One of the major questions cryptocurrency investors face is how secured the various exchange websites are. Sometimes leaving purchased coins on the exchanges seem to be the best option as one is able to react to the market faster.
In most cases, the newly introduced coins have no official wallets, and even if they do, using the exchange platforms as coins storage seem quite easier as compared to the stress one will have to go through in setting up most of these wallets if they are not android supported.
Leaving coins on exchanges save investors from a double transaction fee from their wallet to the exchange platforms, and from the exchange platforms to a favorable token if their asset is not in Bitcoin or any of the most listed coins. Despite these merits, cryptocurrency exchanges stand as one of the most unsecured ways of keeping tokens.
In 2014, MT. Gox which was one of the earliest established exchange platforms filed for bankruptcy after losing 850,000 Bitcoin to hackers. The amount lost was worth $450 million in then time’s value. Bitstamp which also handled different kinds of cryptocurrency transactions lost 19,000 Bitcoin worth $5 million in then time’s value.
Not just these two, a number of exchange platforms have been shut down and a lot of cryptocurrencies have been declared lost. The fact that these platforms have been under attack lately make it uncomfortable to leave coins over there especially when they are in large quantities.
The truth is that most of the exchange platforms are not properly regulated, and their operations seem to be complicated. Some of them have no customer support, and sometimes withdrawing funds become a problem.
It is an undeniable fact that exchanges have helped bring traders together to trade their favorable tokens. However, deciding to use the exchanges as permanent or long term coin storage is not advisable.
If there is the need to store tokens for a long period, it is highly recommended that one use a supported offline wallet. Usually, the offline wallets provide users with private keys of which their assets can be kept away from third parties.
It is important to note that a wallet does not keep your fund, but just host the information that can help you extract tokens from the network.
Even if there is the need to leave funds with exchanges, a comprehensive background check should be conducted and platforms with excellent reviews should be used.
