COLD WALLET VS EXCHANGE
How can I store my cryptocurrencies safely? Or where can I store it? I will share my views on this in this article.
This issue is a question in the minds of those who are new to crypto or those who have been using it for a long time. Everyone, including me, is looking for where it is safer to store cryptocurrencies. I will try to explain by presenting current examples to you. Generally, the first thing that comes to our mind is cold wallets. So what is a cold wallet?
(Photograph 2)
Cold Wallet is the general name given to offline wallets used to store Bitcoin and other alternative cryptocurrencies. Hardware wallets come in the form of physical electronic devices that use random number generators to generate public and private keys.
Let's say we withdraw the crypto money from the stock market and put it in a cold wallet. From now on, we ourselves are responsible for the insurance of that crypto money, the guarantee of that money, and all the security of that money. While creating the cold wallet, we are given security words. Once we lose those words, we can no longer access that wallet. What does this mean ? All responsibility belongs to us. Yes, you may have protected the money against theft, but you need to know that you will no longer be able to access that crypto money when you lose the recovery words as soon as you lose that wallet. As far as I see, investors keep coins with less value in their cold wallets, not btc or eth. Recently, the trend of changing the contract address has started. It enters a different contract address or their own network. I don't see any problem with it getting into their own networks, but it makes me think about it getting into other networks. This is a problem for me. Do not perceive this as a wrong problem, I will explain it to you in a moment. For example, you went and bought one. The contract address for this token changed. You said "I don't want to keep it in the stock market, I trust the cold wallet" and sent it to your cold wallet. (I am currently interpreting it with the logic of 'put it in a cold wallet and forget about it'). After some time passed, there was a change in the contract. Immediately after that, you forgot and never followed up. 2-3 years have passed since then. Next thing you know, there is an increase in the token you bought and you made money. When you tried to send the money from the cold wallet to the stock exchange, you saw that the contract address changed. What happened in this case? You have been victimized. What I see with most coins changing contract addresses is that they give investors a certain amount of time to change their holdings. They warn that at the end of this period, the money they hold will be invalid. Long-term investors and investors who think "send it to a cold wallet and forget about it" become victims when they do not follow this.
So what should users do?
(Photograph 3)
I will give examples based on my own work. It is not a recommendation. I prefer to keep them on the exchange. There are a few exchanges I trust, I think my tokens are safe there. For example (binance exchange, crypto.com). I explain the reason why I keep it in the stock market. crypto.com suffered theft of $30 million. What did crypto.com do in this situation? It gave its users back the money for their stolen tokens. The reason why this was refunded is that crypto.com sees itself as responsible for this theft. Users trusted us and handed over their money to us, but we could not protect them, they said. Stock exchanges that have proven their reliability do not victimize their investors when they are attacked by theft. If they do, they will lose their prestige in the market. Binance spent $1 billion on a relief fund against these thefts. Would you look at the money transferred to the aid fund? Unbelievable. Let's come to the contract issue. The exchange itself changes the contracts of the tokens on the exchange. We do not need to follow up. In my personal opinion, it makes sense to keep money in reliable exchanges. Not everyone has to agree with this idea. Please indicate in the comments where it is safe to keep your tokens and why. Thank you for reading.
Kind regards ; mc77
Resources ;
Cover image source https://resources.hi.com
1.image source binance.com
2nd image source www.getmidas.com
3rd image source https://www.pngwing.com/
