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

in #caution6 years ago (edited)

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.

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

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

I like the decentralized aspect.

free

Are the fees reasonable?

Peace.

Paperwallets are my favorite :)

I haven´t seen one in my life!

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

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

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

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

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.

completely agree

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

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

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?

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.

@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

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

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

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

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

Damn, sorry to hear that. :/

I only had 0.1 BTC laying there thankfully.

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?

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.

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