Like if Zerodha goes bankrupt and closed, I am still able to get my stocks from CDSL but What if any indian cryto exchange went bankrupt and closed? How am I going to recover my crytos?
If you move the crypto to your own wallet, then you have nothing to worry about. As long as your crypto is left on the exchangeās wallet, its not really yours.
Can you elaborate more on āown walletā? Is it going to be a physical storage e.g. hdd, pen drive etc.
Better known as cold wallets, they are hard drive/etc where one can store crypto and keep it off line. This is least vulnerable to the stealing/hacking.
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move them to hardware wallet. Never keep crypto on exchange or any other kind of wallet.
Also understand the cryptos are stored on the network , not on the exchange.
see thatās the catch here, if Iām storing my cryto in a hardware wallet then how Iām going to take advantage of sudden volatility in the cryto market
- first of all, Iāll not be able to trade frequently
- and what if my hardware wallet stopped working or gets locked e.g. forgot password
- also what about physical damage to hardware wallet e.g. fire, water etc.
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1.For trading you donāt need a hardware wallet. HW is for investing. For trading purpose , exchange wallet is fine. Just make sure you have 2FA enabled.
2. hardware wallet can be lost or destroyed , you can still access your crypto using recovery phrase.
3. HW is needed only for making the trasactions. It does not store your crypto.
Recovery phrase is all you need to recover access to your crypto assets.
I suggest you read up on how HW works. Plenty of videos/tutorial/articles.
okay I got it. You need a seed phrase which will generate a private key which then generate a public key and finally your public address will be generated. The cryto is on the network. Your cryto is the one signed by you and broadcasted to the network.
so your cold wallet contains all the private keys you used to trade crytos because private keys are unique right?
yes cold wallet contains your private keys which is required to make the transactions.
I wish even the stock markets worked something like this. Then broker cannot mess with your account.
Hopefully one day blockchain technology comes to stock market.
I donāt understand. How brokers can mess with my account? Also, I feel more comfortable in knowing that my stocks are safe at CDSL and even if zerodha closes Iād still able to get my stocks from cdsl which brings āpeace of mindā to me but the same is not applicable to cryto exchanges.
This brings me back to square one
- How to save my seed phrase? memorize it? what if I forgot?
- store it in a hardware? same hardware issue again
- store it on some cloud provider?
Also, how this distributed ledger consensus work? What if some nodes are offline? What about 51% attack?
IMO this tech is not yet at a maturity level to be mainstream. But Iām optimistic about it(still not putting my hard earned money into crytos because they have no intrinsic value)
Then why bother worrying about crypto.
I donāt think you are comfortable with this technology. Plenty of action in stock and commodities.
btw , you store your seed phrase in a steel crypto container. something like this
Regarding how blockchain works and 51% attack, plenty/tons of videos on youtube.
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