If you don't hold the private keys that give you access to your coins - the coins are not fully yours

in caution •  10 months ago

Although I will bring up some controversial points in this post it is not meant to scare anyone from using exchanges or other type of middlemen services - its mainly to remind you to be cautious with your crypto funds.

Some of you oldtimers who've been around to see what happened to Mt. Gox, it seems as though times like these where Bitcoin and most other currencies are at a peak they bear the biggest risks for something similar to happen - since it can not be predicted, it can happen to the services you trust the most. After the all time high of Bitcoin in November 2013 reports were flooding in on Reddit with users not being able to withdraw their coins from the biggest exchange with most volume at the time. Although not everyone was affected, it caused a lot of fear and uncertainty. It took Mt. Gox several months of back and forth excuses until it was deemed insolvent due to a "hack" that made the company lose 744,408 Bitcoins valued today at ~$8.2 billion. The bad taste this left on people's mouths and the history and image of Bitcoin was really bad, reading the posts of all users showing how they had lost anywhere from 0.01 to 4000 BTC was crazy.

Yet people never seem to learn, or take the advice of the people that warned them that this could happen and can still happen to this day.

One of the biggest advantages to Bitcoin in the beginning was that the coins you owned were yours, you had them in your wallet and only you had the private key to access them. This was revolutionary on its own considering how banks had been losing customer's funds for decades - yet we still decide to trust exchanges or sites that hold our cryptocurrencies for us. Of course many want to use them due to trading and it could be a reason of the swings we see in cryptos since many don't hold them on exchanges at all and that causes a lot of volatility when new players enter the market to trade their fiat for cryptocurrencies. This also tells you though that the majority of users hold their tokens safe and off exchanges. It baffles me that to this day we have almost 40 million Steem (almost 20% of the total supply) laying in the two biggest exchanges Poloniex and Bittrex.

The fear that arose during Mt. Gox came back a bit when Poloniex was not responding to tickets for a long time and many where warning others to remove any coins they could in case another gox was about to happen. Thankfully Poloniex got their things together and people didn't lose their coins but I hope people learned that when the time comes it is often too late and you will feel helpless having left too much value on these exchanges - don't get tricked by the trading profits and loan interests too much, remember that we are here for the long term and those potential profits will still be good considering you won't risk losing a big amount of your coins. I am glad that Steem has added incentives to leave the currency in Steem Power and not in liquid form on exchanges, after all the wallets here are one of the safest places you can leave them on.

Similar fear has come back again now with one of the other big exchanges called Bittrex - I personally have never had a problem with this exchange and I'm not saying there is a risk it could turn into another Mt. Gox, I just want people to be more safe with their coins out there. There have been a lot of reports from various users lately saying they have either been locked out of their accounts or aren't able to move their coins, you can find most of these posts on the unofficial subreddit r/bittrex, I've personally seen a lot of similar reports roaming around in the r/cryptocurrency subreddit lately. I hope its just a false flag and that they will make things right much like Poloniex did. There was an interesting post trending in that subreddit today though, showing some messages between Bittrex and the owner of the subreddit:

People started to wonder why they wanted the subreddit to be taken down, especially in the midst of all these unresolved tickets and the aggressive tone they wrote in about the subreddit. According to Bittrex they didn't want users to confuse the subreddit with being an official subreddit linked to them the same way Twitter has their verified accounts and exchanges such as kraken have their own subreddits. They later wrote a post in the subreddit and thanked the moderators in there for changing the logo of it.

Its a great idea that they consider to open an official subreddit in the future, hope it will help them out with costumers who have unresolved issues. Reminds me of back in 2014 when I had BTC stuck on kraken and they instantly replied on their subreddit to me and resolved the issue. Hopefully they could consider creating a Steem account as well while they are at it. :)

This was a funny comment to their response by a Reddit user I wanted to share:

In all seriousness though, please be careful with your currencies. I know the profits that can be made daily are good and due to the high volume its all just percentages no matter what amount of $ you are trading with, but please don't leave more value in other people's hands that you can afford to lose. We can never know when another exchange decides to Mt. Gox on us.


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I recommend https://www.bitshares.org - it's now as easy to use as Steemit.

