#selfcustody Why Elbaite supports the movement behind the trend.

Elbaite responds to the Twitter trend that’s encouraging people to #selfcustody their crypto assets.

There is a current Twitter trend encouraging people to #selfcustody their crypto assets. Today we are discussing how this trend came about, the risks associated with leaving crypto in an exchange and what you can do to keep your crypto safe.

Crypto was originally designed to be censorship-resistant and give people control over their financial assets without reliance on third party organisations like banks or governments.

Recently, Twitter users have been discussing an SEC (Securities and Exchange Commission) disclosure made by a major International cryptocurrency exchange, which outlined that exchange users may lose their crypto if the exchange were to go bankrupt.

“ in the case of bankruptcy, crypto-assets held in custody on behalf of its customers may be “subject to bankruptcy proceedings” and that customers may become “unsecured creditors” in the process.” “

https://cointelegraph.com/news/coinbase-chief-legal-officer-responds-to-sec-disclosure-fud

Another contributor to the trend was an incident earlier in the year, where the Canadian government froze the bank accounts of protesting truck drivers. When supporters started sending them crypto, the government got wind and their crypto accounts were frozen.

If the whole point of cryptocurrency is to give individuals complete control over their financial assets, how was this able to happen?

It’s all about Custody. Ever heard the phrase “not your keys, not your crypto”? Whoever has custody of the private keys has control over the wallet. Many centralised exchanges have custodial wallets built into their software, where the private keys are held by the exchange. This means that the exchange has control over what happens to that crypto. 

If you want complete control of your crypto without relying on a third party, consider using a non-custodial exchange. For more information on the different types of crypto wallets, and to decide which one is best suited to your needs check out our previous blog article

What about the exchange? Essentially there are three main types of crypto exchange: Centralised, Decentralsied and Peer-to-peer:

Centralised

Centralised exchanges are the most common type, where a third party is used to hold, monitor and secure all crypto transactions, similar to a bank. This means the control over the crypto held in that account does not truly lie with the user. The issue of security in centralised exchanges isn’t a new one. There have been many widely documented security breaches of centralised crypto exchanges, the largest of which was the 2014 Mt Gox exchange hack where between 650,000 to 850,000 bitcoin (an amount, now worth 27 – 35 Billion AUD) was stolen by hackers between 2011-2014.

Decentralised (DEX)

Decentralised exchanges or DEX’s are built purely on the blockchain. They can be accessed globally and do not operate within a single company. The downsides are that they can be complex to use, have no recovery ability for lost, stolen or misplaced funds and limited transaction speeds. They are also completely unregulated. 

Peer to Peer (P2p)

Peer to peer exchanges operate in a similar fashion to platforms like eBay or Uber, where they connect people wanting a service/product with those selling that service/product. Elbaite is a non-custodial Peer to Peer Exchange, when you make a transaction the crypto goes straight from the wallet of the seller to the wallet of the buyer. Elbaite does not hold crypto at any point in the transaction process, meaning that in the event of an exchange hack or bankruptcy your crypto will remain with you. 

There are many different options when it comes to trading crypto. The type of exchange you use, and whether you decide to use a custodial or non-custodial wallet completely depends on your circumstances and needs. The purpose of this article is to explain the current twitter trend urging people to #selfcustody their crypto and educate users about different wallet and exchange types available. 

Elbaite is the cryptocurrency exchange that allows you to Buy & Sell crypto directly from your Crypto Walle. Make an account today to start your crypto investment journey!

Disclaimer: The information on this website is purely for information. Elbaite is not a financial adviser, and nothing stated here is to be taken as financial advice. You should seek independent legal, financial, taxation or other advice relevant to your financial situation before making any investment decisions.

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