If you were asked to mention five top cryptocurrency exchanges, Binance would come top three on your list. The reason for this isn’t distant. Binance as one of the leading crypto exchanges offers almost instant liquidity of assets and has a knack for user security.
However, the question of the platform standing in as a haven to hold your crypto assets won’t be answered with the equal optimistic glee. Granted that Binance allocates a majority of digital assets under its possession to a cold wallet that makes it difficult to intercept. Cryptocurrency exchanges remain a premium target for prowling hackers.
Evidence that even a security-conscious platform can’t scare hackers away is seen in the $40 million asset theft on the Binance exchange in May 2019. Hackers would employ several tactics so you can lose your digital assets to them. Some of their popular methods include the distribution of viruses, flash loan attacks, and phishing.
Essentially, a crypto exchange might not be entirely as secure as some people would presume. The Binance platform is a very reputable site for secured trading. You’d be stretching its security capabilities if you desire to employ the platform to hold your long-term crypto assets.
The Pros and Cons of Binance Wallet
As earlier mentioned, Binance is a top-tier exchange that offers a wide array of useful features to regular users. One of the most prominent advantages of using the Binance wallet is the ease of use both on the software and web-based versions. For daily crypto traders, the platform offers the needed flexibility to trade hundreds of digital assets without breaking a sweat.
Another impressive benefit of using the wallet is the provision of a Secure Asset for Users (SAFU) fund. This is a sort of insurance that stashes away 10 percent of transactions in case of a breach.
On the other hand, the paramount disadvantage of using the Binance wallet to hold digital assets is the possibility of having them drained by hackers. Binance customer care desk isn’t highly rated and breaches into your account might not be readily handled. Hence, it is advised to use the platform only to facilitate trading and pull them to a trusted wallet if you are not trading.
A Better Alternative
The complexities of handling the trading of cryptocurrencies can be overwhelming. Cybercriminals continue to devise new tricks to access crypto exchanges and make away with all they can. To combat potential breaches Binance Holdings International developed Trust Wallet in 2018 which is a decentralized wallet.
Trust Wallet offers an easy-to-navigate outlook, a multi-asset listing, and most importantly, a private and secure wallet for your digital assets. A series of words and characters called a “recovery phrase” is allocated to users to write down as a backup. If you lose your recovery phrase, you lose access to your wallet.
Aside from Trust Wallet, you can opt for a viable hardware wallet like the Ledger Nano X, Ledger Backup Pack, or theTrezor Model T.
Hackers would do anything to gain access to your digital assets; therefore the security of your cryptocurrencies should not be taken lightly.
Cryptocurrency exchange platforms are concerned with the trading and transmission of assets. They might not always be the favorite option to store your crypto assets. Special wallets specifically designed for the storage of virtual currencies are advised to be used instead.