I get it that if you want to exchange and play with the markets you need to have your crypto in a shared wallet, but why for f** shake would you put all your money there?
That’s the whole point with crypto, you don’t need a bank (exchange) to store them for you. Not your keys, not your coins :-)
Then the second wave was technical adjacent people. Most of the "investors" I knew they were less technical people but still in the startup scene. Most of them didn't really understand how cryptocurrencies worked, but weren't completely clueless. They still had to figure out how to create a wallet, acquire coins etc but could only give you a hand wavy understanding of how various currencies actually worked.
This current wave was the naive retail wave, where large masses of people who fundamentally do not understand the underlying technology started getting involved. Most of these people in earnest do not understand what a "wallet" is, have no idea how to use crypto currencies outside of a central exchange. All they know is "a lot of people seem to be making easy money off this".
This is precisely why so many of the loudest critics in this current wave where crypto enthusiasts in the first wave. It became increasingly clear to anyone with technical understanding of the topic that the only explanation for what we're seeing is a lot of the very financial corruption and scams they were hoping to fight in the first wave.
I've said this before here on HN, but I think crypto exchanges should require new customers to pass a relatively strict test about crypto, investment and trading basics before they could start operating with cryptocurrencies or other such trading products.
I think crypto exchanges are an ideal platform to do this because they're usually the onboarding ramp for most new crypto users, especially the ones losing massive amounts of money recently.
I believe this would be in the best interest of the whole crypto industry and could be a massive improvement in the reputation and usage of crypto in the long term, even if it could have some detrimental effects in the short run (due to being an entry barrier for new users).
Because it's obvious to anyone not asleep at the wheel that many new crypto users do not know what they're getting into, or rather, all the risks that they are undertaking when they get their money into crypto exchanges, cryptocurrencies and/or crypto-related... thingies.
https://twitter.com/haydenzadams/status/1592188164218707969?...
On a similar (sort of) principle, I do not keep 100% savings on the bank account to which my ATM card is attached, I have a separate account where I keep most of my savings and move money between them once a month or when i need to buy something very expensive.
For what chain? As far as I can tell, this is only true for ETH, and you can mitigate this by switching to a true L2, although not many of them are up to par yet.
Crypto is full of people looking for to get rich quick with interest rates that are obvious ponzi schemes and/or by taking on insane leverage. They don't want to just put tokens in an offline wallet and watch the market prices.
How often for stocks purchased via a broker do you go and reregister them to direct registration so the certificates are in your name?
At this point I’m beginning to think the “not your keys” group is arguing in bad faith every time an exchange fails for failing to see why a retail investor would prefer an exchange.
The issue is that exchanges are pretty much guaranteed to be frauds, by market dynamics. There are only a few routes to profit, 1) charge users or 2) use user's funds to trade, or 3) trade against the user but with more knowledge. One of those is limited to maybe $20 per year, the other two are crimes. Every single crypto exchange picked one or both of the crime strategies because it was the way to make an exchange wildly profitable.
People who did use exchanges are people who were doing things they were warned were not a good idea, and were doing it for the obviously unrealistic gains and imho would have simply mailed their money to a Ponzi scam if that was all that was available.
Everything has some weakness and crypto is like cash here - if you let someone hold onto it for even a second they can refuse to return it.
I don't think you can blame a community of honest developers who described and detailed the risks for intentionally self-deluding investors. A 100%+ yearly return is a better indicator of something wrong than of a great untapped opportunity and these investors tried betting against people who they were assured were scammers and when that failed they blame the currency. It's like trying to win a rigged game against a carnie and then blaming the bus driver who gave you a ride to the carnival.
If all you’ve done is reinvent the existing monetary system minus all regulation, oversight and value, you’ve invented absolutely nothing at all.
Except, perhaps, a novel new way to convince rubes to give you their money.
Should have been a red flag on reflection