Before you use them be sure they do not contradict the Bitcoin principles

[Ucy]

There are very important principles guiding the Bitcoin system we ought to adhere to. These principles work in unism to help keep Bitcoin very secure, unhackable and anti-fragile. If you are a consumer of any Bitcoin product such as software, hardware, etc, ensure that the most vital ones are atleast adhere to

Here are some of the most important principles that guide the Bitcoin system::

— Trustlessness: don't trust them with your funds, private data etc  unless they're  proven to be secured or can't be compromised. The low trust is why you should generate your keys in very secure manner, avoid (or be extremely careful with) kyc or custodial exchanges.

— Self-custody and decentralization: make sure you have full control of your funds, private data and possibly (though not necessary) the exchange system. This helps minimize a single point of failure or attack

— Anonymity/privacy: keep sensitive data/info private especially when dealing with your crypto assets in public space. It should be difficult to link your actually identity to the assets.

— Transparency:  make sure that transactions and exchange system are publicly transparent. The less transparent, the more cautious you should be. If public transparency is weak, the exchange or wallet should be well monitored or regulated by governments/third-party services, and there should be some sort of compensation incase of fund lose. But never handover funds or private data you can't afford to risk to such exchange or wallet to hold, unless you are sure about your safety and that of your funds. But don't be too sure if you are not extraordinarily secured by SOMETHING ELSE

[Doan9269]

There are very important principles guiding the Bitcoin system we ought to adhere to.

When you learn about the blockchain technology and how it does not permit for any alteration except being in consensus, you will understand more better on how bitcoin is the reason why we can now trust and uphold unto it.

It is more better for someone who is a new beat to learn about bitcoin whitepaper, there he can explore on more opportunities concerning all that is made up of Bitcoin network.

[menachange]

Good list, but in practice some of these pull against each other, and I think that's the part worth thinking about.

Take trustlessness. Even a no-KYC instant exchange is custodial for a few minutes: you send first and wait for them to send back. So you're not removing trust, you're limiting it. Keep the window short, agree on a fixed rate before you send, and use a small test amount the first time with a new service. If something goes wrong you lose the test, not everything.

Privacy and transparency don't sit well together either. The more a service publishes about how it works and where funds go, the more there is to link back to its users. The more private it is, the less you can check it from outside. I don't think there's one right answer, but you should know which one you're giving up when you pick a service.
(English isn't my first language, so I used an AI tool to help me write this.)

[un_rank]

Take trustlessness. Even a no-KYC instant exchange is custodial for a few minutes: you send first and wait for them to send back.

You can use decentralized, open source P2P exchanges to limit the need to trust and rely on verifying their service. These come with their own limitations, so it may be necessary to do what you suggested some of the time.

Privacy and transparency don't sit well together either.

All that is publicly available are details of transactions and addresses. The user behind the account stays completely private.

- Jay -

[PrivacyG]

Take trustlessness. Even a no-KYC instant exchange is custodial for a few minutes: you send first and wait for them to send back. So you're not removing trust, you're limiting it. Keep the window short, agree on a fixed rate before you send, and use a small test amount the first time with a new service. If something goes wrong you lose the test, not everything.

We are all limiting our Trust in any thing we do, even in things not related to Cryptocurrencies.  This does not make any custodial instant exchange 'trustless'.  It requires Trust and there is no way around that.

[Aanuoluwatofunmi]

Bitcoin network was perfectly designed, same applies to the network rules, such a way that we don't have to complain much about it, there is still another aspect which is very important for us to know and this comes by how knowledgeable or ready and willing to learn as we remain in cryptocurrency, because if the entire system set up is perfectly made and we couldn't achieve to utilize every single opportunity for our own protection and profiting, then we achieve nothing.

[PX-Z]

If you are going to use a wallet, these list might help. But for an trading spot, future, etc. on an exchange or crypto card issuers, those list contradicts for what those businesses and services offering. Example trustlessness and privacy, those prinsiples doesn't exist for a business, because you need to trust them first and you need to give your personal info for verification.

[X-ray]

If you are going to use a wallet, these list might help. But for an trading spot, future, etc. on an exchange or crypto card issuers, those list contradicts for what those businesses and services offering. Example trustlessness and privacy, those prinsiples doesn't exist for a business, because you need to trust them first and you need to give your personal info for verification.

