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Not Your Keys, Not Your Crypto.

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What happens if an exchange shuts down or goes bankrupt while your crypto is in it?

Your crypto isn't your crypto if it's on an exchange.

I know I've deviating from my series again, but I've had an insane day and just don't have the mental capacity to write an educational post right now. Hopefully you weren't sitting on the edge of your seat waiting for Phill's next edition of "What is Decentralized Finance (DeFi)?"... Odds are you probably were waiting all weekend thinking about how much of a banger it was gunna be.

Don't worry though, it is a banger. It's just a banger for a different day. Alright, I'm done lol. Anyway - I wanted to talk a little bit about how important it is to be in control of your own crypto. I read that PayPal is finally allowing withdrawals of BTC and ETH to external wallets finally, and it got me thinking. A lot of people that are trading crypto or buying and holding crypto are literally never withdrawing it from whatever exchange they use.

Take Coinbase for example, I have friends and family that don't have an actual wallet. They have a Coinbase or Binance account and that's where their assets live. Look, if you truly trust that company to hold your assets, then by all means keep a little on there to trade with. Think about it though. Your cryptocurrency is sitting in the wallet of a company that could shut down, freeze your account, go bankrupt, or really anything.

Do you want to be the guy trying to contact support when they're holding your assets hostage until you give them Know Your Customer documents?

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I'm not saying you need to go out and spend a bunch of money getting a hardware wallet like a Ledger. It certainly increases the level of security, but it's not necessary. There are plenty of software wallets that you can install on your computer or smartphone. All I'm saying is, not only are you exposing your funds to being frozen or monitored by the exchange, but you're exposing your funds to potential hacks.

If a hacker compromises the exchange itself, which has happened quite a few times to different exchanges, your funds are at risk. More likely, if your account is compromised by a hack or phishing, your funds are at risk. Most people even use their phone number to receive an authentication code for the exchange. Even that isn't as safe as it sounds, considering people suffer from SIM swap attacks where the attacker literally steals your phone number to get a code to access your account.

So if you're going to rely on an exchange to hold your crypto, at bare minimum use an authenticator app like Google Authenticator. Use a password that you don't use for literally everything else. It's small things like this that can really save you a lot of headache. I do happen to be of the opinion though, that you should absolutely custody your own crypto.

Even if that means downloading a wallet like Edge Secure Wallet or some other wallet app that can be locked with biometrics or passwords/passcode. No one can tell you when or if you can move those assets, and no one is going to ask you why you're moving funds. You have your own private key, your own recovery phrase.... You are your own bank.

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Not your keys, not your crypto. If you're not holding the private keys to your crypto wallet like your Hive account, then you don't have control over those assets. Do yourself a favor and move most of your funds to a safer wallet than an exchange account. We're in a very uncertain period of extreme fear in the markets.

People are desperate. Scammers are out. They're waiting to find their next victim to drain their wallet. If your funds are in a wallet outside of the exchange you use, you're already 100% safer than your buddy that holds all his crypto in PayPal. If you have any significant amount of funds, get a hardware wallet. Spend the $80-100 and get some peace of mind knowing that no one can steal your crypto.

It's time to take responsibility of your assets out of the hands of their parties. Trust no one. Hodl strong. WAGMI.

Post written by: @l337m45732 aka NiftyPhill.

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