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One of the major advantages bitcoin has is that it is decentralized. Placing your money in a bitcoin bank is simply unneeded. Sure, keeping your BTC in an exch
by owenmarshall 15y ago
One of the major advantages bitcoin has is that it is decentralized. Placing your money in a bitcoin bank is simply unneeded.
Sure, keeping your BTC in an exchange's account may make it faster to exchange your BTC to USD, and you may see less transaction fees, but at the end of the day it means you have to trust the exchange to do the right thing.
Want to keep your coins safe? Secure your wallet.dat.
- SkyMarshal 15y agoPretty sure that if you want to trade BTC on an exchange, there's no other way but to deposit your currency in their wallet. Otherwise, how can the exchange ensure your counterparty that they'll get your money if your bids are matched? Same with real money exchanges, you have to deposit your money into their account before you can trade.
- owenmarshall 15y agoYou are absolutely correct. But that doesn't really change anything. Placing your BTC in an exchange's wallet means you are trusting that exchange. I don't really trust exchanges -- I still use them, but I never transfer extra BTC in, and I always transfer 100% of the BTC I buy into my wallet. After the Mt. Gox hack, it came out that many people were buying BTC and leaving it in Mt. Gox' wallet. That's a colossal mistake; there is simply no reason to trust anyone else to hold your BTC. Bitcoin exchanges will always exist and need to be secured. Bitcoin banks serve no purpose and should never exist.
- SkyMarshal 15y agoAh yes, completely agree there.
- Astrohacker 15y agoExactly. Don't give someone 24/7 access to your bitcoins unless you are gaining enough from the situation to offset the enormous risk that your trust will be violated.