Elon Musk is not endorsing any centralized cryptocurrency exchanges. Musk, who is a staunch supporter of cryptocurrency, wants crypto holders to take custody of their ‘keys’, and not rely upon cryptocurrency exchanges such as Robinhood or Binance. This became clear after a recent Twitter spat between Musk and Binance CEO Changpeng Zhao. The billionaire investor and founder of SpaceX raised concerns on behalf of Dogecoin holders regarding the recent DOGE problem at cryptocurrency exchange Binance. The issue resulted in numerous erroneous dogecoin transactions with some users reporting that their accounts were frozen.
There are two types of crypto exchanges—centralized and decentralized. They both come with their own benefits and pitfalls in terms of safety and reliability. If you are keen on using a centralized cryptocurrency exchange such as Binance, WazirX, CoinDCX, etc, you would be availing the services of a company that facilitates crypto to crypto and crypto to fiat transactions between two or more individuals. Such exchanges ask their users to submit Know-Your-Customer (KYC) documents while registering on the platform.
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It is worth noting that digital currencies such as Bitcoin, Ethereum or Dogecoin, are stored in something called a ‘wallet’, which can be accessed by using your ‘private key’—the crypto equivalent of a super-secure password— without which the crypto owner cannot access the currency. Incidentally, decentralized exchanges (DEXs) do not store the private keys of customers, making any hacking attempts ineffective. DEXs allow users to trade cryptocurrency across wallets. Transactions on DEX are executed on a blockchain, like Ethereum, Binance Smart Chain, etc, making them transparent. The safety of wallets depends on how the user manages them. So, One way to secure your cryptocurrency is to use an offline wallet instead of the online one.
