Crypto Academy Week 2 Homework Post for @gbenga | WHY I PREFAR TO KEEP MY COIN IN A WALLET AND NOT ON AN EXCHANGE
1.1 Introduction/Definition of key terms
1.1.1 Wallets
Wallet is a personal holding facility that helps the user to keep, send, track and recievie coin or crytocureencies. The user has the active keys and is the only one able to freely access the account.
1.1.2 Exchange
An exchange is a trading platform which is owned and operated by a third party who maintained authority over the account, transactions and exchange.
1.2 Benefits of keeping coin in wallet rather than on exchange
1.2.1 Exchanges are hot target for hackers
Like our stemmit professor @gbenga said in his lesson, cryptocurrency especially bitcoin and several exchanges platforms have attracted hackers because of the volume of the funds its houses. Therefore, it is very possible for hackers to potentially move away billion dollars worth of coins if they successfully cracked down exchange’s security architecture. To many these might look impossible but in actual sense nothing is impossible especially if the stack are high and it has to do with websites. Even exchange platforms like Binance, Bitfinex, and MtGox that boost of good security have been hacked successfully in the past, resulting to massive loss of funds.
1.2.2 “Have the keys and control the coin”
Although, this quote has been used in connection to bitcoin but it also applies to all other crypto currencies. A wallet gives the owner control over the keys to access the coin, which alone is a backup that will help recover coins should the exchanges get hacked. The major distinguish feature of a coin like bitcoin is the unconfiscatable nature. When funds are left on exchanges the hallmark purpose of designing the coin has been defeated. There have been cases where exchanges locked or block account for several reasons, although some are easily rectified other might be that easy to fix.
1.2.3 Let exchanges serve as exchanges
That might sound funny but let exchanges serves its singular purpose. It was design to transact cryto currencies (buying and selling) not to keep or save funds. This is same the same reasons while hard earn cash should not be left with money exchangers or money remittance; rather it should be kept safe in personnel wallet where I have control over the keys.
1.2.3 What type of wallets will I keep my coin then?
Mobile wallets: I will rather keep my money in mobile wallets especially if the coins are in small amounts although huge amounts of coins or cryto currencies will be kept in hardware wallet. These mobile wallets are installed on mobile phone and they give easy access to funds. They are also convenient and free in terms of easy download from android or google play store.
Hardware wallets: These are also small devices design mainly for safely holding coins or cryptocurrencies. It is small enough to fit into pocket and like I mentioned ealier it is better and safer for keeping a significant quantity of coin or cryptocurrencies. Therefore, a hardware wallet is my best choice for holding coins without fearing of being hacked. Some have complained about the convenience of holding a hardware wallet but for me safety comes first.
Conclusion
I want you to know that safety of funds first before convenience because loss of funds will cause greater inconvenience. Also we need to always remember, “Have the keys, and control the coin”.
Thank you for reading
Cc: @steemcurator01
Cc: @steemcurator02