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Posted this last time and posting this again as a PSA: A bit of a side-note, but this needs to be said: articles like these should be a good wake-up call for c

Posted this last time and posting this again as a PSA: A bit of a side-note, but this needs to be said: articles like these should be a good wake-up call for crypto users that are still using web-based wallets (and their accompanying apps for mobile platforms) especially for storing LARGE amounts of cryptocurrency -- you're essentially trusting a third-party exchange (with many of them using opaque ToS and PP) with your private keys and as a result your funds (especially those platforms that don't use multi-sig architecture). And crypto exchanges' data breaches/hacks is getting more common by the day. [0] Even Bitcoin.org has stopped recommending web-based wallets, like they were doing just a couple of years ago. The best alternative is hardware wallets, but a good middle-ground is using self-managed, 'semi-cold' software wallets like Electrum, Armory, etc. [1][2] [0] https://selfkey.org/list-of-cryptocurrency-exchange-hacks/ https://selfkey.org/list-of-cryptocurrency-exchange-hacks/ [1] https://www.buybitcoinworldwide.com/wallets/online/ https://www.buybitcoinworldwide.com/wallets/online/ [2] https://bitcointalk.org/index.php?topic=1741339.0 https://bitcointalk.org/index.php?topic=1741339.0

sawmurai 6y ago
Yeah I lost quite some coins on bitgrail :) gone ... with the wind ...
RealityVoid 6y ago
This is a common claim in crypto circles, but my experience rings the other way. Sure, some crypto exchanges have fallen, but there have been many many people that stored their funds on their own, improperly, and lost them. I had a friend that kept the keys in plaintext in google drive and lost them. IMO, the average user has weak opsec and is safer to keep crypto on exchanges. Get a good reliable one and use 2FA and you should be fine. I did pretty much all options. Kept the cryptocurrency on paper wallets, multiple exchanges and now on a HW wallet( I use a Trezor) but I don't advise this for all.
- qertoip 6y ago
  You are 100% incorrect. Not your keys, not your coins. Any meaningful amount of Bitcoin out to be stored on a hardware wallet. If user can't be bothered to learn anything or read anything or accept months-pending Windows update, he should not touch cryptocurrency. So, for the "average user", the answer is not storing on an online exchange, but to never touch cryptocurrency in the first place.
  - Spivak 6y ago
    I really don't see why crypto will end up different than the banking sector in the long run when it comes to this. They're still my dollars even if Bank of America technically has possession of them. Nobody argues that the only safe place to keep your money is in a safe in your basement, what's up with the crypto world where the advice is reversed?
    - RealityVoid 6y ago
      IMO, this comes from the origins of bitcoin, they were used and developed by a bunch of cypherpunks and privacy enthusiasts. For them, key handing is paramount! They then created this mythos and sets of advice that were handed down. But it can be used wither way. What matters is the freedom to chose.
  - RealityVoid 6y ago
    > You are 100% incorrect. Not your keys, not your coins. Yes, I know the theory but saying this 10000x times does not change the fact that for some use cases, it might be the wrong decision. I feel the crypto community is WAY too dogmatic about this. The beauty of the way cripto is working is that it can be both ways. You can control your keys as much or as little as you want. If things were the way you say, crypto would not be what it is today. Simply wishing that things were this way or say that they're "using it wrong" feels silly to me.
  - nesky 6y ago
    Do you have any preference towards a Ledger, Trezor or other?
bombcar 6y ago
Of course managing your own wallet leads to other risks, potentially more likely ones - the cries of those who forgot passwords or lost their bitcoin drive have been heard far and wide.
- qertoip 6y ago
  Hence, all modern advice pushes towards easy hardware wallets with an UX-enforced physical paper backup.
  - noxer 6y ago
    People still enter the private key if asked nicely by scam mails. Also paper backups can be copied without any visible sign and thus are super easy to steal. There simply isn't a fool proof way yet and people who dont fully understand it are at risk of loosing everything trough simple mistakes.
SilasX 6y ago
Define "large". What's a good rule of thumb for "too much to have on an exchange" and why that figure?
- deleted 6y ago
  [deleted]
bondarchuk 6y ago
You make an argument against trusting exchanges but your proposed alternative is trusting the hardware wallet company.
- Scoundreller 6y ago
  I don’t understand how generating your own private key yourself (dice or deck or cards or whatever) never caught on. And then using only that crappy 2010 laptop with wifi card removed and superglue’d USB/Ethernet (to protect you from yourself) to sign transactions offline. Or an rPi, but who cares about power use; this sucker is going to be off 99.9% of the time.

