I signed up to one of the centralized exchange of my country. It allows you to invest the money into the official wallets from the exchanges. You will notice that these exchanges get your money easily into their system. Like a flash. But try and find means to get the money out. You would come across a lot of problems.

Here are some of the problems that you would notice.

No Minimum for Input BUT High Minimum Withdrawal Value

I tried adding the BCH into one of the centralized wallet. They had no minimum value one can add. Like you can add as low as few cents. Now I wanted to take out 10 USD out of the wallet balance. But that centralized wallet restricted me and flashed the message minimum withdrawal is 50 USD. So basically I can add as much as I want but they will dictate the minimal withdrawal.

Same with NEXO and Celsius where you can add the minimum amount as you want. But they want specific value for the withdrawal. So they are basically locking you in literally everything. You may struggle a lot with the value in there. You may earn as long as the returns are promised and those returns are likely to be there. You get the idea, you are kind of on their terms here.

KYC & High Transaction Fees

I noticed that Uphold once charged me around 2 USD for sending my 15 USD funds from the wallet. So basically if this were to be my desktop wallet, it could have been few cents of the transaction fee. So you are going to be manipulated by the centralized exchanges. High transaction fees are going to be there when you are living under the terms of centralized exchanges and companies.

KYC is also mandatory in most of these exchanges. I can understand that the regulated firms want to follow some of the rules there. KYC is pain especially in Uphold, NEXO etc. Because they have weird systems where they literally just mine your data rather than they can get your data for any legal compliance. Which is hard to even argue and bother with as we don't have strong control.

Not Your Keys

I know a lot of you want control of your own private keys over the wallet. Which is reasonable. You don't get that with the centralized wallets or the systems like the NEXO and the Celsius. If those are not your keys, then it's not your wallet and not your life either. So you have to instead rely more on the desktop based wallets where your keys are in your control.

Like coinbase, binance and other exchanges kind of control your wallet. So your funds, your hard work yet you don't have the keys to your funds. So that's kind of the frustrating thing that you should consider. This one frustrates me a lot here where the keys need to be in our control. I make use of the desktop wallet for this reason alone.

Conclusion

Centralized exchanges, wallets and the interest paying companies are pain to deal with as they want your money. But they don't want you to take the money out. So be extremely careful when you are locking your funds with such type of the places.

What's your experience with the centralized exchanges?