Changing perspective on “not your keys, not your coins”

I’m a big believer in the “not your keys not your coins” mantra that is popular in this sub. I store almost all my crypto on a hardware wallet, and only keep a small amount on reputable exchanges.

That being said, I recently had a conversation with a friend that began to change my perspective on the matter. Essentially, his argument boils down to the following points:

The technical details of who “owns” the coins doesn’t matter as much as some people would lead you to believe. The large majority of people just want to earn money from crypto, and at the end of the day most should store them in the place where they are least likely to lose their funds. (Obviously there are exceptions to this rule, for instance if you use participate in DeFi, need your private keys to stake, etc, or actively use your crypto for purchases). You can feel superior by having your own hardware wallet, but if you were told that you were 1.5x more likely to lose your funds, would you still use one?

Now that 1.5x number is completely made up as it’s hard to quantify the exact relative risk, but you hear far more stories of people having their keys stolen or lost than of reputable exchanges being hacked (keyword being *reputable*, don’t store anything on shady/small exchanges). Do I trust myself more than a $100B tech company who’s business is dependent on not getting hacked?

Furthermore, if you lose your own keys, you’re 100% screwed. If Coinbase got hacked, they have some insurance and would likely try and refund their customers (perhaps in USD), or else they would surely go out of business. And I know some exchanges wouldn’t do this, but the major players have insurance, billions of assets under management, and deep pockets from funding as well.

Honestly, I think it was a good argument that made me start to rethink how I store my crypto. I’ll still use a hardware wallet for likely the majority of my crypto, but will consider splitting up my funds more evenly.

I fully expect this to be an unpopular opinion on this sub, but I do think the issue isn’t completely black and white. At the very least, storing some crypto on a major legit exchange is a way to hedge against my own stupidity.