You can use Bisq for off and on ramp, and then you can use Hyperliquid for perpetual and spot.

Both don't require KYC and Hyperliquid has supported direct bitcoin deposit and withdrawal. See the docs.

Therefore the principles still hold up with a little more digging for information.

[BlackBoss_]

— Self-custody and decentralization: make sure you have full control of your funds, private data and possibly (though not necessary) the exchange system. This helps minimize a single point of failure or attack

The actual decentralization of Bitcoin is very important because it contributes to another thing, actual self custodial rights for Bitcoin holders. With non custodial wallets, Bitcoin holders actually control their bitcoin funds, and their bitcoins will never be frozen by anyone else remotely and digitally.

It's very important for Bitcoin holders, to actually have control of their bitcoin funds, and own their Bitcoin banks. It's very different than altcoins such as stablecoins which can be easily and quickly frozen by stablecoin issuers.

Stablecoins can be frozen by issuers.
Can stablecoins be frozen?

[Multani Boy]

You can use Bisq for off and on ramp, and then you can use Hyperliquid for perpetual and spot. Both don't require KYC and Hyperliquid has supported direct bitcoin deposit and withdrawal. Therefore the principles still hold up with a little more digging for information.

Bisq is non-custodial, yes, but not entirely trustless. This May, for example, they lost about 11 BTC to an exploit where the attacker specified a negative miner fee value that was not properly validated by the v1 protocol code. This allowed the attacker to empty out the funds of active offers. The exploit affected altcoin trades only, not fiat trades or Bisq 2.

Sure, there iss no central entity and no KYC, but trust in a third party does not completely disappear. It just shifts to trusting the code to be bug-free.

We are all limiting our Trust in any thing we do, even in things not related to Cryptocurrencies. This does not make any custodial instant exchange 'trustless'. It requires Trust and there is no way around that.

What I take away from this (and is basically confirmed by the Bisq case above) is that even the so called “trustless” options still require trust, it’s just focused towards code audits and protocol design instead of just a company’s word.

Might be a useful way to look at that list, not so much who or what is trusted but how transparent is the process to make sure that trust is warranted.

[EjiukaSpecial]

— Anonymity/privacy: keep sensitive data/info private especially when dealing with your crypto assets in public space. It should be difficult to link your actually identity to the assets.

While everything you said are all valid, it's also important to note that these principles are not always easy to follow perfectly in every situation. For instance, you can value privacy so much but at some point, will need to use a service that requires KYC. In such situation, you just have to know what you're giving up and the risks involved before proceeding to use such service. Bitcoin gave us total control of our money no doubt but sometimes, we can still make little but sensible compromise in our decisions about how we use it especially when they're necessary.

[Antidote47k]

— Transparency:  make sure that transactions and exchange system are publicly transparent. The less transparent, the more cautious you should be. If public transparency is weak, the exchange or wallet should be well monitored or regulated by governments/third-party services, and there should be some sort of compensation incase of fund lose. But never handover funds or private data you can't afford to risk to such exchange or wallet to hold, unless you are sure about your safety and that of your funds. But don't be too sure if you are not extraordinarily secured by SOMETHING ELSE

An exchange can prove that it holds a certain amount of coin without necessarily proving that it can be able repay everything it owes to customers. Being able to publicly verify reserves is valuable but they don’t give you the full picture of the exchanges finances. For instance an exchange could control 1000btc while still owing customers 1200btc and seeing 1000btc on chain wouldn’t reveal the discrepancy by itself. I wouldn’t say proof of reserve is useless as it can provide meaningful evidence, the point being that its value depends on what is verified like customer liabilities, if and whether they are accounted for.

Third party could possibly help oversee and verify those liabilities and other records too but that’s another layer of assurance separate from bitcoin’s on chain transparency.

[Darker45]

When you say "unless they're proven to be secured or can't be compromised", that's often only true until they aren't. That's still trusting and, therefore, contradicts the Bitcoin principle.

In the same manner when you remind us to "be extremely careful" with KYC and custodial services. It's not about whether the service can be trusted or not; it's about trusting the service. Trust itself is the fundamental issue, not whether what you're trusting with private information, money, or anything is actually trustworthy or not. 

I'd say trusting itself goes contradictory to the Bitcoin principle.

