Exchanges are a great way to get into crypto and make it easy to swap between many different networks. They allow you to easily set buy and sell orders at specific prices which can increase your profit or your losses depending on how well your entry point (buy in price) and exit point (sell price) work out between your trading pair. You can buy/sell/trade from your private wallet using a DEX (decentralized exchange) as well.
When you trade into a digital asset that you plan to HODL (hold) for an extended time then you want to take the asset off the exchange and into your private wallet for safe keeping. The primary reason for this is because exchanges like Binance, Coinbase, and many more do not give you the private keys to your assets. This means at any time they can freeze or lock you out of your assets. There are a couple of reasons why they might do this. These exchanges are centralized exchanges and subject to regulatory compliance so if legislation is ever passed that restricts the ability for the exchange to operate your funds will become frozen. Another circumstance is in compliance to anti-money laundering an exchange may be forced to disable accounts or withdrawals for a period of time. The list goes on but if for any reason they feel you have violated any terms of service or if a hacker attacks the exchange you will be locked out of your funds. With a private wallet you can take your funds anywhere you want and even send them back to the exchange to make a trade. Some wallets like the SafePal Wallet make this very easy and convenient to interact with the Binance Exchange as well as any DEX using DAPPS in the wallet app.
Sending crypto from an exchange to your private wallet will involve a withdrawal fee from the exchange and for convenience is normally paid in the asset you are transferring. Simply select to withdraw you asset and copy and paste the address of your external wallet into the withdrawal address. *ALWAYS* make sure you have the complete address and it is correct before sending. If one digit or letter is missing or incorrect your funds will be lost and not recoverable. It is best to send a test amount (minimum allowed for withdraw) the first time to ensure your funds arrive in your wallet and everything is working. Keep in mind that exchanges tend make transfers in batches to reduce transactions costs so this may cause a slight delay in receiving your funds but you should be able to track your transaction progress in your exchange dashboard.
SAFETY & SECURITY MUSTS
- Always hand write your login info and your passphrase on paper or a ColdTi: Cryptocurrency Seed Storage and never on any digital device. These are the keys to your account. Even printing this info off can make a digital copy within your printer or network.
- Keep a copy in a fireproof safe and another copy either in a safe deposit box or another fireproof safe at a second location.
- A good secure email account is also highly recommended and protonmail.com leads the way in this industry. Also like any other service you can set up a totally FREE account to use!
- Always use a VPN
- Also, always remember to log out of your accounts after accessing them on any computer or mobile device.
- STAY AWAY FROM SCAMS! Nobody is gonna send you crypto back after you send yours period. For more info about scams and what they look like see our post here.