We all know safety is maybe the most important thing in the crypto world. You can hold $10000000000000 worth of crypto and lose it all in a split second because of a hack or losing a key or the reasons could be endless.
Holding liquid on exchanges look ok for new users as you think they are responsible for custodial funds but is it indeed a good idea?
Bittrex, Binance, Coinbase, Poloniex and GDAX are all custodial crypto exchanges, promising to hold your cryptocurrencies safely. Those of you who've been here for awhile are smiling or laughing right now, the newer users may think what a great thing, right?
For those who have registered directly to Hive and have never been on Steem, I'm going to tell you a story, which is not a made up one, unfortunately it's happened and maybe it's been the first of a kind in crypto history.
Many of us started 2020 on a blockchain called Steem and finished on Hive. Around February 2020 or so (the exact date is not important here), Ned Scott, one of the founders of Steemit.inc decided to get out and sold the company to the highest bidder. The new owner had different plans and possibly wasn't told how things work on the blockchain.
To cut the long story short, after some discussions with the consensus witnesses, they could not reach an agreement, so a war for power started. In an attempt to acquire more power, the new owner colluded with the exchanges, convincing them to power up custodial funds (Steem) to support an upcoming hardfork, also promising them the shortening of the power down period from 13 weeks to 4 weeks I think.
I'm not going to name the exchanges, but you have to know they powered up custodial funds, what was obviously not only wrong but illegal as well as those funds were not theirs to do that change to begin with . As a result, clients could not use their Steem as those were not available anymore, being powered up and locked for 13 weeks at that time. Basically those funds were held hostage.
Jumping to the present, FOMO is working, I see users trying to diversify their investment, watching charts, waiting for bull runs, then worrying about when to cash out, trying to make the most of it. It's easy to lose yourself in the rush and let your guard down, then one day it's too late, your crypto is gone because you've been careless or not careful enough.
Keeping your cryptocurrency in PayPal wallet is even worse as your account can be suspended and you are done. PayPal is known for banning users pretty easily, without any reason. Some had their businesses ruined because of PayPal.
There is the options of cold wallet, which they say it's the safest but a device can cost you from $100 to who know how much. This may be peanut for some, and a fortune to others as many only have that amount to invest, so ordering a cold wallet is not an option for them.
You can create (kind of) your own cold wallet by using a wallet app and a mobile phone.
Download a wallet app you trust, then take out the SIM card. Removing the SIM card your phone is not traceable unless someone knows your unique IMEI (International Mobile Equipment Identity).
Activate airplane mode and disable the use of mobile data by putting the device into offline mode. This way you can safely view your wallet. When you want to use the mobile wallet app, only use Wi-Fi for transactions. Most home networks are password protected, that's another safety measure for you.
This is obviously not the most comfortable method but it can work if you have a spare phone. Better than nothing.
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