Crypto Academy / Season 3 / Week 1 - Homework Post for [@allbert] … by @benton3
Hello great steemians, I am very happy to be with you once more today. I will be doing the homeworktask of @allbert with the course topic - Task 1: A world of Wallets and Exchanges..
Wallets and Exchanges are both very important in the world of blockchain technology and crypto currencies. Both are needed to enable the smooth running of the blockchain. Just like we have the banks as a meduim through which we carry out financial transactions, so wallet and exchanges serve the same purpose.
Explain differences between wallets and exchanges as well as mention which operations should be performed in an Exchange and which operations should be performed in a wallet (in terms of fees).
A wallet is an application that is used in storing, safeguarding and retrieving our crypto assets. We can refer to them as a safekeeping device which is used to sakekeep important documents or other important things. This can be done since the public and private keys of the crypto assets are stored in cryptos blockchain. With these keys, we can transfer and receive crypto asssets.
An Exchange is an application that enables to have access to the crypto market. It provides a medium through which i can perform so many transaction with my crypto assets. In an exchange, a person has the ability to to trade his crypto assets for another asset, which is even inclusive of fiat currencies. It provided an avenue of physically feeling and making use of the value of our crypto assets to buy and purchase things we need locally.
Differences between a Wallet and an Exchange
When creating a wallet, the user is given a phrase called 'seed phrase'. This is a set of words arranged in a specific order which confirms you as the owner of the wallet. The seed phrase can be used to restore your wallet even in cases of loss of device. While for an exchange the user creates a password using his email address. He also presents some other documents like identity card or other legal documents for identification.
Wallet gives you full control of your assets in the wallet, no one can have access to it unless the seed phrase is compromised. While in an exchange, you dont have full control of the assets in your exchange wallet.
Transaction fees are higher in wallets than in exchanges.
Some other transactions like trading of cryptos cannot be done in wallets but can be done in exchanges.
Exchanges provides an easy way for crypto users to convert crypto assets to fiat currencies while wallets cannot perform that important function.
Wallet can provide anonymity to its customers, but such cannot be done in Exchanges. You must fully identify yourself.
Wallets are used for longterm storage, while exchanges are used for shorterm storage basis.
which operations should be performed in an Exchange
The operations performed in an Exchange are
A crypto owner can trade a particular crypto for another with almost no fees.
The exchange platform provides opportunity for fiat to be deposited in order to acquire cryptocurrencies with very low fee. In the same way, the crypto assets could be converted to cash easily for use by the owner.
Exchange also provides a kind of loans referred to as leverages to its traders, this helps them trade with more capital than they have with the exchange.
Exchanges provides some other functions like providing a window for staking, which is an investment window for crypto owners where they earn interest by locking up their crypto for an agreed period of time.
For all these services, little or no fees is charged.
What operations can be performed in a wallet?
The operations performed in wallets are majorly holding of the assets, storage and accumulation.
In some of the wallets swapping of coins can also be done. For instance, in Trust wallet, you can swap your BNB to other coins. It can also be done with other dapps, but we should note the fees charged are usually very high.
Some of the wallets also do staking and freezing for certain assets, for which to earn interest too.
In general, fees charged in wallets are much more higher than those charged in exchanges.
In your own words, Why You think people should have more than one exchange account?. Do you have an exchange account? and Why that specifically?
It is always said that "a person should not put all his eggs in one basket". So for better financial management and shielding from possible difficulties that could be encountered in the future, it is always better to manage more than one exchange accounts.
For example, an exchange might be having network issues, may be hacked, might be doing some maintenance, etc. At that point, if you have only one account, you will get stuck. But having your assets in several exchanges still keeps you going and not stuck as until they resolve their issues. Some weeks ago, we had challenges withdrawing and depositing steem iin Binance, I mmediately switched to Poloniex and that salvaged the situation. Another important reason is to enusre you carry out your transaction with as low fees as possible. Having multiple exchange accounts helps you know which exchange fees are lowest. Another reason is that a crypto offered in exchange A might not be offered in exchange B.
