Bitcoin news and commentMajor exchanges are not on Bitcoin’s side. Don’t let them control your keys.

Bitcoin is empowering, but unforgiving. “Not your keys; not your coins,” is not just a saying, it’s a statement of fact. Exchanges, or any custodian that is not you, should never need to hold your keys for you.

Exchanges are not your friends. They provide a middleman service between sellers and buyers, and their incentive is to maximize earnings even when it’s not in their customers’ best interests.

In one of the first Bitcoin announcements, Satoshi explicitly positions Bitcoin as an alternative to middlemen, so it is disappointing to see so many people trust in centralized parties a decade later:

Why rely on an exchange at all, let alone trust them with completely control of your assets? You can already buy directly to your Trezor, in any way that suits you, without worrying if your exchange will be next to fall.

Over several years, Trezor and our sister company Invity have been bringing more ways to get bitcoin directly to your wallet. You can now buy peer-to-peer in Trezor Suite and connect directly with other Bitcoiners through Hodl Hodl!

For convenience, you can also DCA (dollar-cost average) from one of Invity’s Bitcoin savings plan partners, or make a one-time buy from a trusted smaller provider with a long history of satisfied customers, without ever depending on them to hold your keys.

Save Bitcoin with DCA in Trezor Suite

However you choose to stack, there’s no reason to ever need to leave your coins on an exchange again. It’s not worth the risk.

Securing your bitcoin behind a username and password is worse than just keeping your money in a bank. Bitcoin needs much stricter security, since it is a natively digital asset and not reversible. To exceed the level of security a bank provides, Bitcoin keys need to be created and stored offline, and using a hardware wallet is the easiest way to do so.

In the case of custodial exchanges, the exchange is always the one in control of the keys, and therefore the coins. No matter what legal contracts or regulation the exchange may abide by, in a time of crisis, it is them who decide what happens to your money.

Who controls your Bitcoin?

The longer your bitcoin is in their possession, the higher the chance that they will face a sudden loss of user funds, as has happened multiple times this year and repeatedly throughout Bitcoin’s history.

Leaving bitcoin on an exchange increases their power and influence. In crypto, many of the tokens that end up collapsing are under the sphere of influence of exchanges, tied to risk-hungry investment firms.

The disrepute brought to Bitcoin by association has repeatedly held back progress and threatened the Bitcoin ecosystem. By giving custody of bitcoin to a major exchange, the majority of people who believe they own bitcoin are in fact centralizing power in the hands of a few entities.

How and why to withdraw your coins from exchanges

The saying “rules, not rulers” is also often applied to Bitcoin. The golden rule is that whoever controls the keys, controls the Bitcoin. The sooner the broader community learns to take control, the sooner Bitcoin will be decoupled from the influence of playboy economics.

Bitcoin without middlemen was originally published in Trezor Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

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