  1. Create a username, generate a password
  2. Log in
  3. Deposit coins
  4. Trade
  5. ???
  6. PROFIT

Best part: There is no AML crap. It is a decentralized exchange thus you are free to deposit and withdraw as much cryptocurrency as you like.

You are also free to move and exchange your BitUSD (like TetherUSD but not centralized and backed by BitShares) with any third party. Again, no limits.

Stop using centralized exchanges. BitShares offers a decentralized exchange that's just as easy to use, with a nice web UI.

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Thats a good one! Thanks for the info. Always the minimum Amount on the exchanges.... make me angry. Thanks once again

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Thanks @someguy123. Are the ??? the chosen crypto purchased?

I like the decentralized aspect.

free

Are the fees reasonable?

Peace.

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I haven´t seen one in my life!

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oh yeah,what I meant was that in my country I didn´t saw one on the street

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It a really is cool concept! Just think you can have a million bucks folded up in your pocket !

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Indeed, but also gives me shivers carrying too much money in a paper

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You are so right! having all of your assets in one place is never a good idea! At least your average robber today is not aware of the value and storage options of cryptos! So at least we have that going for us! hahaha

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the average robber doesn´t even know what bitcoin is and I hope it stays that way

There are only two types of bitcoin exchanges. Those who have already been hacked, and those they are still trying to hack.

“Don’t leave your coins on an exchange.”

“Yet people never seem to learn, or take the advice of the people that warned them that this could happen”

Correct! There is a fool born every minute. The only way to learn is the painful way. You tell a child not to put his finger in the candle, because it will burn. Yet every child still puts his finger in the candle, as soon as your back is turned. That child still doesn’t learn to listen to his parent, but he does learn not to put his finger in candles.

It’s just the way the world is.

Now we have the internet, people should learn the risks themselves. We no longer need a nanny state trying to protect pepole from their own stupidity.

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completely agree

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You are not joking! After doing some research i ordered a ledger right away! You really never do know when someone will be hacked or if you yourself make a mistake and leave your own computer vulnerable!

I feel like people don’t really learn until they are forced upon it . Money is tough to earn better to be safe than sorry

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That's a great Comment I appreciate your comments @journeyoflife 👍👍

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I feel like people don’t really learn until they are forced upon it . Money is tough to earn better to be safe than sorry

@journeyoflife, I think someone plagiarized (receiving profits for) your comment. (See below).

You may or may not want to address it.

Peace.

I just using. Blocktrades.

How can i use bittrex??

Any one can help Me?

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Blocktrades is actually much better cause it doesn't keep your coins it just exchanges them for others from one of your wallets to another similar to shapeshift.

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@acidyo just warned you not to use exchanges unless you want to trade your coins.. be careful mate. Download a wallet ( i recommend blockchain since it has support for both ethereum and bitcoin and keep your coins in there. Do not put your coins in exchange unless you have to trade them..

An excellent reminder to all. And if you need to use an exchange be fast and don't sit coins on them for long!

I also experienced with poloniex when they help my SBD for nearly 20 days and never responded to my tickets. Now I have learnt a lesson and never will be trapped there again. Your post has also clarified the issue more clearly.

I like blocktrade more then bittrex. Because i have never used it.

Anyone reading this... I lost 100's of BTC at MtGox. Life changing.

Put your coins into cold storage. If you don't know how, find out now.

😄😇😄

@creatr

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I store the adressess on a plain text,zip it with password then upload it to gdrive

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Sounds potentially risky... I wouldn't keep too much BTC in there.

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I dont have more than 0.00000003 BTC but yeah all my wallets are safe with password

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also I printed my Litecoin address and store it where none can found it ever

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Damn, sorry to hear that. :/

I only had 0.1 BTC laying there thankfully.

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Thanks...

I sure learned my lesson, the hard way! ;)

It's bad that Steem trades only on the buggy Poloniex and on the strange Bitrix, which blocks accounts. Can not you agree with Kraken to accept coins?

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Exchanges usually decide on themselves what coins to add and it usually depends on the volume and age of coins.

Steem was recently added to upbit though which is a collaboration with Bittrex but for South Korean users and they recently listed Steem-KRW and SBD-KRW, was thinking of writing a post about it one of these days.

@acidyo I here what you are saying and yes I do not leave any amounts of any cryptos on any of the exchanges. I feel very comfortable with my STEEM in STEEM POWER here.

