Do you keep your crypto on exchanges or in self-custody?

[loomka1999]

I've noticed that many people still keep a significant part of their funds on centralized exchanges because it's convenient for trading. At the same time, we've seen enough examples where exchanges froze withdrawals, were hacked, or even disappeared.

Personally, I try to keep only the amount I need for active trading on an exchange, while the rest stays in a hardware wallet. It takes a little more effort, but I feel much more comfortable knowing I control my own private keys.

How do you manage your crypto?

Do you trust major exchanges enough to keep large balances there?
Do you use hardware wallets, software wallets, or a combination of both?
What security practices have worked best for you over the years?

I'm interested in hearing different opinions and learning from other people's experiences.

[MarryWithBTC]

Mate, no where is completely safe. Just be personally conscious, follow news and be informed alert.

Coldcard vulnerability

This happened to to a high-security hardware. This has defeated your advice, if followed on logic perspective.

However, self custody is still the best, maybe a properly set up air-gapped device will be a better solution.

[batonidze]

For long-term holders, self-custody is definitely the only way to go. But as someone running active trading bots and market-making scripts, the dynamic is quite different.

To maintain liquidity and react to market moves quickly, you are essentially forced to keep active inventory on CEXes. Moving funds on-chain for every rebalancing act is just not feasible due to gas and bridge delays (unless we're strictly talking about L2 DEXes, but most volume is still centralized).

My golden rule is tiering:
1. **Cold Wallet:** Bulk of the portfolio, never touches an exchange.
2. **Warm Wallet:** Intermediary holding that can be programmatically pushed to exchanges if inventory runs too low via API.
3. **Hot Exchange Accounts:** Strictly limited to the maximum acceptable loss for active bots. If a CEX goes down (like FTX or MtGox), that capital is considered part of the trading risk premium.

It definitely adds operational overhead, but it's the only way to sleep at night when you're running strategies 24/7.

[robelneo]

I'm interested in hearing different opinions and learning from other people's experiences.

Since the Coldcard hacking, nothing is 100% safe, but between exchange and self-custody, I prefer the latter, its better that you are responsible for your coins, because if you are the one holding it, you are going to educate yourself take good care of your assets and you will be responsible to all of your action.
We are our bank, so we will employ the utmost security, there's to many issues if you rely on exchange, besides hacking your assets are exposed.

[MoparMiningLLC]

in self custody - I have zero exchange accounts with any funds - exchanges should be used to deposit funds - exchange to another currency - then withdraw funds

they should never be used to hodl the funds.

[crwth]

It depends on the reason why my funds are there. Most of the time, I have funds in an exchange because I'm trading them and hoping to increase my profits. It's also easier to convert them to fiat if needed. For me, it's okay to leave funds just for trading, but if I had large amounts, I would have them in self-custody.

Would it be ideal to like move funds from time to time? Or test your seed backup for it? I think about it like that sometimes.

[MoparMiningLLC]

It depends on the reason why my funds are there. Most of the time, I have funds in an exchange because I'm trading them and hoping to increase my profits. It's also easier to convert them to fiat if needed. For me, it's okay to leave funds just for trading, but if I had large amounts, I would have them in self-custody.

Would it be ideal to like move funds from time to time? Or test your seed backup for it? I think about it like that sometimes.

I can understand also if trading - that follows the deposit/exchange/withdraw also - just swapping for profits before you withdraw.

I dont use seed phrase wallets. I stick to keys I generate myself. I trust hardware wallets (hot or cold) about as much as I do exchannges - basically any funds on them should be considered lost and if they never disappear then you are lucky. I will let Bitcoin core itself create my keys that I use for storage.

I dont hold any thing other than Bitcoin either.

[Dareo]

Quantum computing is advancing slowly, and along with it, new security risks are also emerging. The recent Coldcard incident has also shown that even a hardware wallet cannot be said to be 100% risk free. Therefore it is important to always be aware of security. Personally, I keep only as much as I need to convert to fiat on the exchange. I keep the rest in self custody wallets.

However, if you talks about 100% security, then there is no alternative to real assets. There is no risk of cyber attacks on assets in land or physical gold. Of course they also have different risks, but at least you don't have to worry about cyber hacking . And if you have a large amount of assets, I would say divide them among different types of assets instead of keeping everything in one place. Be it digital or physical.

[coin-investor]

How do you manage your crypto?

I'm interested in hearing different opinions and learning from other people's experiences.

I'll base this on my experience; I used to trust exchanges because they were easy. You don't think about security because they take care of it for you, as long as you keep your login details safe, but when the exchange goes down and I did not recover my coins, that's what too much trust in a third party brought me.

I learned to be responsible and to be educated on how to keep my assets because part of being an investor in this space is learning and being responsible; you have to live by Satoshi's idea of decentralization to remain in this space.

[BitMaxz]

I don't have hardware wallets yet, but I am planning to have one. However, I feel I better trust my own way to secure my wallet than using 3rd parties, just like what happened to the recent Coldcard hack.

The exchange is also not a good place to hold coins since we do not have full control of our wallet.

For me, having a separate device to hold my wallet and keys and keep them away from the internet is way safer for me. I haven't experienced any issue yet, and I can process and sign a transaction offline and broadcast the signed transaction to the other device; it works like an air gap.
The only problem is not all coins have this style of wallet where you can run them offline, but if you prefer a multiwallet or support multiple coins, then your only option is to use a hardware wallet, which is safer than using an exchange wallet or hot wallet.

[aoluain]

Self custody with open source hardware wallets all the way with me. And that is the bare minimum
I would ever consider and thats what has been recommended by nany here on the forum.

Open sourced wallet so it can be independently verified and checked by whoever wants to make
sure there is no malicious code present.

