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Safeguarding funds + Account management 101.
Many of you are wondering if your funds on exchanges are safe ( #SAFU anyone?). Here are some bullets for you, and how I manage my own funds.
I'll do more of these in the future :) Enjoy!
Time for a short thread!
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#btc
#eth
Many of you are wondering if your funds on exchanges are safe ( #SAFU anyone?). Here are some bullets for you, and how I manage my own funds.
I'll do more of these in the future :) Enjoy!
Time for a short thread!
[1]
#btc
#eth
Exchanges act like banks with the ability to buy and sell tokens and coins. The simplest example you could think of is you can go to your local bank, and exchanging $USD for your local currency. Now, what happens if the bank is on hold? (Vacation or completely shut down?
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You end up waiting until the issue is resolved. Banks have reserves in order to cover their client's funds. Insurance funds that exchanges operate are more or less the same.
But you wouldn't trust the fund to be able to cover everyone now, would you?
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But you wouldn't trust the fund to be able to cover everyone now, would you?
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Welcoming cold storage. What is cold storage? Cold storage is a hardware (there's also the paper version) wallet that you own and is inaccessible by exchanges.
No one can access it but you, think of it as your physical wallet that you hold cash in.
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No one can access it but you, think of it as your physical wallet that you hold cash in.
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@Ledger is one example of cold storage, @TrustWalletApp is considered a hot wallet (they operate online).
The way it goes is that you transfer the amount of your portfolio there that you do not want to trade.
What's the best way to maximize your fund's security?
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The way it goes is that you transfer the amount of your portfolio there that you do not want to trade.
What's the best way to maximize your fund's security?
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Well, for starters, no one should go "all in" on a trade. You always need to keep liquidity on the side and avoid heavy losses if a trade goes south. You also want to avoid any shenanigan that might happen to your favorite exchange, and you caught in the middle.
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Do some research online, purchase a hardware wallet, I personally use @ledger Nano X, I've heard of other good alternatives. It's a matter of choice.
While I do not recall the names, a quick google search should do the trick
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While I do not recall the names, a quick google search should do the trick
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First thing you need to do after you get it is transferring the amount you're absolutely not okay to lose (mine hovers around 80% of my entire portfolio, hence I trade with 20% of my funds only).
You own the keys, no one can take them from you.
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You own the keys, no one can take them from you.
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The better question is, how do you consistently manage your funds? Well, if you had a successful trade, then you would transfer a part of your profits to the wallet. I usually transfer 50% of the total profit on a weekly basis and increase my trading account with the rest
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So let's say your entire fund is 5000$. You would transfer 4000$ to your wallet, and trade with 1000$.
If you made 500$ on a trade with the 1000$, you would then transfer 250$ and trade now with 1250$.
Easier and safer than most think.
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If you made 500$ on a trade with the 1000$, you would then transfer 250$ and trade now with 1250$.
Easier and safer than most think.
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No one is responsible for your own funds but you. Trusting exchanges isn't the smart move, otherwise, why are you on board with this entire decentralized finance train? Might as well stick to your local bank.
Hope you enjoyed this thread! Until next time :)
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Hope you enjoyed this thread! Until next time :)
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