- After the KuCoin exchange was hacked, people are paying attention to Proof of Keys
- When an exchange gets hacked, all funds on there are at risk
- If you use a non-custodial exchange, your funds are never at risk
Cryptocurrency exchanges have been the victims of hacks and attacks since the crypto world really came into the mainstream media. Millions of people around the globe use these exchanges on a daily basis, but many are still blissfully unaware of the risks associated with exchanges.
Any funds you have stored on a crypto exchange have the potential to be stolen by hackers, despite it being “your” wallet. The recent KuCoin hack highlights this frightening scenario where you could lose all your money if you don’t hold the private keys.
Not Your Keys. Not Your Crypto
Proof of Keys is a movement that really gained a lot of traction last year, but still, many people opt to leave their cryptocurrencies on an exchange where they do not hold the private keys, meaning anyone can run off with your crypto.
The difference between an exchange wallet and your own private wallet is the fact that you own the keys to one and not the other. If you have the keys, it’s very, very hard for you to get hacked and your crypto to get stolen.
So, a lot of people, including myself, love to say, if you don’t own the keys, you don’t own the crypto. There are still people that can take away your crypto in the blink of an eye.
If the wallet you’re using has this potential, then your crypto is about as safe as leaving it on a Post-It note on the subway.
So, do yourself a favor, if you’re not actively trading, move your crypto over to a hardware wallet like a Ledger Nano device or a Trezor – they cost less than $100!
Alternatively, Stop Using CEXs….
If you just want to cut this risk out of your life completely, then perhaps it’s time to start moving away from centralized exchanges (CEXs). If you do this then you end up in the non-custodial exchange world, and these are really cool pieces of kit.
To use them, you simply say how much of a certain coin or token you wish to buy, which coin or token you wish to sell and it will generate an address, as well as asking for your address to receive the coins or tokens.
Once it receives your coins or tokens, it will then fire out the coins or tokens you bought and that’s the trade completed.
This is revolutionary in the sense that the exchange doesn’t hold any funds, it simply matches buyers with sellers from a number of different liquidity pools.
They’re quick, easy and safe to use. Not to mention that the gas fees of using these non-custodial exchanges is much less than using a major exchange as you have less transaction numbers to make.
Try a Non-Custodial Exchange
So, why not try out the world of non-custodial exchanges. You always remain in control of your coins or tokens and the keys associated with them.
This gives you next level security and peace of mind while you sleep. There are loads out there to pick from, but my personal favorite is changeangel due to the fact that they give a portion of the fees back to the coins involved in the swap.
Whichever you pick to try out, you’ll be pretty surprised about how smooth the process really is!