For many business owners, their first experience with bitcoin starts at an exchange. Platforms like Coinbase make it easy to buy, just like you’d swipe a credit card or log into your online bank. But there’s a hidden risk here that every entrepreneur should understand – especially if you’re thinking about using bitcoin for your business.

I recently dug into this topic on the CCSalesPro podcast with James Shepherd and Patti Murphy – here's a quick clip:

🎭 Why Exchanges Feel Familiar – But Aren’t Banks

Exchanges act like a bridge between dollars and bitcoin. You deposit funds, see your balance, and maybe even accept customer payments through their system. It feels safe, familiar, and centralized – almost like a bank.

But here’s the catch: when your bitcoin sits on an exchange, you don’t actually own it. The exchange holds the private keys (the digital equivalent of the key to your vault). If something goes wrong – fraud, a hack, bankruptcy – you could lose access to your funds overnight.

🔑 The First Rule of Bitcoin for Business: Not Your Keys, Not Your Coins

As a small business owner, you already know how important cash flow and trust are. If your payment processor went under and held onto your funds, that would hurt your business. The same goes for bitcoin.

Over the years, some exchanges have collapsed – sometimes because of fraud, sometimes because of bad management. In those cases, customers who left their bitcoin on the exchange often lost everything.

The good news? You don’t have to take that risk.

Bitcoin is a bearer asset. Whoever controls the private keys controls the money. Imagine you’re holding a stack of cash in your register – you own it. But if you give that cash to someone else and they promise to give it back later, you’re taking on risk.

That’s exactly how bitcoin works. If the exchange controls your bitcoin, you don’t. This is why the bitcoin community repeats the mantra: not your keys, not your coins.

🧰 Why Self-Custody Matters

For business owners, the benefits of bitcoin – instant settlement, no chargebacks, global payments – only make sense if you can rely on actually controlling the funds. That’s where self-custody comes in.

• Hardware wallets let you secure bitcoin offline, the digital equivalent of a fireproof safe.

• Bitcoin-only exchanges avoid the distractions (and risks) of altcoins and speculative products.

• Proof-of-reserves exchanges provide transparency, showing they actually hold the bitcoin they claim.

• Running your own node (a bit more advanced) lets you verify payments directly, without a third party.

These tools give you control and reduce your exposure to the risks of centralization.

📋 Practical Next Steps for Business Owners

• If you’re accepting bitcoin payments: move settled funds into self-custody regularly, just like emptying the cash till and locking it in a safe.

• If you’re holding bitcoin as savings: don’t leave it sitting on an exchange. Treat it like gold or cash reserves – keep it somewhere only you control.

• If you need liquidity: use exchanges for what they’re good at – converting back to dollars when necessary – but don’t confuse them with safe, long-term storage.

🎯 The Bottom Line

Exchanges can be helpful, but they shouldn’t be treated like banks. As a business owner, protecting your hard-earned revenue means taking the extra step into self-custody.

Curious about accepting bitcoin or moving funds off an exchange? We’re here to help.