Not your keys not your crypto

As long as you trade on an exchange, you are subject to its rules and conditions.

I don’t understand why people keep repeating this phrase without thinking.

Whether you withdraw your funds or not, it does not really change the situation. Yes, it is generally better to withdraw, but there is no guarantee the exchange will always let you do so.

Though I understand your reasoning, the phrase emphasises the dangers of holding money on an exchange. While withdrawal does not guarantee access will not be lost due to exchange problems or hacking, it does lessen the chance. The goal is to reduce susceptibility. However, there is never a 100% assurance, thus it is important to keep up with exchange policies.

“Not your keys, not your crypto” is a reminder that owning your private keys gives you full control over your cryptocurrency. When you leave your funds on an exchange, you’re subject to their rules and potential risks like hacks or withdrawal restrictions. It’s about security and staying true to the decentralized spirit of crypto. Holding your keys ensures you have direct ownership and can manage your assets independently.

After thoroughly researching the concept of “not your keys, not your crypto”, I understand this is an important principle in the world of cryptocurrency. Essentially, it means that if you don’t personally hold the private keys to your digital assets, you don’t truly own them. Cryptocurrencies are designed to be self-custodied, so keeping your coins on an exchange or with a third-party service means you’re trusting them to safeguard your funds. However, exchanges can be hacked, go bankrupt, or freeze withdrawals, putting your crypto at risk. The only way to have full control and ownership over your digital assets is to store them in a non-custodial wallet where you alone hold the private keys. While this requires more personal responsibility, it’s the best way to ensure your crypto is secure and accessible only to you. Following the “not your keys, not your crypto” maxim is crucial for maintaining true ownership and sovereignty over your cryptocurrency holdings.