Where are my funds stored?
Bits is non-custodial, which means users maintain full ownership of their own funds. This limits exchange-side risk, so no need to worry about anyone lending your assets (or stealing them) without your consent.
What is a non-custodial CEX?
A non-custodial centralized exchange (CEX) is a type of exchange that never has custody of your assets. With a non-custodial CEX you can on-ramp (convert dollars to crypto), trade or swap digital assets, and maintain secure custody of your crypto. Think of it as an upgraded version of traditional CEXs (like FTX, Voyager, Coinbase, or Binance).
Why don't I need to remember a seed phrase?
When creating a wallet with Bits, your device automatically splits your private key into three pieces. One of those is stored on your local device, another in a secure Amazon Web Services Center with restricted access (Bits has no access), and the last piece with a trusted third-party (magic.link). This ensures that only you are able to access your funds, and they cannot be stolen by any exchange.
How secure is Bits compared to other exchanges?
Typically, exchanges protect your assets with an email, password, or 2FA authenticator. Bits protects your assets using a similarly secure combination of authenticators, including your phone number, email, and even resources like your Google Account. The primary difference, however, is with Bits only you have access to your assets, and no one can steal or lend them without your permission.
What other advantages are there in using a non-custodial CEX like Bits?
Tons! By using Bits, you are not restricted to the dozen or hundred of assets offered by popular centralized exchanges. You are able to access anything in the world of decentralized finance DeFi the second it gets published on-chain. In essence, our users have the largest feature set web3 and crypto has to offer as soon as it appears on the blockchain.
Are there any downsides to using a non-custodial CEX like Bits?
While it's fantastic no one can steal your funds, this means no one can recover your funds if you lose access to them. Since your funds are stored behind your email and/or phone number, as long as you maintain access to those you will have access to your assets.