sawmurai 6y ago

Yeah I lost quite some coins on bitgrail :) gone ... with the wind ...

RealityVoid 6y ago

This is a common claim in crypto circles, but my experience rings the other way. Sure, some crypto exchanges have fallen, but there have been many many people that stored their funds on their own, improperly, and lost them. I had a friend that kept the keys in plaintext in google drive and lost them. IMO, the average user has weak opsec and is safer to keep crypto on exchanges. Get a good reliable one and use 2FA and you should be fine. I did pretty much all options. Kept the cryptocurrency on paper wallets, multiple exchanges and now on a HW wallet( I use a Trezor) but I don't advise this for all.

qertoip 6y ago
You are 100% incorrect. Not your keys, not your coins. Any meaningful amount of Bitcoin out to be stored on a hardware wallet. If user can't be bothered to learn anything or read anything or accept months-pending Windows update, he should not touch cryptocurrency. So, for the "average user", the answer is not storing on an online exchange, but to never touch cryptocurrency in the first place.
- Spivak 6y ago
  I really don't see why crypto will end up different than the banking sector in the long run when it comes to this. They're still my dollars even if Bank of America technically has possession of them. Nobody argues that the only safe place to keep your money is in a safe in your basement, what's up with the crypto world where the advice is reversed?
  - RealityVoid 6y ago
    IMO, this comes from the origins of bitcoin, they were used and developed by a bunch of cypherpunks and privacy enthusiasts. For them, key handing is paramount! They then created this mythos and sets of advice that were handed down. But it can be used wither way. What matters is the freedom to chose.
- RealityVoid 6y ago
  > You are 100% incorrect. Not your keys, not your coins. Yes, I know the theory but saying this 10000x times does not change the fact that for some use cases, it might be the wrong decision. I feel the crypto community is WAY too dogmatic about this. The beauty of the way cripto is working is that it can be both ways. You can control your keys as much or as little as you want. If things were the way you say, crypto would not be what it is today. Simply wishing that things were this way or say that they're "using it wrong" feels silly to me.
- nesky 6y ago
  Do you have any preference towards a Ledger, Trezor or other?

bombcar 6y ago

Of course managing your own wallet leads to other risks, potentially more likely ones - the cries of those who forgot passwords or lost their bitcoin drive have been heard far and wide.

qertoip 6y ago
Hence, all modern advice pushes towards easy hardware wallets with an UX-enforced physical paper backup.
- noxer 6y ago
  People still enter the private key if asked nicely by scam mails. Also paper backups can be copied without any visible sign and thus are super easy to steal. There simply isn't a fool proof way yet and people who dont fully understand it are at risk of loosing everything trough simple mistakes.

SilasX 6y ago

Define "large". What's a good rule of thumb for "too much to have on an exchange" and why that figure?

deleted 6y ago
[deleted]

bondarchuk 6y ago

You make an argument against trusting exchanges but your proposed alternative is trusting the hardware wallet company.

Scoundreller 6y ago
I don’t understand how generating your own private key yourself (dice or deck or cards or whatever) never caught on. And then using only that crappy 2010 laptop with wifi card removed and superglue’d USB/Ethernet (to protect you from yourself) to sign transactions offline. Or an rPi, but who cares about power use; this sucker is going to be off 99.9% of the time.