The Coinportal.space web portal decided to figure out how to choose a cryptocurrency exchange without risk to their assets, as well as find out what crypto insurance funds are.
We have invited one of the leading traders and analysts in the cryptocurrency market for a dialogue.
Goldbug1 channel on the www.tradingview.com web portal has more than 35,000 traders-subscribers, and its forecasts are considered one of the most accurate in the cryptocurrency market.
Security of the exchange from hacking.
According to CIPHER TRADE, more than $ 1.5 billion was stolen from crypto exchanges in 2017-2018.
If we talk about the reliability of the exchange from hacking, then not always large exchanges are 100% protected. It seems that the old stock markets-dinosaurs are more resistant to hacking, but let’s see what history teaches us.
Bitfinex, Polonex, Bitstamp and even, it would seem, the exchange with the coolest protection – Binance – was also hacked in 2018.
The real solution here could be insurance, although de facto this issue has been hanging in the air for a long time. Moreover, in one way or another, exchanges have to recover from hacking.
Let’s take the same Bitfinex after the hack, which needed to restore assets. They had to issue their own token and perform all the necessary manipulations to bring it to the exchange and cover users’ losses with it.
But this process took almost a year! Imagine what would happen if the token was issued beforehand? I think many traders would save a lot of nerves by getting a refund, let’s say, within a month.
At the same time, it should be understood that the insurance fund should not be commensurate with the full trading turnover of the exchange, because, as a rule, only 2-10% of the exchange’s assets are “on the exchange”, the rest is stored in the exchange’s cold wallets and there is no access for fraudsters.
Summing up, I can say that now more or less real security of the exchange is provided by the following indicators:
– Having your own exchange asset token;
– Availability of an insurance fund.
If we give examples of exchanges, perhaps we offhand can name the following:
COINBASE, which have both an insurance fund and their own asset (but the problem here is in the user’s country: you may be denied a refund if your country is not in the list of acceptable countries);
BINANCE, which has an insurance fund, but it is created to cover losses of the exchange, not users, when the value of client accounts falls below zero.
But this exchange has its own BNB token, which is today one of the most profitable and liquid assets among the tokens of crypto exchanges.
Another issue is that they have no obligation to cover the users’ losses in case of hacking, although I think, they will cover all the losses without any problems, but they still do not have such a responsibility.
From small exchanges, I would single out BETCONIX – the exchange has both an insurance fund and its own token. I am impressed with this exchange’s attitude to customers.
Not so long ago, this exchange changed owners, in addition to the standard actions of updating the exchange itself, updating the functionality and other things.
They started doing something that is very rarely seen in the crypto market – they began to solve users’ problems with the previous management!
I personally know several traders who were reimbursed for the asset and presented with a bonus from the exchange. Moreover, many of them decided to continue working with the exchange.
I can’t predict what will be the future of this exchange, but they enter the market with respect for their clients and traders.
As a trader, I can say that we always pay in the same coin: if the BETCONIX team continues as it started, I think we will see it on a par with the” dinosaurs ” of the market very soon.
Everyone should decide for themselves, but I would try to choose exchanges with an insurance fund and their own token.
Among other things, of course, look for additional bonuses, reduced commissions, additional earning tools, and other opportunities.
Good luck and profit to you!