[OPINION] Exchanges Are Not Banks
Updated: Jul 16, 2020
So Here's The Peel
not your keys = not your coins
There are a lot of names for it - the thing you use to log in to your wallet.
That's the golden ticket. If you don't own that, you don't own the coins in that address. The person/exchange that has that fancy code is the one who, at the end of the day, has control of all the money. Your coins should be stored in a wallet that you control the keys to. Those keys should never be shared publicly, and that puts you in control of your money. Cryptocurrency started as a way to give people control of their money in a decentralized way. Now people take that away by storing it with centralized third parties like exchanges. Those third party exchanges don't need to undergo the same security, background, auditing, licensing, and regulation as banks. They are not comparable.
So Here's What Really Grinds My Rind We're storing way too many coins on exchanges Let's make try to make it plain and simple so everyone at the back understands clearly:
Exchanges are hotspots for hackers (see Bitfinex, Binance, Poloniex, Mt Gox, Cryptopia, and others for examples)
Exchanges have exit scammed with user funds in the past (see Bitgrail, Quadriga and others for examples)
They rarely have insurance to pay back their users
Banano and Nano use voting weight as a part of its consensus mechanism. That voting weight it dictated based on how many coins are spoken for through the Representatives assigned to each wallet. To sum it up, giving the exchanges a bunch of coins gives them more voting weight on the network, and too much becomes a problem for decentralization.
This has been an issue within the Nano community for some time with larger exchanges like Binance and the sheer mass of coins they hold. Banano finds itself in a similar situation with its larger volume exchanges such as Mercatox. It's important people get their coins off those exchanges when they are not trading, to keep them safe and help decentralize the network.
So that's it! Exchanges ARE NOT Banks! They should not hold your coins for you. You should hold your coins in a wallet you control the seed/secret phrase to. Unless you are intending to make a trade very soon, your coins should be in your personal wallet. You can use either the Vault or Kalium Mobile App. If you have questions or are confused about how to use a wallet, leave a comment here or contact us and we will walk you through it.