[pooya87]

Your suggestions are sound but I see some contradictions in them too specially when it comes to the titles of each paragraph you choose. Take this one for example:

— Trustlessness: don't trust them with your funds, private data etc  unless they're  proven to be secured or can't be compromised.

Trustless means void of any trust. A system where you put your trust in no-one no matter what. So you can't say "don't trust, unless [blank]". That's not trustless anymore.
Other than that, it is a good point. People should know the risks they are taking when they put their trust in some other entity like exchanges and then do it (which is inevitable).

[Juse14]

In the same manner when you remind us to "be extremely careful" with KYC and custodial services. It's not about whether the service can be trusted or not; it's about trusting the service. Trust itself is the fundamental issue, not whether what you're trusting with private information, money, or anything is actually trustworthy or not. 

We fully trust the service, the problem is that they cannot keep our data, such as compromised third parties or data exposed by irresponsible people, the custodian service should keep our documents but they do not know when this will happen.

In my opinion, trust them it should be, honestly because it's one of the ones in use today, and we still use the service, right? So about contrary to the principles of bitcoin sometimes this thing they never pay attention to.

[Zlantann]

An exchange can prove that it holds a certain amount of coin without necessarily proving that it can be able repay everything it owes to customers. Being able to publicly verify reserves is valuable but they don’t give you the full picture of the exchanges finances. For instance an exchange could control 1000btc while still owing customers 1200btc and seeing 1000btc on chain wouldn’t reveal the discrepancy by itself. I wouldn’t say proof of reserve is useless as it can provide meaningful evidence, the point being that its value depends on what is verified like customer liabilities, if and whether they are accounted for.

Third party could possibly help oversee and verify those liabilities and other records too but that’s another layer of assurance separate from bitcoin’s on chain transparency.

Bitcoin's core motto is "Don't trust, verify". Any platform or crypto project that cannot be verified shouldn't be trusted. This is why it is risky to keep money in centralized exchanges or hold money in the form of altcoins. Tether and other stablecoin operators claim that they have excess reserves to back their coins. The problem is: how can we verify that they really own the U.S. Treasury bills, cash, gold, and other assets they claim they have? They have not publicly published an audit report done by a reputable audit firm.

[boyptc]

— Trustlessness: don't trust them with your funds, private data etc  unless they're  proven to be secured or can't be compromised. The low trust is why you should generate your keys in very secure manner, avoid (or be extremely careful with) kyc or custodial exchanges.

Sadly, nothing can be proven that it can't be compromised and secured. All the security measures can't be relied onto these exchanges or the wallets we use.

There's a need for personal way of securing and doing things. Security is actually stretched and there's more about choosing which wallet or exchange we use.

The practice on how we use them is also part of making our security more effective. Because with what I see, people just suggest using an exchange and wallet because they're safe and secure but malpractice and ignorance could defeat that purpose.

[traderethereum]

— Trustlessness: don't trust them with your funds, private data etc  unless they're  proven to be secured or can't be compromised. The low trust is why you should generate your keys in very secure manner, avoid (or be extremely careful with) kyc or custodial exchanges.

Unfortunately, we can't avoid KYC on exchanges but we can be selective choosing exchanges to transact.

If we can selective dealing our crypto assets including transact it in public space, we can have privacy and not sharing our identity without we know.

Don't tell anyone we have crypto assets avoiding curiosity from others so we can keep us secure and have privacy. We responsible to ourselves so be careful using public services.

[menachange]

un_rank, fair point. Bisq or Haveno take the middleman out, and for people who can live with slower trades and less liquidity that's the better option. On privacy, I'd say the user stays private only until one of their addresses gets linked to a name, for example through a withdrawal from a KYC exchange. After that the whole history becomes readable, so on-chain transparency still costs privacy, just later.

PrivacyG, agreed. I didn't mean it becomes trustless, it still needs trust. My point was only about how much you put at risk while you're trusting them.

[Filicius]

Privacy and transparency don't sit well together either.

All that is publicly available are details of transactions and addresses. The user behind the account stays completely private.

- Jay -

Yes, of course, but once your personal data are linked to certain transactions and/or addresses, then it is easy to track them, and selling that info seems to be a very profitable business model for data brokers nowadays. Not even the very expert are safe from making a mistake that reveals their identity at some point. But among the options pseudonymity seems to be quite useful as a balance between privacy and transparency.