If you want to get your hands on some cryptocurrency then unless you’re given some by a friend or have tokens airdropped into your wallet then you’ll need to buy it on an exchange. Cryptocurrency exchanges are the best way to get some coins, but many persons who use these exchanges make a mistake after they’ve gotten their tokens. They keep them on their exchange wallets instead of transferring them to a private wallet.
Is it safe to store Crypto on Exchanges? Storing tokens on exchange wallets can be dangerous for a number of reasons.
1) Lack of Ownership
We can purchase a coin/token from an exchange and store it in exchange’s wallet but we don’t own that wallet. The exchanges have our private keys for the wallet and own our wallet. These wallets are just hot wallets ideal for trading. If there is a hack or any other issue on the exchange your wallet is compromised and you don’t have any control over it. This is the primary reason experts don’t recommend storing cryptocurrency on exchange’s wallet and advice using paper/hardware or app based wallet.
2) No Regulation
Digital money trades are the combination of decentralization and centralization. The entire reason behind blockchain and cryptographic money is to advance decentralization. Be that as it may, trades are in reality concentrated, which makes various issues. Right now, the digital money world is somewhat similar to the wild west, nobody is in control and there aren’t numerous standards. This implies in circumstances like the ongoing examination of a digital money trade in South Korea, resources can get solidified. While proprietors of exchange can tell their clients that their crypto resources would stay safe, they can’t ensure this. Likewise, because of the idea of digital forms of money, the exchange would have no obligation to return cash to their clients. There is no managing body considering trades answerable for returning lost cash to clients, nor is there any protection on the off chance that something occurs.
3) Prone to Hacks
Notwithstanding the absence of guideline and failure to ensure the wellbeing of benefits, there is additionally the danger of a exchange getting hacked. Exchange hacks are moderately normal, and because of the absence of guideline, when the coins get lost, that is it. The proprietors of the coins can’t get them once again from the trade. While blockchain itself is secure and basically unhackable, the brought together nature of a exchange makes them powerless.
All in all, it’s not the most astute intention for keeping your coins on a exchange. While they might be convenient, it’s much better to get your own wallet to store crypto coins you own.