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It was exactly what I was going to do before I read this :)

Awesome advice and i think Its worth taking a few hours to make these precautions- it can save you a lot of nightmares and money hehe

We can never know when another exchange decides to Mt. Gox on us.

As much as many crypto fans loathe the thought of it, regulations being rolled out in always more and more countries will hopefully prevent such a train wreck from happening again.

That isn't to say that no exchange will ever go bankrupt but since crypto currencies are money, or at least consider as such by most, many regulations imposed on exchanges (and banks) come from the aspect of protecting the user/client. Obviously, this can only safeguard smaller amounts but at least there will be something for the bailiffs. Unlike with Mt. Gox where now it seems the biggest winner of the failure is... Mt. Gox.

Addendum: I thought you were going to fix your sleeping pattern?

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I have to try stay up longer today to try and fix it. :P

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Hahaha. That's my usual MO after an all-nighter. Stay up as long as possible in order not to lose a day and immediately be back in the normal rhythm rather than struggle with offsets due to being not tired.

look at my balance!
123456790-.png

if your not seeing it, i have $11
it used to be $5.13

sbd are cool!

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the only problem is
i cant withdraw cause my account is not valid
the only way is through enhanced accounts!

very thoughtful information indeed and i agree with your points leaving too much crypto coins in the hand of those exchanges is always a risk and in case of steem i think the best way to save it is just convert it to steempower in this way you have your steem under your control with all the keys and if someone have bitcoins then yes it is far better to save them in private wallets like exodus with all the keys under their belt, thanks for sharing such useful information with us, Stay awesome

One of the first things we used to learn long ago was to make sure that you held the keys to your own wallet. I don't think people today are as knowledgeable as we used to be, especially with the KYC as other nonsense happening on the exchanges.

It shocks me that so much steem is on exchanges. I feel dumb not having it in sp unless I am actively doing something with it.

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SP 😁😁😁😁😁 now you talking my language.

Thanks for the awareness. I have used bittrex once without any problems and planning to use it in future. I hope they will fix any issues at present asap.

Perfect instructions you giving @acidyo how to secure our crypto coins. I agree with your points. I think the best way our coins convert to the steem or steempower. steem always control via our private keys. It's no way to handover anothers. Exchange or convert best ways. Thank you for giving most valuable instructions to steemians.

Everyone it's all about decentralized exchanges right now and forever more. I just opened a openledger.io account and I got my private keys. Time to upgrade stemians and leave these centralized institutions in the past.

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Never share your private key! it is like sharing your home's keys

You are right, at first you have to safe your wallet.Safety first.thank you for share this post with us. your content is so nice please continue this.

Jesus. Can't imagine how it would feel to have lost 4000 BTC like that.

I've been seeing a lot of users on twitter reporting issues with Bittrex. Been making me feel quite wary of continuing to use them. Especially because I had a very strange, weird issue that lasted about 2-3 weeks involving enhanced verification not being enough and getting locked out of my account until they took care of it for me, finally.

Going to proceed with caution when using their service and probably only transfer and sell things in small amounts at a time.

Well that's why people need to stop using exchange site to their wallet and in future better option is using decentrilized exchange site

Really good advice. I just got a hardware wallet and it feels a lot more secure as a long-term investment.

I love the idea of having it as mine!

I'm having some trouble with Bittrex, this doesn't make me feel any more confident they will be resolved.

ok i underestand
This is very important of all steem user
really thnx for your advice

There a more trustworthy Excenge sites and lately they prove to be fare and safe!!!

I do not know how to comment on this post, too detailed and perfect, I can only draw the conclusion that any action based on doubt will cause many losses, as well as Crypto trading and Bitcoin investments

Thanks for information I like it

Paperwallets are my favorite

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too bad it´s very difficult to receive one in my country.

@acidyo thats a very true point, which every user should remember always. I am very fresh to this crypto scene. But I always fallow that point. When it is to late, that people will shout a lot. That should be not happened, if everyone care about that from the beginning.

One aspect is holding your private keys

But then you have to be able to treat those safely so you yourself aren't exposed to somebody stealing your coins.

Or other stories about people not having a proper backup of their seed, (or worse yet, storing that backup on the same device as their wallet) and then losing all their coins when their phone or laptop dies.

