In what ways does the saying 'not your keys, not your coins' highlight the potential dangers of centralized exchanges?

3 answers

• Nov 26, 2021 · 3 years ago
  The saying 'not your keys, not your coins' serves as a reminder of the risks associated with keeping your cryptocurrency assets on centralized exchanges. Centralized exchanges are vulnerable to hacking attacks, where hackers can gain access to users' funds. If you don't have control over the private keys of your cryptocurrency, you are essentially relying on the exchange to secure your assets. However, history has shown that even well-established exchanges can be compromised, leading to significant losses for users. By holding your own private keys, you have full control over your coins and reduce the risk of losing them due to exchange hacks.
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• Nov 26, 2021 · 3 years ago
  When you store your cryptocurrency on a centralized exchange, you are essentially trusting a third party with your assets. The saying 'not your keys, not your coins' highlights the potential dangers of this arrangement. If the exchange experiences technical issues, goes bankrupt, or engages in fraudulent activities, your funds could be at risk. Additionally, centralized exchanges often require users to go through a lengthy verification process, which can lead to privacy concerns. By holding your own private keys, you can ensure that you have full control over your coins and minimize the risks associated with centralized exchanges.
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• Nov 26, 2021 · 3 years ago
  As an expert in the cryptocurrency industry, I can tell you that the saying 'not your keys, not your coins' is a fundamental principle in the community. It emphasizes the importance of self-custody and highlights the potential dangers of relying on centralized exchanges. At BYDFi, we believe in empowering users to have full control over their funds. By using decentralized exchanges and holding your own private keys, you can eliminate the risks associated with centralized exchanges and ensure the security of your cryptocurrency assets.
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