Newbies use Decentralized exchanges (DEX) to store your coins

[Yamzakid]

I made this thread to serve as a reminder to newbies not to use centralized exchanges to store their coins because I recently conducted personal research on centralized exchanges and learned about the effects of CEX, how the government regulates it, and the danger it poses, especially to newbies.

Centralized exchange. It's just like a middleman (exchange operators) between buyers and sellers in the crypto market to help conduct their transactions, and you must trust this middleman to handle your assets because this middleman has authority over everything, including your private key, which is the scariest aspect. Because not your keys, not your coins, the centralized exchange can impose any conditions on your assets without your approval whenever they want, and they can even lend your funds to other users, exactly like in our traditional banking system.
In centralized exchanges, there is a possibility that the government would intervene and order the exchange to block their user accounts and also if the exchange goes bankrupt it can lead to frozen of the users account for sometimes. There is no privacy in CEX because of government laws over it. DEX is not governed by government or any third-party, which is why you can send money to anyone for any purpose. It provides more privacy.

I will appreciate your opinions on this, and if there is anything I'm not doing correctly, I'm willing to admit up to my errors and take the necessary corrections to improve.

[Charles-Tim]

It is worth knowing that some exchanges are centralized but not requiring KYC. Those exchanges should not be misunderstood as decentralized exchanges. Decentralized exchanges will generate you seed phrase and private keys to your wallet. It also will still give you the option to make buy and selling of your coins with bitcoin addresses that the wallet did not generate for you.

[Gurujebs]

I made this thread to serve as a reminder to newbies not to use centralized exchanges to store their coins because I recently conducted personal research on centralized exchanges and learned about the effects of CEX, how the government regulates it, and the danger it poses, especially to newbies.

Decentralized exchanges doesn't store coins neither do they help you keep your coins. What they does is they help you with intermediary to swap/exchange your coins into another without having your account verified or need any kyc documents like the way centralized exchanges does frequently when you want to make use of their exchange services.

It's the wallet that helps you manage your coins, it doesn't help you store your coins either. All coins activities happen within th exchange, any other stuffs are for assisting you communicate with coin network like send and receive transactions to a wallet with a private key.

[Yamane_Keto]

A true decentralized exchange does not ask you for your keys, you links your wallet to that exchange, so the coins do not leave your wallet until you want to exchange them, and the storage is always in your wallet. If any decentralized exchange provides a different service than that, it is not.

[Cantsay]

and the danger it poses, especially to newbies.

The danger it poses is not just for newbies - I believe that there is a need for everyone involved in crypto to know the difference and also how to keep their assets safe because what is detrimental to newbie will also be detrimental to an Og if they fail to implement the safety measures.

[Charles-Tim]

Decentralized exchanges doesn't store coins neither do they help you keep your coins. What they does is they help you with intermediary to swap/exchange your coins into another without having your account verified or need any kyc documents like the way centralized exchanges does frequently when you want to make use of their exchange services.

A true decentralized exchange does not ask you for your keys, you links your wallet to that exchange, so the coins do not leave your wallet until you want to exchange them, and the storage is always in your wallet. If any decentralized exchange provides a different service than that, it is not.

Decentralized exchange like Bsiq will give you the seed phrase and the addresses that you can use. But also giving you the option to send to your own wallet. Although, it is just like external wallet which you have full control over.

[Cantsay]

Decentralized exchanges doesn't store coins neither do they help you keep your coins. What they does is they help you with intermediary to swap/exchange your coins into another without having your account verified or need any kyc documents like the way centralized exchanges does frequently when you want to make use of their exchange services.

A true decentralized exchange does not ask you for your keys, you links your wallet to that exchange, so the coins do not leave your wallet until you want to exchange them, and the storage is always in your wallet. If any decentralized exchange provides a different service than that, it is not.

Decentralized exchange like Bsiq will give you the seed phrase and the addresses that you can use. But also giving you the option to send to your own wallet. Although, it is just like external wallet which you have full control over.

I believe what they were referring to was “DeFi” like uniswap.

[Charles-Tim]

I believe what they were referring to was “DeFi” like uniswap.

This world is full of lies. Those Web3 wallets are using centralized servers and not decentralized nodes. They are not decentralized exchanges. They are even far from being decentralized exchanges. If there is strict regulations, the government can easily force them to enforce their customers to get verified before using their swapping services.

