Why you shouldn't solo mine to an exchange wallet

I've chatted with a few folks about this, and I'm kind of unsure if I went over all the potential risks involved, so I thought I'd bring it up here. I really think that if you're solo mining, you should definitely be sending those coins to your own wallet. That way, you have complete control over your funds. Now, I’m curious about the tech side of things. Do exchange wallets work differently compared to using something like Electrum to get your mined coins? Is there any tech-related reason that makes this a bad idea, or is it just about not having full control over the keys for that address? Also, could the initial transaction mess up somehow if you're using an exchange wallet? Or should it function just like any other wallet?

I'm in agreement here. Exchanges should never be used as a medium to store bitcoins. You can buy and sell through them, if you do not mind sharing your personal details, but if you're holding for the long term, get a non custodial wallet. Not in any way I can think of, newly minted coins function as coins which have already been involved in multiple transactions, except in some scenarios their value could be higher by virtue of the fact they are newly mined. Exchange wallets are just wallets controlled by a central authority (for centralized exchanges). • I can't think of any others, besides risk of hacks, data leaks and sales of details to the government. • It should work exactly the same in my opinion.

Well hitting a block is a $185,000 - $200,000 event. I would say only 2 or 3 exchanges are safe enough to hold this for you. Next use a trezor or what ever say a core wallet. Generate a virgin address. It the coins hit no one know your business. This is bigly huge vast edge.

If it solo mine with a USB stick miner exchange address is not advisable since you don't have full control of your keys and exchanges are regulated then if you are lucky to mine a block with 6.25BTC and received it on exchanges there is a big possibility that your account/wallet will be monitor and possible withdrawal locked. That is why people always recommend you to use a non-custodial wallet and remember "Not your keys, Not your coins". However, if you are mining and making a profit daily GPU or ASIC receiving it directly to your exchange is fine I have a Viabtc account and receive it there and transfer it to Coinex exchange and Binance when withdrawing since I don't have free electricity I need them to withdraw and pay for monthly expenses.

That's a very interesting point that I didn't consider, and it makes sense. Finding a block through "lottery mining" is by definition an extremely unusual event, so an exchange might flag this transaction. They could potentially lock your account and ask questions later. Even though you're not doing anything wrong, you might potentially lose access to your mined coins.

Exactly. Even more, since they were not sent from a wallet of yours, you cannot prove it's your money. If they're stealing your money you cannot prove they did (i.e. it was ever your money)

I know in the past many exchanges had specifically said NOT to mine to your addresses there. If it was because they did not want to deal with it for some reason, or their back end did not handle it properly or for some other reason was never really discussed. Could also be because of the maturity issue that their databases were not set up to handle it. Whatever the reason(s) the exchanges have, I would not mine to any address I do not control. Not to mention that if you don't control the address you can't sign a message so things like this can happen if you have to prove who you are: https://bitcointalk.org/index.php?topic=5389996.0 -Dave

I think that one main reason, especially at start, was that many (altcoin) mining pools were sending payouts no matter how small (no threshold implemented), and if one was mining to exchange address it was spamming it with small inputs which the exchange had to consolidate. Another good reason can be disputes. If one didn't receive the reward it had to be somebody's fault and the exchanges didn't want to be part of that. Of course, as you said, the DB maturity plus the various coins' clients running with probably much smaller resources could also have been playing an important role. But especially for Bitcoin solo mining, if one is willing to risk 6.25 BTC in 2022 by sending it to wallet under others' control... something must be very wrong in his setup (to say it nicely).

your doubts in choosing a wallet may create a dilemma. Moreover, you minimize the things that happen in your community. the exchange is just an alternative to exchange, save or manage your assets. if you want to keep it for yourself and your privacy you can use your desktop version of elektrum or bitcoin core. you spend equipment, power consumption, time and technicians for this, your alert attitude is right. Try to understand each of your friends' posts maybe you can summarize for an anticipation and additional understanding. for the role of the wallet, your preparedness and risk (if any)

It seems it would be best to mine to one's own address and then transfer to the exchange if desired.  This way if something goes wrong, you have cleaner records; additionally, you would be in precise control of the amount you want sent their way.