The Importance Of Being Earnest: How Not To Lose All Your Money When You Choose An Exchange
By Nikita Kosmin
We’re thrilled to be able to provide another layer of protection for our users, whether that means using state-of-the-art IBM Watson AI, improved functionality, token dynamic research, or cross-referencing reviews. The butterfly effect is unpredictable, but one thing is for sure: when you change the world for the better, good things happen to you.
Now, we know what you’re thinking: the world is full of people who don’t share the vision. Let’s take a look at how you can protect yourself from people who will take you for a ride — and more importantly, assemblies of people with flexible moral compasses sometimes known as exchanges.
Why now?
We are adding a new section, which will allow our users to leave reviews for exchanges. The purpose is this: we want to be able to assess the good, the bad, and the ugly, and give our users as much background research as possible so they choose the best possible product with minimum effort. The free time thus can be invested into something useful or just plain fun.
Being a good businessman is important, but, as we learned from Tokyo Drift, knowing who to trust is more important than money. Ultimately, trusting the wrong person can negate all the years of hard work and jeopardize your close ones’ well-being.
In case of exchanges, as some people think, things are different. They are better organized, there is a vertical of authority and some kind of accountability. The truth is that with exchanges different rules apply.
What’s wrong, really, with trusting other people who you don’t know and don’t really have any information on, with your private keys? Exactly.
No regulation
This is the first downfall of exchanges. Given absence of a regulator, the fact that anything is decentralized means no-one is vouching for the safety of your money.
A bank vouching for my money didn’t save people from being locked out of their accounts on many occasions, you’ll say, but in case with banks, there are external protocols that control banks, and many internal protocols controlling employees, as well as an escrow. As far as exchanges are concerned, we don’t currently know of any regulation controlling exchanges (or even any regulation controlling Bitcoins, at least according to G20’s notes).
There are no guarantees at all that the exchange won’t convert your currency into theirs. Unless you store your Bitcoins taped to your waist there’s really no way to guarantee their safety. What we’re talking about here is the likelihood of a threat, and in the case of exchanges it’s greater than it seems. Not having the private key pretty much equals not having the money.
Getting hacked
We probably don’t need to tell you this, but the amount of hacking cases in 2017 when it comes to crypto is staggering. Experts predict more cybercrime in 2018. What more incentive do you need to be careful with exchanges? Most of this information is on everyone’s mind who’s dealing with crypto-assets, so we will refrain from platitudes and just direct you straight to CoinSutra.
The ultimate fact is that, despite the fact that the code is being worked on and improved pretty much since it went live and there are many more security updates now and the crypto is a lot safer — everyone can be hacked.
Biased
Exchanges are about the one thing that remains stable in this unstable market: financial gains. Essentially companies out there have their own interest at heart, and, while companies are interested in creating a good rep traditionally because they will obviously go on indefinitely (at least that’s the plan), the crypto market is highly unstable.
A lot of these companies don’t plan a stable future and don’t operate accordingly because the market can collapse any minute. Long story short, many exchanges out there want to make money, and they have no particular interest in keeping you financially stable. It’s not personal. It’s just business.
So what do you do?
Although we think prophylactics beat curing 10 times out of 10, we think there are steps you can take to make things better:
· Choose an exchange that will compensate your money if it is lost.
· Store most of your money on a physical wallet and stick it somewhere no one will look for it (within reason).
· Sign up for as many newsletters and news notifiers as you can.
· Diversify.
· Compartmentalize.
· Overcome.
What do you mean prophylactic?
If you’re looking for an exchange to store your money in, remember that in this market over 80% of promotions and reputations are fake.
Use Revain review system to find out what real people think and go on the deeds, not words. The consequences of choosing wrong can steam-toll over your finances and your self-esteem.
We strongly recommend using our system to find and join the best exchanges, as voted for by the people and leaving a breadcrumb trail for others. Pay it forward, and let’s make this world a better place, both financially and in terms of ecological living on all levels.
