- Recommends cold wallets like Trezor Safe 3 for security, expresses concern over Ledger’s centralized services shift.
- Advises against complex yield programs on exchanges, highlighting the risks and often unclear terms involved.
Mishaboar, a prominent Dogecoin community leader, recently raised concerns for cryptocurrency investors, particularly novices, warning them of the risks associated with “earn” programs and storing significant cryptocurrency amounts on exchanges.
Drawing from experiences in previous bull markets, he highlighted how the neglect of safety advice led to substantial financial losses for many, citing the failure of well-known platforms like FTX as prime examples.
Dear #Dogecoin: whatever you are holding or trading, do not keep huge amounts of any crypto into hot wallets (e.g. smartphone wallets) – or, god forbid, telegram bots and wallets.
Store crypto you do not plan to trade in cold wallets, and remember to backup your seed phrase (my…
— Mishaboar (@mishaboar) July 21, 2024
Risk of Storing Crypto on Exchanges
Mishaboar emphasized the risks of maintaining large cryptocurrency balances on exchanges, advising investors to opt for personal wallets over keeping their assets on trading platforms. He underscored the importance of controlling one’s private keys, which is not possible when coins are kept on exchanges. According to him, the principle of “Not your keys, not your coins” should guide investors’ decisions regarding where to store their cryptocurrency.
Advocating for Cold Wallets
For those trading or holding Dogecoin, Mishaboar advised against using hot wallets, like those operated on smartphones or through applications like Telegram bots. Instead, he recommended cold wallets for storing assets not needed for immediate transactions. He praised the Trezor Safe 3 model for its reliability and affordability, while expressing reservations about Ledger’s move towards more centralized services.
Self-Custody as a Safeguard
Mishaboar’s key message was the critical importance of self-custody in securing cryptocurrencies. Managing one’s assets independently involves responsibilities such as backing up seed phrases and ensuring they are stored offline. Although self-custody may seem less convenient than using an exchange’s wallet services, it drastically lowers the risk of asset loss due to hacks or exchange failures.
Caution Against Yield Programs
Additionally, Mishaboar cautioned against participating in exchange yield programs that offer high returns. He highlighted that such programs often carry complex terms and conditions that many investors may not fully understand, thus introducing significant risks.
These yield programs, while attractive for their high potential returns, often do not clearly disclose the associated risks, potentially leading to unexpected losses.
Overall, Mishaboar’s advice to the Dogecoin and broader crypto community is to prioritize security and personal control over their digital assets, especially during the uncertain conditions of a bull market.