So when you have more than one exchange, you can always compare their benefits and disadvantages too.
I have a Binance account and Poloniex account presently. I use Binance majorly, it is very user-friendly, fees are low, prices of cryptos are very competitive compared to other exchanges and offers other wonderful services that some other exchanges are yet to catch up with.
What are better? Wallets or exchanges.?
Having considered some many things about a wallet and an exchange, i would say that there seems to be no basis for comparism, since the two perform what I may refer to as different functions. The user in this case determines which to use based on his need and what he wants to achieve from owning a wallet.
I personally would go for the two, knowing that I am using them for two different things and reason. I will have a wallet to store investment coins, and avoid tampering with them, while I will have an exchange wallet in order to buy, sell, trade, convert assets to fiat for personally use, and other related activities.
Create an account in a wallet and in an exchange of your choice and show screenshots of the process.
To create an Exchange account.
I am creating a new account in Binance.
I am using a referral or invite link from a friend.
I copied it and pasted it on the search bar in chrome browser.
BInance invite link.
The account creation page. Input the details and click on create account.
Binance screenshot
This page is used to verify that you are not a robot by placing the image on its shadow.
Binance screenshot
An email verification code will be sent to tour email. Type it into the 6 boxes. Your Binance page opens.
Binance screenshot
It brings a dialogue box for se ure your account more. I did phone verification. This means that any withdrawal and deposit must be authorised by me via my phone number. Binance will send a code to me, i will now use it to complete the transaction.
After that, I just did basic verification to enable do transaction to a certain level.
I completed the basic verification.
Binance screenshot
My account is now ready, the only thing remaining is to fund and start trading.
Binance screenshot
This is how to create an exchange account in Binance.
To create a wallet account, i would be using Trust wallet to demonstrate that.
First, you download the trust wallet app from playstore, which i have already done.
After downloading, it will bring you to a page to create account.
Trust screenshot
Click on create wallet
Trust screenshot
After this page, it will bring out the page containing the 12 word phrase, and you will be asked to copy and back it up.
After you click continue, another page will come out asking you to tap the words based on their order. From 1 to 12.
Once you are done, click on continue and
Trust screenshot
Hurray you have created a new crypto wallet.
Trust screenshot
This is the new wallet I created.
Conclusion
Conclusionally, we can see that in this trending world of cryptocurrency, both the wallets and exchanges are vital for the smooth operational running and management of the digital world. It is very wise that all do their best to acquire these knowledge to assist them manage their digital assets.
Hello @benton3, thanks for performing the above task in the first week of Steemit Crypto Academy Season 3. The time and effort put into this work is appreciated. Hence, you have scored 7 out of 10. Here are the details:
Remarks:
You began working on the assigned task with the required amount of effort we look out for. However, I noticed the quality of your work declined halfway through.
Comparing the way you answered Question 1 versus Question 3 got me wondering why you decided to hold back. You could have provided more details as to your preference between exchanges and wallets.
I would also like to know why you decided to take a shot of your screen using a camera when you could clearly use a screenshot. If the photo size was an issue, you could simply crop or resize it.
Overall, it's a decent work but could have been better if you had put in more effort in answering Question 3 and another round of proofreading to eliminate grammatical errors. We do appreciate your time and effort and we look forward to your post next week.
Hello professor, thanks for going thru my work. Drop in that quality was not intended. My device started hanging and that affected my response to question 3, since I was struggling with it.
The same issue happened with the screenshot, I had to use another device to complete the creation of account in Binance, could not do the screenshot with both phones, so I had to take a photos instead.
On the grammar, i will work on that, to proof read more carefully before sending. However, use of translators sometimes makes our grammar ambiguous and unclear.
In all I appreciate.
You're welcome.