If there is one major thing the recent Cryptsy issues have taught us, it is how users should never store funds on an exchange platform for too long. This is not just true for the world of Bitcoin and digital currency, but also for any financial platform in existence. The main difference is how Bitcoin stimulates users to take control of their finances by keeping funds in self-controlled wallets, whereas fiat currency does not.
Also read: Cryptsy Hit With Class Action Suit in Florida Stop Giving Up Financial Control
While there are many more lessons to be learned from the Cryptsy debacle , the first and foremost important thing comes in the form of end user responsibility. Every individual user has the power – and the obligation, in a way – to move funds out of any exchange platform in the world as soon as possible.
Unlike what consumers may assume, an exchange is in full control of one’s funds stored there and not the end user. In fact, in some cases making deposits and withdrawals requires third-party authorisation by the exchange operators to credit and release funds. Similar to how bank accounts operate, human involvement is required along the way.
This may sound quite strange, considering how the blockchain was designed to allow for completely autonomous transactions, removing any need for third-party services and companies. For some reason, a lot of Bitcoin and digital currency users store funds in exchange wallets, without giving a second thought as to who is in control of those funds at the time.
Cryptsy is another example of why Bitcoin users should steer away from trusting third-party services altogether. While it is hard to image a major exchange going bankrupt, Cryptsy is not the first one to do so over the course of […]
