Crypto Academy Week 2 task : - Will You Keep Your Crypto Assets in a Wallet or on an Exchange?

First, I have to thank @gbenga for the time taken to create that amazing lecture, I really enjoyed learning new things and understanding more about cryptocurrency exchanges as well as cryptocurrency market capitalization. Moving forward, I must confess that the topic of the task got me willing to participate immediately, so I will be doing justice to it very fast.

Keeping crypto assets in exchanges and in wallet has been a subject of discussion in the cryptocurrency world with so many people going with the fact that tokens should be kept in wallet, while some other people go with the school of thought of keeping tokens in exchanges is better. For me, I will be going with the motion of keeping crypto assets with exchanges over keeping crypto assets in wallets.

Keeping Crypto Asset in Exchanges

It is no doubt that crypto exchanges are very reliable institutions where buy and sell occurs and it is also true that these exchanges have a lot of fund at their disposal as well as a lot of security options put in place to keep coins safe. I will be explaining my reason for choosing exchanges over wallet below.

Liable if there is a loss or hack

I will give a very good example. If I lose my steemit account to hacker as a result of clicking a phishing link and my funds are stolen in the process, I will be responsible for the loss and my coins are gone because I keep the private key but if an exchange like Poloniex, Binance or Bittrex get their steemit account compromised, the exchange will be held responsible and since they are institution with cash for emergencies, they should be able to give back the coins to users who own the coin on their exchanges. When Binance got hacked a sum of $40M in BTC, the exchange was transparent enough and assured users that the exchange had an offline safu account worth over $2 billion which could cover for the loss.

Ability to earn passive income on exchanges

Major exchanges such as Poloniex, Binance, Huobi, Bittrex and many more now have incentives for users who stake their crypto asset on their platform thereby allowing the users to give their asset to the exchange who needs liquidity in return for rewards as passive income. This won't be possible if my coins are left in my wallet, it is almost the same thing as putting a stash of dollar in a house, it won't appreciate but when one invest this money, it begins to grow.

Ease of trading Asset why Price Moon

This is very common with coins like Bitcoin where the confirmation time increases as a result of an increase in the price. With this type of scenario, the user might not be able to move his/her coins to an exchange to trade at the time expected but if the coin is kept on an exchange, user can trade immediately to other crypto asset.

Loss of Private Key in wallet is the Loss of crypto

With a crypto wallet, when a person lose their private key, they lose their crypto as private keys can be gotten back but when cryptocurrencies are on exchanges and one losses their password, the only thing needed is to click the forget password button and one has access to their crypto assets again.

Final Thought

Keeping assets in wallets and on exchanges have both their positive side and their negative side and when weighing the two properly, I personally prefer to keep my token on reliable exchanges to keeping them in wallets.

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Image source
Image 1, Image 2

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cc: @steemcurator01, @steemcurator02, @gbenga