Moneyweb Crypto
Should you keep your crypto with your exchange?
Jul 3, 2024
Kriyan Singh, co-founder of CoinEd and project manager for distributed ledger technology at the CSIR, offers deep insights into cryptocurrency storage. He discusses the risks of keeping crypto on exchanges, using notable hacks as cautionary tales. Singh navigates the debate between self-custody and the pros and cons of various wallet types, from hot to cold. The conversation also covers the importance of managing private keys and the critical aspect of securing crypto inheritance, providing essential tips for responsible asset management.
25:10
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Quick takeaways
- Self-custody of cryptocurrency enhances security and ownership by ensuring users control their private keys instead of relying on exchanges.
- Choosing between hot and cold wallets is vital, as it significantly influences the security and convenience of managing cryptocurrency assets.
Deep dives
The Importance of Self-Custody
Self-custody of cryptocurrency is critical because it centers around the principle of ownership, summarized by the phrase 'not your keys, not your crypto.' When crypto is stored on an exchange, the exchange retains control over the private keys, leaving users exposed to risks such as hacks and theft. High-profile incidents, such as the Ronin Network hack resulting in a loss of $625 million and the famed Mt. Gox hack where 650,000 Bitcoin was stolen, highlight the potential dangers associated with exchanges. Therefore, moving cryptocurrencies to self-custody wallets is often recommended for long-term holding to enhance security and ownership.
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