THE DANGERS OF BITCOIN EXCHANGES AND BITCOIN BANKS

NEW YORK (InsideBitcoins) – When most people first enter the Bitcoin ecosystem, they are usually looking forward to the idea of being their own bank and not having to worry about bank fees and payment censorship.
While this emphasis on decentralization is definitely found in the base Bitcoin protocol, many who are trading or storing bitcoins on an exchange or online wallet are not actually gaining much from the Bitcoin protocol. In fact, they are using their bitcoins in the same way that they currently use their dollars, euros, or other forms of fiat currency.
Who holds the private keys?
When it comes to ownership of bitcoins, private keys are the most important part of the game. Whoever holds the private keys attached to a certain number of bitcoins is the one who actually has control over where those bitcoins will end up in the future.