Finally I pulled it out!
From now on I will be taking matters into my own hands - and I am starting to take care of my BCH right now!
Therefore: No more CEX for me!
Wait... What?!
Alright, so here is the backstory:
I had my BCH (Bitcoin Cash) at a CEX (centralized exchange) and I finally pulled it out from there.
Now I'm taking care of my own BCH myself - with a non-custodial wallet. This is a wallet to which only I know the seed phrase. Nobody else can gain access to this wallet - unless I tell them my seed phrase which - of course - I won't be doing.
Safe CEX is a myth!
In contrast to non-custodial wallets - where you are in control of your own crypto - there are custodial wallets - such as the aforementioned centralized exchanges. When you store your crypto in a custodial wallet, it is not really your crypto anymore. You hand it over to the service provider and you trust hope that they will take good care of it and hand it back to you when you nicely ask them to.
Let me point out that THAT is the opposite of why crypto currencies were invented.
Crypto enables the common person to take care of their own financial assets. It was designed to get rid off banks and middlemen. It was designed to eliminate counterparty risks.
In order to achieve these goals, however, you need to store your crypto in a non-custodial wallet - instead of handing it over to a centralized exchange or sending it to a custodial wallet.
What is counterparty risk?
When you hold your crypto in a non-custodial wallet, it is like holding cash in your physical wallet.
If the cash is in your physical wallet, only you can spend your money - as long as nobody else gets access to your wallet. Therefore, it is your responsibility to keep your wallet safe.
Counterparty risk is like handing your physical wallet to someone else. That person may promise you to keep your money safe for you. They may even promise that they pay you some interest on your money. However, ultimately, they can do with your money whatever they want. If they lose it, because they do something stupid with it - or because someone else steals it, then your money is gone. And if they declare bankruptcy afterwards, you won't get anything back - even if you sue them.
Therefore, you may still think of that money as your money after you hand it over to someone else - when in fact it is not yours anymore...
It is the exact same with sending crypto to a centralized exchange or to a custodial wallet. They may tell you that it's your money when in fact, they control it. And they allow you to look at a representation of your crypto. They may allow you to trade it or to stake it. They may also allow you to withdraw it. But who guarantees that you will actually receive it when you ask for it back?
The answer is: Nobody...
If the service provider gets hacked or loses your money in some other way, if they get into trouble with a government, they may not give you the crypto back when you ask for it. And if they declare bankruptcy, you can sue them and you may not receive anything.
In case you think that such a scenario is highly unlikely, I have to disappoint you. This happened quite often in the past. It also happened to me. I lost some crypto when Cred declared bankruptcy. Actually, they knew that they were already bankrupt when they accepted my crypto - and they took it anyways...
I definitely learnt my lesson and say:Never again!
Let's celebrate taking matters into our own hands with #nofap
To celebrate today when I FINALLY said no the CEX for good, I created the hashtag #nofap - which, of course, stands for 'say "NO" to Financially Adversarial Products'. 😏😉
I hope you will follow my example and you will end the abusive relationship with your middleman, too.
But what about the APY?
There is no interest to be earned on non-custodial wallets. That's true.
However, on the other hand the risk of someone else doing something they shouldn't do with your assets is zero.
Let me state this differently: If you have your crypto sitting in a custodial wallet, you are taking a significant counterpart risk - which could lead to you losing all your assets.
You got to ask yourself the question "how much APY is worth the risk of losing it all?"
Crypto currencies are the most profitable asset class in the history of mankind. Do you really need to earn a couple of percentage points more and risk losing it all by trying to do that?
It's like picking up pennies in front of freight trains. And the freight train may run you over at any moment.
You will look very silly if that happens - and you will miss out on the gains of a lifetime because of trying to make a few extra percent...
That's why I say no - and "no" means "no".
What will you do? Will you say "me too"?
Pics - or it didn't happen
Here is the proof. I also wrote about it on noise.cash.
PS
Yes, I'm 14 years old - at heart. 😅 Therefore, I hope you enjoy innuendos, too. Otherwise, this article probably left you feeling quite unsatisfied. 😅🙈
Cex?
I'll need a condom, certainly.
You don't test the dept of water with your two feet.
That's what's like to hand your balls to those milkmen.