Hi there everyone, it's TheRingMaster back again with yet another crypto blog, well this time it ain't about the crypto but where you keep it.
There's a chance some of you that would read this blog are already aware of this saying of mine;
A crypto exchange is called an exchange for a reason
Cryptocurrency as a technology is certainly here to stay. There's no doubt or controversy about this. There's are those that think perhaps the government will end up taking full control over the crypto space and crush it but that's not going to happen.
Just so you know, although I'm not in favor of any country against any other country, the BRICS nations have created their very own currency and it's crypto. Web 3 which is the next internet does perfectly well with cryptocurrency. These are all signs that Crypto will most certainly dominate the future.
However there's one major risk which to be honest I wasn't too aware of until I learned it and thank God I had to learn it from the mistakes of others rather than myself because that would have certainly cost me a lot.
A Personal Story Of Mine
The idea of decentralization and financial freedom was what attracted me to the amazing world of cryptocurrencies just like it did many others. crypto is truly an exciting space to be in and at the moment, most of my money is in stable coins although I still like spending cash a lot.
Yes crypto gives freedom and control to the users and owners but there was one crucial lesson that I learned, never ever leave your crypto assets on exchange platforms.
When I bought my first bitcoin which wasn't exactly anywhere close to 1 whole Bitcoin, hehehe, I left it at the exchange where I acquired it thinking that it was safe. To be precise it was the Binance exchange platform.
I was very new to the whole cryptocurrency thing so I didn't have anyone tell me the difference between a Cryptocurrency Wallet and a Cryptocurrency Exchange Platform. Since Binance is so popular I actually thought it was a great place to keep my crypto. I had a few Satoshi of Bitcoin worth around 50 USD and I kept some USDT as well because I prefer the stable coins more.
However, after hearing a lot about loss and hack stories against exchanges and I don't know if you were aware about the whole friction between Binance and the Federal Government of the United States but that led to a whole lot of Fines and allegations against Binance CEO, Changpeng Zhao popularly known as CZ.
When that happened I started getting worried. The value of people's tokens dropped rapidly and there were a lot of cases of fraudulent activities that led to people losing their money on exchange platforms. This made me realize the centralized nature of Exchange platforms.
Yes Cryptocurrency is decentralized but the exchange platforms people trade their tokens on are not.
For real, the exchange platforms are basically like are a honeypot for hackers since they store a huge amount of cryptocurrencies. In case an exchange is hacked into, your funds can disappear in an instant. Literally everything you own there can be gone in a split second.
The dangers of storing crypto on exchanges
I would recommend only sending your crypto assets to exchange platforms only whn you're ready to make a trade, otherwise keep it away from those platforms. Exchanges most often become victims of cyber-attacks. There have been some infamous hacks, for instance the Mt. Gox episode, where people were relieved of huge amounts of money. Even the most secure exchange is vulnerable to these hazards.
Thousands of people lost their money through this serious disaster
Another danger you will be in by keeping your crypto in exchange platforms is the lack of control over your own crypto assets.
One common statement in crypto space is “Not your keys, not your coins”. Users of Hive will most definitely be familiar with this concept.
For instance, my Hive account belongs to me and the only thing that proves it is that I have the keys, if I lose those keys, I have lost the account and all the assets no matter how big or small it may be.
While you keep your crypto on an exchange platform, you don’t own any private keys. That's a very serious situation to be in because that technically means that the crypto assets you have in the exchange platform belongs to the exchange.
In case the exchange freezes your account or goes under, there is a possibility that your funds might be locked in. The funny thing is if the platform is able to convince the government that they haven't stolen your money, that's the last time you're seeing that money. This is really how unsafe it is to keep your crypto on exchange platforms. Only go there to trade but not to store you assets.
Keeping your crypto on an exchange platform is equivalent to handing over your Hive Keys to someone else hoping that they don't take advantage of it.
And one thing you should know about the Government is that they really hate Cryptocurrency technology so you losing your assets on an exchange is a great excuse for them to tell you "I told You So, You Should have kept it in a bank Where we can keep it safe for You" which obviously means they would have the control.
I don't hate the Government but they've not exactly been the most honest.
Another issue I see is that most if not all Governments worldwide are yet to understand how best they can regulate cryptocurrencies. There's a chance they might pass laws or bills that might change how crypto is regulated. These instant changes in regulations may force exchange platforms into freezing or taking control of assets, hence leaving you without access to your money. This can happen anyday anytime.
However if you keep your crypto in a safe and actual crypto wallet you're immune to these dangers
Transition to Personal Wallets
When I became aware of the possible risks, I made up my mind to transfer my cryptos into a personal wallet.
Infact my plan on Hive is quite simple - Since I have a free wallet here, I prefer to keep most of my assets here. I'm yet to hear any security issues with keeping my money here. As time goes on and I see more security in keep money on the Hive Wallet I'll probably make Hive my only wallet and transfer my funds to it.
From the little I know about crypto wallet, they are of different types including hardware wallets like Trezor and Ledger, software wallets and paper wallets. A hardware wallet was the logical choice for me because it’s the most secure one as it is offline and nearly unhackable. Although the downside is if you break the hardware, you break your money, hehehe. Also if the hardware gets stolen, your money is gone.
But hey, there's risk in any investment right?
It was quite expensive in terms of money and time spent but I have no regrets about that. Now, I manage my private keys and my cryptos. But it's not that much crypto,.I ain't exactly a millionaire.
At the moment, the Trezor One wallet costs around 60 to 80 dollars, I don't know how much it would cost in your country but that's one of the most affordable ones in my opinion. Would love to hear other opinions on this too in the comments.
Here's how to secure your crypto
I would always recommend moving your funds to an actual crypto wallet if you have it on an exchange. If you trust the exchange so much, well that's your decision but like they always say; better safe than sorry.
You can start by looking into a range of wallet and choose the one that suits your needs. There are quite a lot out there so I would recommend getting professional advice before getting one.
I think computer wallets like Ledger or Trezor are good starting points for beginners. There are always instructions to help you set it up but for me I had to ask a good friend of mine for help. I'm not too experienced at this at all, hehehe
You can follow the provided instructions to set up your wallet. Just like they say in the Hive Intro and Instructions page, ensure that you back up the keys.
There would be a recovery phrase you can back up and place somewhere safe because of how important it is when you're trying to recover the wallet if the need be. Never forget to transfer your crypto from the exchange to your new wallet. Like I said earlier, only have your crypto in an exchange if you're ready to exchange it for another crypto.
I'm sure anyone that has made some Hive transfers is already aware of verifying that it is the right address you're sending to. Crypto transactions cannot be reversed so you either get it right or forget it, it's gone. So friends, when moving funds, make sure to verify addresses and amounts again.
Cryptocurrency is certainly the now and the future. There's so much freedom we get for having our money in crypto. For me, the one thing I love about crypto is the level of control I have. There's very little waiting time when transacting crypto. If you compare a Bank transfer to crypto transfer, it's almost ridiculous.
I remember sitting at the bank for hours just to withdraw my own cash I put there about 3 months ago. I laughed in my head, and said to myself that was the last time I'll put the money in that particular bank. Their waiting time was no different from hell itself, hehehe (A Little over exaggeration here)
Thank God for Crypto, it's the future so it's good to learn the necessary things about it now and I believe the most important is this;
You Own the Crypto and You are the only one responsible for keeping it safe.
Thank you so much for the time guys. I would love to get your feedback on this blog.
