11-27-2020, 11:56 AM
Reminder: Crypto held on exchanges is an investment in the exchange, not the crypto
<!-- SC_OFF --><div class="md"><p>We've all seen "not your keys, not your coins" but few folks understand that as it comes to exchanges.</p> <p><strong>If you buy any coin on an exchange and hold it there, your money is invested in the exchange and represented by the value of the crypto - it is not invested in the crypto.</strong> The exchange agrees to change the value of your investment based on the market value of the crypto - but it's in their wallet, not yours.</p> <p>If the exchange goes bankrupt, gets gox'ed, etc., you have no recourse in terms of "your coin." They weren't yours, they were the exchanges, and they just showed you that invested value in them in the coin value of your choice.</p> <p>There's nothing inherently wrong with using exchanges for convenience, for earning interest, etc., as long as you understand you're invested in the exchange itself, regardless of what crypto they show you the value as in your account with them.</p> <p><strong>The only coins that are yours are the ones in your wallet - hot, cold, paper or otherwise.</strong></p> </div><!-- SC_ON --> Kind Regards R
<!-- SC_OFF --><div class="md"><p>We've all seen "not your keys, not your coins" but few folks understand that as it comes to exchanges.</p> <p><strong>If you buy any coin on an exchange and hold it there, your money is invested in the exchange and represented by the value of the crypto - it is not invested in the crypto.</strong> The exchange agrees to change the value of your investment based on the market value of the crypto - but it's in their wallet, not yours.</p> <p>If the exchange goes bankrupt, gets gox'ed, etc., you have no recourse in terms of "your coin." They weren't yours, they were the exchanges, and they just showed you that invested value in them in the coin value of your choice.</p> <p>There's nothing inherently wrong with using exchanges for convenience, for earning interest, etc., as long as you understand you're invested in the exchange itself, regardless of what crypto they show you the value as in your account with them.</p> <p><strong>The only coins that are yours are the ones in your wallet - hot, cold, paper or otherwise.</strong></p> </div><!-- SC_ON --> Kind Regards R