Where Should You Store Your Crypto Assets?

The collapse of FTX in 2022 taught the crypto market a painful proverb: "Not your keys, not your coins".

1. Centralized Exchange (CEX)

Examples: Binance, Bybit, OKX, Coinbase. Pros:

• Highest liquidity, cheap fees.
• Easy to buy/sell via P2P (Fiat to crypto).
• Forgot your password? You can reset it via phone KYC.

Cons:

• You entrust 100% of your assets to the Exchange. If the exchange goes bankrupt or gets hacked, you lose everything.

2. Decentralized Wallet (Web3 / DEX)

Examples: Metamask, Trust Wallet, OKX Web3 Wallet. Pros:

• You are in full control of your Seed Phrase (12 security words).
• Freedom to connect to various financial DApps.

Cons:

• Great responsibility. Losing/Exposing your recovery phrase = Permanent loss of funds. There is no customer support to reverse a transaction sent to the wrong network.

3. Cold Wallet (Hardware)

Examples: Ledger Nano, Trezor.

• A USB device completely isolated from the Internet. Contains internal private keys, and transferring funds requires pressing a physical button.
• 99.99% absolute security. Best suited for long-term holding.