[electronicash]

i think they already have classified different kind of DEX as well. making it confusing to new users as well.

there were dex that have been shutdown by government afaik. if the government can even force a mixer from closing down, i think they can also do it on DEX. even when there is no CEO known for some DEX, the government can attack the hosting company they are using which makes these dex seem not a real DEX after all.
 

[Wiwo]

A true decentralized exchange does not ask you for your keys, you links your wallet to that exchange, so the coins do not leave your wallet until you want to exchange them, and the storage is always in your wallet. If any decentralized exchange provides a different service than that, it is not.

Note that if you link your wallet through whatever smart contract chain, it automatically grant the back end access to view some sensitive informations such as password and wallet keys of the wallet connected, so their don't need to ask for you wallet keys, their already have access to that information, that is why some scammers make attempt for you to connect your wallet to spamming smart contract just to drained your entire holdings.

[Fivestar4everMVP]

I will appreciate your opinions on this, and if there is anything I'm not doing correctly, I'm willing to admit up to my errors and take the necessary corrections to improve.

You did well, all that you said is correct, the only area I think there is a mistake is in that subject of the thread, some one else must have pointed out this error to you, but just incase non have, then you have to know that funds can't be stored on decentralized exchanges, any decentralized exchange that allow users to store funds on the site where as users have no access to the private keys of the wallet they keep their funds in, such decentralized exchange is not really decentralized as they claim, example of such Dex that did this in the past were etherdelta, forkdelta, idex etc. Such were not really decentralized as they claimed to be.

Funds can only be stored on non-custodial wallet, this is wallets that you own it's keys, this is the safest way to store crypto.
I some time ago ago Staked $440 on bkex exchange, they claim they had issues with Chinese government, this lead to their bankruptcy and shutting down, I and every one else lost our money, this is how risky it can be to store crypto on centralized exchanges.

[Yamzakid]

Respect to you my boss's i appreciate all the responses because I find dem helpful and dis don encourage me to dey make valuable contribution here

[Sim_card]

A true decentralized exchange does not ask you for your keys, you links your wallet to that exchange, so the coins do not leave your wallet until you want to exchange them, and the storage is always in your wallet. If any decentralized exchange provides a different service than that, it is not.

Note that if you link your wallet through whatever smart contract chain, it automatically grant the back end access to view some sensitive informations such as password and wallet keys of the wallet connected, so their don't need to ask for you wallet keys, their already have access to that information, that is why some scammers make attempt for you to connect your wallet to spamming smart contract just to drained your entire holdings.

Yamane_Keto is right with what he is said because that is how I know that DEX operates, but as Charles-Tim said some DEX have their own private wallet which they give you total control of by providing you with the seed phrase and private keys so that you can send your bitcoin to that wallet address before swapping or trading it. However be it DEX or CEx, it is not good to keep your coins in them and that is why we have noncustodial private wallets that are open source to store our coins in.

[Charles-Tim]

Yamane_Keto is right with what he is said because that is how I know that DEX operates, but as Charles-Tim said some DEX have their own private wallet which they give you total control of by providing you with the seed phrase and private keys so that you can send your bitcoin to that wallet address before swapping or trading it. However be it DEX or CEx, it is not good to keep your coins in them and that is why we have noncustodial private wallets that are open source to store our coins in.

Let me make it clearer. A true decentralized exchange will not use central server but decentralized ones. It will make people to be able to send and receive the coins directly on their noncustodial wallet. Some decentralized exchanges have wallet which generates the seed phrase, the keys and the addresses. But if you do not want to use the address that the decentralized exchange generate for you, you can use noncustodial wallet. But the decentralized exchange have inbuilt noncustodial wallet. Anything other than this is a centralized exchange.

So this is not correct:

However be it DEX or CEx, it is not good to keep your coins in them and that is why we have noncustodial private wallets that are open source to store our coins in.

But this is correct:

If it is CEx, it is not good to keep your coins in them and that is why we have noncustodial private wallets that are open source to store our coins in.

There are many exchanges that are centralized but people think they are decentralized because they do not have KYC but that is wrong.

[Hatchy]

It would be better not to have your coins stored up long term on exchanges. Be it CEX Or DEX you should keep your coins off exchanges and use only standard non custodial wallets.