keep it in a good top-level exchange, but it should be understood that it is not completely safe.

[Nwada001]

It is their choice and what they want, experience they say is the best teacher, which risk could be more than you not taking care of your responsibilities and allow an exchange to do that it means you don't value your assets and should be ready for the consequences involved.
Keeping your money or bitcoin in an exchange is very risky therefore should be avoided

Some people don't really understand the risk of leaving their coins in an exchange; they thought it was the safest place to keep their assets, which their laziness in them is what gave them that type of thinking, trying to convince them that it's better to hand over security to a third party than doing it yourself, as if any serious thing happens to the exchange, their coin will remain safe, and also forget the fact that exchanges have the right to file for bankruptcy when necessary, and if a user's account is accessed, all funds are gone.

[ZAINmalik75]

Many users understand the risks but choose custodial exchanges for convenience and accountability. Self-custody shifts responsibility fully to the user, which not everyone is prepared for. Exchanges reduce operational friction: recovery options, familiar interfaces and perceived safety. This doesn’t remove risk, it redistributes it. The real issue isn’t ignorance but a trade-off between sovereignty and usability. People don’t fail to self-custody by accident; they often consciously choose delegation.

Convenience is obviously the reason why people choose to keep their assets in centralized exchanges or custodial wallets, but I think a lack of understanding and knowledge also contributes in that, because those who choose to use these mediums are unaware of some of the risks or they are simply unaware of the benefits of using self-custody. If you are someone who is into cryptocurrencies only because you want to make money and you don't really care about centralization or anything like that, you will probably not worry much about these things, but you should, let me tell you why.

We have seen and experienced so many attacks, hacks, and exploits in centralized platforms in the past, and people lost so much money in these things, and those who are aware of these things will surely think twice before keeping large amounts in such platforms, but those who are unaware will probably not care because they see no risks as they are conveniently using their services and they feel their funds are safe since they have been using those platforms for years and never faced any problems.