Is Leaving Crypto In Exchange Safe?
A cryptocurrency exchange is a marketplace that enables its users to trade cryptocurrency for assets such as fiat money or other cryptocurrencies. The online platform acts as an intermediary between the buyer and the seller, wherein, the exchange makes money through transaction fees or commissions. However, to make the transactions, the users have to place their cryptos in the exchange’s wallet.
Cryptocurrency is often known for its risk of volatility, but that is not the only risk involved in the crypto space. One of the other major responsibilities of cryptocurrency is keeping the private key safe. A private key is a complex form of cryptography that enables access to your cryptocurrency. If you don’t have access to your private key, you don’t have your crypto.
To connect the dots between a crypto exchange and private keys requires leaving your cryptocurrency and private keys on the exchange, and it comes with risks since the exchange is prone to be hacked, and possibly all your cryptos could get stolen.
In this blog, we will discuss If Leaving Crypto In Exchange Is Safe?
With active trading, it is apparent for the traders to keep their coins on an exchange, but what about the ones that are not actively using? It is essential for those users to not place their holdings on an exchange for too long. Keeping your digital assets on exchange’s wallet comes with risks; thus, storing your crypto for a long time isn’t a good idea especially when there are plausible chances of exchange being compromised. Just like how great power comes with great responsibility; similarly, you need to take measures when you take your private keys off an exchange. Either way, you are responsible for keeping your coins safe and secure.