Not your keys? Think Again

[retreat]

This is quite important for those who are new to accumulating Bitcoin, where they store their Bitcoin, because even though the exchange offers convenience, the security of the assets is still not guaranteed there, that if the platform experiences problems then all the user's assets will also be affected because they cannot be accessed. Self custody wallets are recommended for storing assets in the long term, because users have full control over their assets. It is not difficult to differentiate between custodial wallets and self-custody wallets, as explained by other users. So there is no reason not to use a self-custody wallet.

[Hamza2424]

You are conveying a good message to those who are newbies in the crypto space. Those who don't have any idea hold their funds in exchanges or centralized platforms, and they don't even have any idea about the nuance of this matter. Like, their funds can be lost if in case the platform on which they are holding funds can be compromised by a hacker, so that is why we need to pay more attention to this matter. And for now, there are many ways to save funds in differnt kind of crypto wallets.

And in this, we also have to be attentive while saving wallets, secret keys, or seed phrases. Because if you forget them or lose them, that means you loss you funds, which are not recoverable until or unless you find the correct seed phrase or security keys. Other than this, you also have to be attentive while saving your seed phrase or security keys in a place where no one can access them.

This is a critical point for newbies, but I also agree with the fact that self-custody is a double-edged sword. While it completely eliminates exchange insolvency and counterparty risks, it shifts 100% of the responsibility onto our own hands, which most people do not want. And that is one of the biggest reasons people lose their funds. Because in many cases, it is not the exchanges getting hacked, but users like us making mistakes. Human error is the main reason, and people can easily fall for scams and even give away their seed phrase.

What most newbies do not understand is that there is no recovery or forgot password option here. Also, if funds are sent, they cannot be reversed. Therefore, always double-check the seed phrase and verify addresses carefully when sending funds.

And another important thing is how to manage physical backups of keys. We should not carry them in our wallets or keep them carelessly. Instead, they should be stored somewhere safe, and before storing them, it is even better to encrypt them as well.

[Odogwu-Blockchain]

Sometimes i find it more painful when some investor spends about $5 on bitcoin withdrawal fee while little amount of about 1 cent for withdrawal fee on non custodial wallet, this let me affirm the statement that knowledge is power and that you every investor should always ask more questions even after knowing more, because its isnt enough. If this naive investor could notice that decentralized wallet offers low fee, when they have spend huge for many years off custodial wallet, how do you think they will feel?

[Chibit01]

I really don't think most people quote choose to store there money on an exchange don’t know the difference some might not know but many I have seen know but they choose exchange because they don't want to pay fee when they trade their coin, or take responsibility of safe keeping their seed phrase, some people are just too ignorant and trust custodial service over their self.

[Darker45]

What's unfortunate, however, is that many prefer to use custodial services where private keys are held by the platforms. What they get in return are IOUs, mere numbers. It's unfortunate because it's preference. Many users aren't using custodial services simply out of ignorance or laziness. They're using popular centralized exchanges, for example, to keep their assets even if they're fully aware of the risks involved.

I can only hope it's because of convenience or for trading and other reasons and not about trust. Custodians are trustworthy until they aren't.

[SeriouslyGiveaway]

What's unfortunate, however, is that many prefer to use custodial services where private keys are held by the platforms. What they get in return are IOUs, mere numbers. It's unfortunate because it's preference. Many users aren't using custodial services simply out of ignorance or laziness. They're using popular centralized exchanges, for example, to keep their assets even if they're fully aware of the risks involved.

I can only hope it's because of convenience or for trading and other reasons and not about trust. Custodians are trustworthy until they aren't.

Using centralized exchanges, accounts and custodial wallets for storing bitcoin and altcoins for any purpose is risky similarly. It's not matter what they plan to do by leaving their coins on centralized exchanges where they don't have private keys, don't own and control their coins, consequences can be very costly and painfully if the exchange scam exits, or it was hacked, then did not compensate to customers, or bankrupted.

There are a lot of risk and there are also enough warnings.
Recent events should make everyone withdraw all their coins to their own wallets: Part 1
Recent events should make you withdraw all your coins to your own wallet: Part 2
Recent events should make you withdraw all your coins to your own wallet: Part 3
Get your coins out of custodial wallets now: Part 4

[Rubuchi]

I really don't think most people quote choose to store there money on an exchange don’t know the difference some might not know but many I have seen know but they choose exchange because they don't want to pay fee when they trade their coin, or take responsibility of safe keeping their seed phrase, some people are just too ignorant and trust custodial service over their self.

I don’t think most people choose exchanges because of the feees only, I want to believe some of them do so with the knowledge of categorization, I called it knowledge of categorization because bitcoin storage is kinda categorized into two. The first one is the custodial and the second is the non custodial. I am not going to talk much about that because it is already a public knowledge but I am going to talk more about is why some people will still choose to use the exchanges (custodial) over the non custodial wallets despite the latter being the safest to use. The exchanges are actually the easiest way you can make your transactions and also make withdrawals through the p2p platform, if somebody like me wants to keep my daily income and expenses in crypto, I would decide to keep it in my exchanges because it is usually not the chunk money and more like my liquid assets. But if I am to save my money for future investments and use, I would use my non custodial wallet or account because that is meant to accommodate chunk of money as well as money I won’t be touching for now.