PSA and Reminder to new bitcoiners: I have always heard “bitcoins kept in an exchange are not really your coins”. I didn’t really appreciate it until trying to load my wallet for the first time from an exchange account.
I've heard other posts on /r/bitcoin regarding the dangers of leaving bitcoin in any exchange longterm, and that "bitcoins aren't really in your control unless it's in a wallet you control, verified on the blockchain". This didn't really make an impact on me until I created my first wallet (I used Breadwallet), and was excited to start loading it with my bitcoins I had sitting Bitfinex for the past 5 months.
I started with a $100 test. Nothing dramatic happened; however, I didn't fully appreciate two things until after this process:
That there is a 1-12 hour "processing" delay before your withdrawal is even submitted to the blockchain.
Your withdrawal is subject to Bitfinex verifying that they have enough coins in their hot wallet to satisfy your withdrawal request.
Neither of these are big deals, but I ended up waiting 8 hours for my withdrawal of ~$100. This experience definitely made it much clearer to me how far out of my control these bitcoins actually were. It was a little startling to realize that I controlled zero bitcoins. The possibility of a "run" on an exchange also seemed much more realistic. This isn't a dramatic revelation to many of you, but many newbies still don't appreciate controlling your own coins.
Submitted July 20, 2016 at 04:58AM by GabeNewell_
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