When it comes to seed storage and security I would only recommend stamped stainless steel
plates for security in the event of fire or flooding.

[tabas]

Was this thread moved from somewhere to here? because being in the Project Development might not be the most appropriate for it to discuss. and should it be moved then Service Discussion or its child board, Exchanges might be the right one.

What security practices have worked best for you over the years?

Given that the cold card issue can happen again for other hardware wallets. I think if it's about my personal security practice is to shut my mouth in public and won't let people know what I have or even my involvement in holding bitcoin and a couple of other crypto assets. It worked for me and is still working for me to avoid suspicious people trying to get near me as I'm scared to death with potential wrench attacks. While we talk about security measures, hardware wallets, software updates, etc. In dangerous times like this, we also need to physically protect ourselves and one best way is by keep ourselves low profile in person.

[macson]

Exchanges have never been the right place for me to store my assets. They may offer convenience in managing your assets, but the fact remains that they are third parties, and there's a risk that their operations could come to a halt due to financial or other issues.

I use a self-custody wallet to store my assets for the long term. It may not offer the same features as an exchange, but with a self-custody wallet, you don't have to fully trust a third party to manage your assets, since you have full control over your own assets.

[David Astor]

Convenience vs. security is always a trade-off in crypto. CEXs offer easy liquidity and limit orders, but you’re essentially trading ownership for convenience.

Personally, I stick to a clear rule: if I’m not actively executing an order, the funds don't belong on an exchange. Using a hardware wallet multi-sig setup or just a reliable cold storage device combined with a passphrase (hidden wallet) gives peace of mind that no exchange risk can match.

For those who actively trade, leaving funds on CEXs is a calculated risk, but for long-term holding, non-custodial solutions are non-negotiable.

[Filicius]

And although the way to go is to keep them in self-custody knowing that even this way you could lose them to a rare incident like coldcard’s, I remember how I holded my initial sats in CEXes for quite a long time in my beginnings.

Therefore, I think that one should take the decision where to hold the cryptos according to his circumstances, i.e. experience, value of his holdings, trading style, motivation to learn how to be his own bank…

[The Cryptovator]

And although the way to go is to keep them in self-custody knowing that even this way you could lose them to a rare incident like coldcard’s, I remember how I holded my initial sats in CEXes for quite a long time in my beginnings.

Therefore, I think that one should take the decision where to hold the cryptos according to his circumstances, i.e. experience, value of his holdings, trading style, motivation to learn how to be his own bank…

Actually, how you will secure your funds totally depends on you. First you have to choose an open-source hardware wallet for strong security. But it doesn’t mean you are still 100% safe; you also have to make sure the hardware device isn’t cracked or tempered and was received from the original sources. Incidents would happen anytime, but we have to try our maximum from our ends.

Back to the @OP, for me, I hold my funds in a Trezor and a Ledger. Upon completion of the trading, I move funds to the hardware wallet. Because most of the time I hold my funds longer, so it doesn’t make sense to leave funds on the exchange. I have learned a costly lesson previously due to keeping funds in centralized exchanges. I'm keeping only small funds on the exchange so I can easily afford the loss in case of an account hack or suspension.

[Taskford]

And although the way to go is to keep them in self-custody knowing that even this way you could lose them to a rare incident like coldcard’s, I remember how I holded my initial sats in CEXes for quite a long time in my beginnings.

Therefore, I think that one should take the decision where to hold the cryptos according to his circumstances, i.e. experience, value of his holdings, trading style, motivation to learn how to be his own bank…

Actually, how you will secure your funds totally depends on you. First you have to choose an open-source hardware wallet for strong security. But it doesn’t mean you are still 100% safe; you also have to make sure the hardware device isn’t cracked or tempered and was received from the original sources. Incidents would happen anytime, but we have to try our maximum from our ends.

Back to the @OP, for me, I hold my funds in a Trezor and a Ledger. Upon completion of the trading, I move funds to the hardware wallet. Because most of the time I hold my funds longer, so it doesn’t make sense to leave funds on the exchange. I have learned a costly lesson previously due to keeping funds in centralized exchanges. I'm keeping only small funds on the exchange so I can easily afford the loss in case of an account hack or suspension.

And you are right with that since securing their funds should be mix like they have good habits to choose what best wallet to use. But also even if they already use those open source wallet, the main protection would comes unto them on how they handle their devices.

For buying much better to buy this at official store and better not to look for cheap at unknown site because most likely they are at risk to get scam.

But as we all know about this. There's no platform and wallet is totally safe. But if they exert more efforts to execute those good things to be done on their wallet for sure they would be on much better position and they can possibly avoid those unnecessary risk.

[TokenTikas]

Never keep crypto on exchanges because personally I think exchanges are not as safe as hardware wallets. Keeping it in your self custody is the best medium, so it is better to avoid exchanges and keep your own funds in your self custody.

I have learned a costly lesson previously due to keeping funds in centralized exchanges.

I also got such a lesson and from there I became completely careful. Since becoming careful and never keep a large amount on exchanges. It is better not to keep a large amount on exchanges because it cannot be said when we will face what kind of problem.

[goldkingcoiner]

Mate, no where is completely safe. Just be personally conscious, follow news and be informed alert.

Coldcard vulnerability

self custody is still the best, maybe a properly set up air-gapped device will be a better solution.

I agree, self-custody is indeed best. And an air-gapped device can be just as good if not much better than some hardware wallet that you need to trust will work and won't get hacked later in the future. That is just an awful scenario. You might as well be throwing your investment funds out the window every few years...

Your own mind is the most powerful security system. I recommend using it meticulously to make sure that nobody has access to your coin. Better yet, nobody should even know you have coin, so they are not enticed into go looking for it.

Everyone has their own idea on security...