Should I Store my Coins on a Cryptocurrency Exchange?

It can be intimidating to find wallets for every cryptocurrency. Sure, Bitcoin has a large range of wallets available on all platforms but not every cryptocurrency enjoys this privilege. Many cryptocurrencies don’t have mobile wallets available.

One example is Ripple(XRP). Users have 2 options to store their coins apart from exchanges.

  1. Use an online wallet like Gatehub.net or CoinPayments.net.
  2. Download the desktop wallet to store the coins.

Now there is a problem here for beginners.

Most don’t know about option 1, even if they do, it can be a problem getting verified from services like Gatehub.

Why do I say so? Because that’s what happened to me. I wasn’t able to receive a verification on Gatehub and would not have found CoinPayments if it wasn’t my thirst for finding something trustworthy.

In option 2, it’s too much of a risk or hard work because your coins are stored in a desktop wallet and will only be as secure as your computer. In this scenario, users tend to store their coins from the exchange they bought it such as Poloniex, Bittrex, Kraken or Bitstamp.

But should you really adopt this practice? The answer is no. But why? Let’s find out.

We have compiled a list of the most notable hacks on Cryptocurrency exchanges for you.

This post goes into detail about how Bithumb, South Korea’s largest cryptocurrency exchange was recently hacked resulting in millions worth of Bitcoins being lost alongside personal information of users.

The first ever significant hack to ever happen was on the Mt.Gox Cryptocurrency Exchange which also left the price of Bitcoin draining for quite a long time as people lost trust after such a huge amount of their saving was just lost.

Wired does an excellent job here explaining the mismanagement and turmoil that went behind Mt.Gox leading to the world’s largest Bitcoin exchange being hacked twice and eventually filing for bankruptcy in February 2014.

Back in August 2016, Bitfinex, one of the largest Bitcoin exchanges was also hacked resulting in Coins worth $60 Million being stolen. Business Insider sheds some light on this massive attack.

Bitstamp, also one of the major Bitcoin exchanges, was hacked in the beginning of 2015 on 4th January leading to a temporary suspension till the 9th of January. Tech Crunch gives a detailed overview of how many coins were compromised, the details released by the company, official statements and how Bitstamp came back online with improved security.

All these hacks should teach us at least one thing, we should not store our coins on exchanges simply because they are really vulnerable and susceptible to hacks.

So the million dollar question is, where should you store your coins?

Well, for Bitcoins their exist, numerous trusted solutions such as Airbitz,Breadwallet and other mobile wallets but you’ll eventually run into the issue of where to store other coins that do not have such a wide range of options.

I’d recommend you to use a solution like CoinPayments, it has a trusted team behind it and vendors like Yahoo & CoinDesk from more than 182 countries have been using it. There are plenty of others available as well but you should spend ample amount of time doing your research to find a trustworthy solution and please once again, stay away from exchanges.

About the Author:

Sudais Asif is a Level 2 Seller on Fiverr offering WordPress based services, trading cryptocurrencies and is also translating WordPress into Urdu. Throughout his freelancing journey, he has gained valuable experiences which he likes to share with others.