Altcoins Talks - Cryptocurrency Forum
Crypto Discussion Forum => Cryptocurrency discussions => Incentivised Posting / Shill => Topic started by: desmonddesk on February 07, 2024, 05:18:55 PM
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The sentiment in Web3 is that,if a token is listed on an exchange but the price dumps below expectations, the community or investors claim they're scammed. Let's get some education. What's really the case? who controls the price of the token on exchanges?
In fact, I read of some exchanges like Binance, Bitget and others; setting out huge funds called User's Protection Funds in other to build trust amongst users with an extra layer of protection; as it safeguards crypto assets against hacks, scams, and extreme market conditions.
I was wondering how the user's protection works in view of the many history of exchange hack attempts and security bridges. And how best an investor can protect his digital assets optimally. Please share your experiences and insight with us.
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I was wondering how the user's protection works in view of the many history of exchange hack attempts and security bridges. And how best an investor can protect his digital assets optimally. Please share your experiences and insight with us.
I adhere to the golden rule "not your keys, not your coins", which means that I do not store coins where it really does not make sense, namely centralized crypto exchanges. The best way of safe storage is in what we call "cold wallets", which means that such a wallet has no direct connection to the internet, and we can make such a wallet ourselves from an old phone or computer, and it is called an airgapped wallet.
Of course, one of the safer options is to buy a hardware wallet, which can be an excellent option for storing our private keys if we know how to use such devices correctly.
As for CEXs, all those who trade frequently have no choice but to keep part of their cryptocurrencies right there, and if a hack happens, they can only hope that the company will compensate them.
You should also always pay attention to phishing links and clipboard malware that can cause the loss of everything we keep in our hot/online wallets - and that means not clicking on suspicious links that we receive via e-mail and social networks, install an ad-blocker in your browser to block google ads and always check your coin addresses several times before making a transaction.
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~snip~
I was wondering how the user's protection works in view of the many history of exchange hack attempts and security bridges. And how best an investor can protect his digital assets optimally. Please share your experiences and insight with us.
I adhere to the golden rule "not your keys, not your coins", which means that I do not store coins where it really does not make sense, namely centralized crypto exchanges. The best way of safe storage is in what we call "cold wallets", which means that such a wallet has no direct connection to the internet, and we can make such a wallet ourselves from an old phone or computer, and it is called an airgapped wallet.
Of course, one of the safer options is to buy a hardware wallet, which can be an excellent option for storing our private keys if we know how to use such devices correctly.
As for CEXs, all those who trade frequently have no choice but to keep part of their cryptocurrencies right there, and if a hack happens, they can only hope that the company will compensate them.
You should also always pay attention to phishing links and clipboard malware that can cause the loss of everything we keep in our hot/online wallets - and that means not clicking on suspicious links that we receive via e-mail and social networks, install an ad-blocker in your browser to block google ads and always check your coin addresses several times before making a transaction.
Really full of insight and useful, I must admit. And rightly pointed out that for those of us who use centralized Exchanges, and not just that but who have not so heavy fund to invest, we can't avoid leaving funds on the exchange. Those funds are useful in making small trades swing and DCA. Not anticipating any ill occurances, but at what point does the compensation come into effect?
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Yes, I have read a snippet about binance requesting such payment from a project which wanted to be listed on their exchange. They had to pay some fund into binance management which can be used to add more fund into the project if there is any case of serious volatility that may causes the project to lose almost all liquidity. That's why this time around, I don't prefer altcoins any longer because I have read and have different kinds of experience in the crypto space. Investing in altcoins poss some risk which can lead to huge profit or huge loses, it all depends on what the investor can handle.
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best an investor can protect his digital assets optimally. Please share your experiences and insight with us.
Just like what the first poster said, you are the only person that can keep your funds safe, by keeping them yourself in a self-custody wallet. Like a cold storage and hardware wallet, where only you have the keys to your coins. Exchanges are vulnerable to attack, or they can pull an exit scam, and your funds will be lost. These are the reason why exchanges are not safe for us to keep our coins. See exchange as a marketplace, where you buy and sell, and not as a bank. If you leave your goods that you took to the market, or that you bought from the market in the marketplace and go home, thieves will come and steal them.
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best an investor can protect his digital assets optimally. Please share your experiences and insight with us.
Just like what the first poster said, you are the only person that can keep your funds safe, by keeping them yourself in a self-custody wallet. Like a cold storage and hardware wallet, where only you have the keys to your coins. Exchanges are vulnerable to attack, or they can pull an exit scam, and your funds will be lost. These are the reason why exchanges are not safe for us to keep our coins. See exchange as a marketplace, where you buy and sell, and not as a bank. If you leave your goods that you took to the market, or that you bought from the market in the marketplace and go home, thieves will come and steal them.
You're right in a way though. But some exchanges like the one OP mentioned have taken up ways to strengthen users trust in their platform via certain means like the protection funds.. if a project rugs on dex your funds is gone, but on a cex there's possibility of a refund made possible by these Safu funds OP is talking about. So CEX ain't that bad also, you just have to choose one that' takes investors funds seriously.
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Really full of insight and useful, I must admit. And rightly pointed out that for those of us who use centralized Exchanges, and not just that but who have not so heavy fund to invest, we can't avoid leaving funds on the exchange. Those funds are useful in making small trades swing and DCA. Not anticipating any ill occurances, but at what point does the compensation come into effect?
If I understand what you are asking correctly, you are interested in when the exchange would compensate those who would be victims of hacking their platform? I have to admit that in most cases it is not a simple or quick process, and one of the best examples is the hacking of the Mt.Gox Japanese exchange that was about 10 years ago and supposedly only recently clients started to get part of what they lost.
What you will hear from the majority of CEX today is that they keep the majority of funds in cold wallets, and only a small part (2-3%) in hot wallets, so accordingly, hacking on a larger scale should be avoided - but again, nothing helps if you have funds on CEX like FTX or Quadriga, where you actually lose your funds because the CEOs of those companies are spoiled and corrupt brats who don't care about anyone else but themselves.
I do not use CEX, but let's say that I have no choice, I would always choose those who have a long-standing reputation and operate in accordance with the laws, and in their business use the most modern ways of generating private keys and storing them. If you have to take a risk, then you should make an effort to thoroughly investigate who you are doing business with - I, for one, would never entrust my money to someone like Sam Bankman, which turned out to be completely correct in the end.
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best an investor can protect his digital assets optimally. Please share your experiences and insight with us.
Just like what the first poster said, you are the only person that can keep your funds safe, by keeping them yourself in a self-custody wallet. Like a cold storage and hardware wallet, where only you have the keys to your coins. Exchanges are vulnerable to attack, or they can pull an exit scam, and your funds will be lost. These are the reason why exchanges are not safe for us to keep our coins. See exchange as a marketplace, where you buy and sell, and not as a bank. If you leave your goods that you took to the market, or that you bought from the market in the marketplace and go home, thieves will come and steal them.
You're right! But we can't completely avoid leaving some funds on the exchange like your funds staked, or on copy trading account as well as involvement in other yield generating event on the exchange or can we look at leaving funds in the exchange as the store owners in the Market? Those persons who own stores and goods in the market will not necessarily go home with their goods daily. So I read that as store owners for instance some Exchanges have put in modalities to ensure we trust them as a market. Just needed to know if we have good ideas as to authenticate why we need to trust it