3 Reasons You Should Not Leave All Your Crypto On An Exchange
At the time of writing this article, we have come upon the 1-year anniversary when Bitcoin was the top of its price trajectory (to date) of $19,783.06. Since then, many new investors came into the fray, driving Coinbase’s user base over 20 million strong. Hundreds of new exchanges have also been created along the way. This is an interesting time to make a new recommendation and set the path for how we should manage at these crossroads.
A year later, and BTC and all other crypto currencies are in a ‘readjusted’ state, to put it mildly. Most users who opened those exchange accounts in an urgent state of FOMO, have resigned themselves to just HODL their crypto positions and have, pretty much, written off those funds. There is hope that they will eventually recoup and perhaps even make money one day. The lottery ticket is bought, and FOMO has been dissipated. These crypto assets are pretty much idle and looking to be sitting there for at least the medium term.
If this is your case, please read on. We can likely save you from a potential disaster and, in the meantime, introduce you to a whole new world of awesome.
Here are 3 reasons to transfer some of that crypto to your own wallet.
- Exchanges are honey pots: There have been over 50 hacks of crypto exchanges since 2011 with losses estimate around $1.7 billion. Exchanges are holding your crypto in few, highly concentrated wallets and are holding the private keys on their servers. Therefore, these are high-value targets for hackers worldwide and need to fend off millions of attacks per day. Some exchanges are better protected and better insured than others. However, maybe you want to restrict your balances on these to what you want to trade or convert back to fiat? Sounds reasonable to me. Use your trusted exchanges to make trades, but use your trusted wallet(s) to manage and use. If you don’t know if your exchange can be trusted to store your crypto, do your research and opt for the safer bets in the market. You can still use a certain exchange if it offers a specific trading pair — just don’t keep the assets there after the trade is executed.
- Experience the freedom of crypto: The whole point of the crypto revolution was disintermediation and decentralization. By trusting your assets to a 3rd party you are pretty much defeating the purpose (and the power) of crypto. Holding your crypto in your own wallet — no matter how small the amount — will get you trained to a new paradigm where you are the custodian of your own assets! When you get a hot wallet or a cold storage wallet (one that is NOT connected to the internet) you are responsible for safeguarding it. It is both terrifying and exhilarating and we highly recommend it. The process involves creating a recovery phrase of 12 words that you must keep. The concept is amazing because it means that you can recover your funds anywhere in the world. A refugee can cross a border without having to ingest jewelry to avoid being confiscated by crooked officers and criminals along his journey. The challenge is safely storing these words without having to memorize them. A clever way to do it is by having it in stainless steel like BillFodl’s solution
- Get more and do more: There is so much that crypto assets can unlock and enable today and in the future. Move your crypto to other places that give you more options, that educate you, and that help you make the transition to a crypto economy. A sophisticated, extensible wallet, like DoWallet is creating, helps users manage their assets and provides lots of fun, money-saving, and money-earning options for holders of crypto. Did you know that you can send $20 to your friend in Peru without using a 3rd party service and without paying a fee? Did you know that if you have a small business, accepting crypto can save you the entire transaction fee of up to 3%?
So stop being a passive crypto holder and become an active crypto DOer! Take control of your assets and help make the promise of crypto into reality, because the only way that your assets will come back to where they were a year ago is if the use case for crypto is proven. Keeping these assets locked up in a 3rd party’s vault isn’t going to do it. The power is in your hands.
And if you know others in this same boat of crypto doldrums, share DoWallet and share the future.
If you have other ideas and suggestions on how users can use their crypto better, hit the big blue button and please share with us!