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Binance: Bitcoin fans should stay away from crypto exchanges

In the world of cryptocurrencies, there is a phrase that has become the mantra of bitcoin fans: “Not your keys, not your coins.” This idiom is intended to warn investors against putting their money on crypto exchanges. Because if something goes wrong there, they cannot access their crypto values. And there are always problems with the platforms – like now with the world’s largest crypto exchange Binance.

Within a day, they had to stop bitcoin payouts twice. The reason: a large volume of pending transactions. In other words, the platform was simply overloaded. In the meantime, the 120 million investors can withdraw their crypto assets again. But the faux pas is embarrassing for the industry leader – and once again shows the problems of central trading platforms.

The Bitcoin payout stop was not an exception. In February, Binance temporarily stopped bank transfers in dollars, paused withdrawals from stablecoins in December and even during the crash last summer, investors were temporarily unable to access their crypto assets. Quite apart from the many differences between Binance and the regulators, true Bitcoin fans should consider storing their money with centralized crypto exchanges.

Bitcoin price (BTC) current: Binance temporarily stops bitcoin payouts – BTC starts the week with losses

Bitcoin course (BTC) current

Binance temporarily stops bitcoin payouts – BTC starts week with losses

by Soren Imöhl

The basic idea of ​​Bitcoin is to create a payment system without intermediaries such as banks. A system in which no trust is required, but which runs exclusively and forgery-proof via algorithms. But if investors now park their money at a crypto exchange, they again trust a middleman who is supposed to handle the transactions.

And then another one that is significantly more susceptible to systemic risks than established banks. This is also a problem for investors: If a crypto exchange goes bankrupt, the money is lost in case of doubt. It can be attributed to the insolvency estate of the trading platform. Last year, the case of what was once the third-largest crypto exchange FTX showed that this is not a theoretical consideration.

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In an emergency, investors pay a high price if they trust a central exchange. But there is also an alternative to Binance and Co.: private wallets, i.e. digital wallets that investors manage themselves. This can be done, for example, via wallet USB sticks such as the Ledger Nano or via so-called wallet papers. These are papers on which the additions are noted.

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Although this is more complex than custody via a crypto exchange, it is more secure. However, your own urge for order should inspire more confidence than a trading platform. If you lose access to your wallet, the deposits are lost in the worst case. After all, there is no customer service at home that can help you out of a jam.

Also read about Bitcoin:

  • Money Machine 3.0: The Sinister Rise of Binance Crypto Exchange
  • Bitcoin Halving 2024: Countdown to the next Bitcoin Halving
  • Bitcoin Mining Explained: What is Bitcoin Mining and How Much Energy Does it Really Use?

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