For some, it's probably safer on an exchange

hey @acidyo nice one
i hope bittrex is the cool one
i have not faced any problem in that.
i hope same in feature also

It does sounds pretty bad though and in the worst case scenario some people might loose more than anybody can guess !I do really hope some people will be helped from your post !

Omg I'm withdrawing all I'm so panicked right now thanks for warning.

I wish all those reddit discussions were happening on steem platform ...

congratulation @acidyo thanks many infromation this post.

Thanks information
Good nice

It's fun playing around with some trading on Bittrex, but not anywhere near a significant percentage of your wealth, that's just crazy!
I don't get how people can just leave retirement sized wallets in the hands of others.

What can i say the quest for unfanthomable wealth makes people never consider the risks and all.

Thank you for sharing this informative post @acidyo. It enlightens 👍😊

I have my small investment only at one place I.e. steem that also in steem power and yesterday I read a post specifying SP is best if your planning to invest on steem ☺

Thanks for the awareness. I have used bittrex once without any problems and planning to use it in future. I hope they will fix any issues at present asap.

bitcoin top level.

thanks for sharing your demandable blog best of luck...✌✌

This post was really helpful. so my question is how can one get their private keys? or a better way to store the coins?

@acidyo you said it all. I have lost countless coin to this exchange to the extent am now over wise. I trade with more caution.

I have withdrawn some of my satoshis from Bittrex and I wasn't even "enhanced verified" and it went as smooth as @beanz

So are you saying that we could/should convert and store them here at steemit? Sir @acidyo

Hmmmn

It is a tragedy that people have forgotten the first purpose of crypto is to decentralise. So, why on Earth do they then flock to centralised exchanges? Profit over good sense.

I haven't kept crypto on any exchange since the Poloniex issues. I started hearing about the Brittrex issues in the past week from various Youtube channels. I warned a friend who had coin... and then yesterday... his account needs extra verification. He's provided it, but like everyone else, waiting, waiting, waiting.

I use BlockTrades and then ShapeShift from my wallet and some times decentralised exchanges such as BitShares.

I am so looking forward to atomic swaps.

Most of the newbies in this crypto world become wise only after they get a jolt or two from these deceptive exchanges.

I am a newbie to crypto and have been trying to withdraw my small quantities of btc from Bitshares account since last few days but in vain. The support team has no answer to my repeated tickets. Can someone please suggest ways to sort out the issue.

Congratulations @acidyo!
Your post was mentioned in the hit parade in the following category:

  • Comments - Ranked 6 with 97 comments

Still can't bring myself to create a local wallet, and I think this will not happen until I lose something... stupid lazy brain.

there are risk taker out there who care less of the possible effect of those hackers. Your posts will help them understand these... hope they read this too.

This post was very informative thank you for sharing
you have my upvote
@mannyfig1956

I am new user for steemit.So,I don't know. How to exchange my dollar from steemit with blocktrades? plz help me.

Safety first work last.......are you agre with me?

every coin needs a safety wallet where you mining the coin.Now I take my wallet safey.thanks for your great content post. I learn more about wallet safety

please give me suggestion which is better from both blocktrades or bittrex.

I would also add that you should choose exchanges that do not use USDT (Tether) for trading but instead backup your funds with real currency. According to current reports Tether is considered to be high risk crypto, because nobody did an audit on their funds and they are adding millions upon millions of USDT each month. Also their policy states, that they are not obliged to exchange their tokens to USD.

Very Good Posting Thesks

Great post. Thanks for the explanation!!! By the way the gif at the end of the post kills.

thats why i never keep much cash in the exchanges!

People only learn the hard way.

nice and good info @acidyo You are a good source of knowledge for newbie like @kamchore keep sharing. Resteem & Upvoted

muzakirpb upvote, posting is perfect

We can never know when another exchange decides to Mt. Gox on us.

Great post @acidyo!

So, I guess the bottom line is to be sure to have the private keys.

I’m a little disappointed to learn about Bittrex.

Thanks for sharing.

Peace.

plz my all friends,, fallowe me

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Please don't SPAM... take a look in this before hurting your reputation.

https://steemit.com/steemit/@miti/newcomers-minnows-and-spammers-this-post-will-save-your-reputation