Should cryptocurrencies be stored on exchanges or personal wallets? According to Binance CEO and co-founder Changpeng Zhao, crypto assets should be stored on his centralized exchange. Zhao made his personal remarks while referring to a tweet by Peter Schiff, a notorious crypto skeptic, who managed to lose access to his Bitcoin wallet.
Schiff’s case of ‘old man yells at computer’ gained controversial attention from the entire Twitter community, including Changpeng Zhao who is known for his online interactions with the sector. Proposing that centralized exchanges are a far more secure option, Zhao commented:
“Many hardcore crypto [organizations] advocate storing your own keys. But the truth is, today most people are not able to secure a key even from themselves (losing it). A trusted centralized exchange is #SAFUer for most people. The numbers speak for themselves. Need to work on wallets.”
The case of conformity versus adaptability
While exchanges are far simpler to use for newcomers to the sector, the same investors who plan to invest more than thousands of dollars should learn how to manage a digital wallet rather than choose the ‘easier’ option. When compared to credit cards and bank accounts, are cryptocurrency wallets not simpler to install and handle? Decentralization is a key part after all.
After commenting, Binance CEO Changpeng Zhao was heavily criticized by some users. As a reminder, hackers manage to steal $40 million from cryptocurrency exchange Binance in 2019.
While all users received the assets, they lost thanks to Binance’s SAFU mechanism, the hackers still managed to deal a great amount of damage to the exchange’s reputation. With the hack in mind, it appears strange that Zhao would recommend centralized exchanges for the sake of security.
Vitalik Buterin expresses a different view
The co-founder and main leader of the Ethereum project, Vitalik Buterin, made his own statement regarding the problem of safeguarding crypto assets. Buterin expressed his support for a better management system in which lost assets could be retrieved with the help of a social consensus.
“Disappointed at people replying to this with ‘crypto is what it is, it’s your job to be super-careful and write down backup seeds in three places.’ We can and should create better wallet tech to make security easier.”
Is there a clear winner on this topic? Clearly not as different people advocate for different systems. However, one thing appears to be certain, cryptocurrency wallets of all kinds require a significant update.