Steemit Crypto Academy – Season 3 - Week 1 - Post for @allbert

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)

Wallets

In cryptocurrency space, a cryptocurrency wallet is basically a gateway to any cryptocurrency assets on the blockchain. It is simply what is used to hold cryptocurrency assets. However, the cryptocurrency assets does not live in the wallet itself, instead, the wallet acts as a gateway to access the cryptocurrency assets that is stored on the blockchain. A cryptocurrency wallet allows users to interact with the blockchain network by providing users with a user interface gateway that to access the cryptocurrency assets on the blockchain.

A cryptocurrency wallet can come in different types, and as usual, there are different types of cryptocurrency wallets. The most common are the non-custodial wallets and the custodial wallet. The custodial wallets are basically wallets on cryptocurrency exchanges which means that the users doesn’t have full control of their funds and assets. The non-custodial wallets gives users full control of their funds and assets by providing users with private keys. The non-custodial wallets are the most popular and is what is considered the true cryptocurrency wallets. The different types of non-custodial blockchain and cryptocurrency wallets are;

Web Wallets - are basically blockchain and cryptocurrency wallets that live on the web and requires a browser to access the wallet online. Example myetherwallet

Software Wallets - Software wallets are either mobile wallets or desktop wallet. They are basically wallets that doesn’t not require a web browsers to access them. However, the also require internet connection in order to access them. Software wallets come as applications that can be installed on the device which is either a mobile device or a computer device. Example trust wallet, atomic wallet, exodus wallet, etc.

Paper Wallets - Paper wallets are basically wallets that are printed on a paper and does not connect to the internet. The keys are simply printed on a piece of paper and are meant to be kept in a secure and safe place.

Hardware Wallets - Hardware wallets are basically physical hardware devices that store the keys securely in the device, allowing users to access the wallets securely. Hardware wallets does have access to the internet on its own and requires the user to authorize connection to a gateway in order to access the wallet.

Exchanges

In cryptocurrency space, an exchange is basically a platform that allows users to trade cryptocurrency assets, buy and sell different cryptocurrency assets and give users the ability to exchange assets. There are two types of exchanges; the centralized exchanges and the decentralized exchanges.

Centralized exchanges are basically the most popular type of crypto exchanges at the moment with a lot of users… a centralized exchange is owned and controlled by a central entity hence the name centralized exchange. When it comes to centralized exchanges, user funds are controlled and are in the custody of the exchange once the funds are deposited in the exchange. Users need to create an account before being able to trade on centralized exchange. There are order books on centralized exchanges containing a list of buy or sell orders. There are a good number of centralized exchanges that are very popular in the crypto space at the moment. Example Coinbase, Binance, kucoin, Huobi, OKEx, Hotbit, and more.

Decentralized exchanges have become very popular in recent times and have gained more and more attention and usage in the world of DeFi. A decentralized exchange is not owned and controlled by a central entity or authority, it gives users full control of their funds and assets when it comes to exchange of crypto assets. A decentralized exchange runs on the blockchain and is fully decentralized which means that there are no third parties and rely solely on peer-to-peer transaction. There is nothing like order books in a decentralized exchange, instead users connect a wallet directly on the decentralized exchange protocol and perform the exchange transaction in a peer-to-peer way. . Example Uniswap, Pancakeswap, Binance DEX and more.

Differences Between Wallets and Exchanges

Wallets	Exchanges
Users have full control of their cryptocurrency assets in their wallets	Centralized exchanges have full control of user assets
Wallets are fully decentralized	Most exchanges are centralized
Non-Custodial	Custodial
wallets operates on the blockchain	exchanges operate on centralized servers
There are no downtime on wallets	There are sometimes downtimes on exchanges
Peer-to-peer transaction	Centralized exchanges act as third parties between the buyers and sellers
Cannot be hacked	Centralized exchanges can be hacked
No account creation	Account creation required on centralized exchanges
No KYC required	Some centralized exchanges require users to perform KYC
Provides users with keys	Centralized exchanges do not provide users with keys
Wallets are best for storing cryptocurrency assets	Exchanges arebest for trading and exchanging cryptocurrency assets

Operations performed in a Wallet

In terms of fees, the operations performed on a wallet is mostly storing of cryptocurrency assets and also sending and receiving of cryptocurrency assets from one wallet to another wallet. A wallet which provides users with private keys or seed phrase gives users the full control of their cryptocurrency assets which means that the assets are stored securely on the wallet and can be sent to another destination with full control. Since the transactions are peer-to-peer, the fees are much less compared to performing the same transaction from exchange to wallet.

Operations performed in an Exchange

In terms of fees, the operations performed on an exchange is mostly trading of cryptocurrency assets and exchanging or swapping from one cryptocurrency assets to another cryptocurrency assets. On a centralized exchange, there are order books containing list of open orders from buyers and sellers. The fees are much cheaper to trade internally in centralized exchanges. Buyers and sellers trade from the order book on the exchange. Because of high level of liquidity on exchanges, it is cheaper to perform trading operations on exchanges. On exchanges like Binance, holding BNB even reduces the trading fees which makes trading cheaper.

Why You think people should have more than one exchange account?. Do you have an exchange account? and Why that specifically?

In my opinion, the main reason why people should have more than one exchange account is because of diversification, opportunities, liquidity and features.

Diversification - Having more than one exchange account is great for diversification because it allows anyone to spread their assets for better risk management, instead of trusting all their funds and assets on a single exchange account. With this strategy, even though an exchange account is down, you can still have funds on other exchange accounts to perform trading or investing on cryptocurrency assets.

Opportunities - Having more than one exchange account allows anyone to take advantage of opportunities that may arise in the crypto space. We all know that most new cryptocurrencies are mostly listed on smaller and newer exchanges, this means that anyone can buy this new cryptocurrencies from these small exchanges and take advantage of the price increase when the coins gets listed on bigger exchanges like Binance, Coinbase, Kucoin etc. Also, not all cryptocurrencies are listed on all exchanges, having multiple exchange accounts allows anyone to buy cryptocurrencies of good projects with great potentials before it gets more and more attention and increase in price.

Volume and Liquidity - Having more than one exchange account allows anyone to trade on the exchange that offer more liquidity. Liquidity and volume are not the same on every exchange. This means that, exchanges with high volume and liquidity. Some coins have more volume and liquidity on certain exchanges, this makes it better for trading.

Features - Having more than one exchange account allows anyone to make use of specific features on the exchange. Some exchanges have specific features compared to the others. For instance, some exchanges allows trading features like OCO which is a great feature for trading. Depending on the exchange and features, it can help improve trading and help anyone make more profits.

Do you have an exchange account? and Why that specifically?

Yes I have – I have an exchange account to allow me to trade cryptocurrency assets by buying and selling cryptocurrency assets. I make use of Okex exchange a lot because of its amazing features and ease of use. Okex exchange is one of the top crypto exchange which means that there is a lot of volume and liquidity on the exchange which improves trading experience. Also, sometimes make use of other exchanges like Huobi, Probit to purchase newer coins or coins that are not listed on Okex. This allows me to also invest on good cryptocurrency projects and opportunities.

What are better? Wallets or exchanges?

In my opinion, there is no one that is better than the other as they both have their uses and benefits. Depending on the operation, wallets and exchanges have their pros and cons. A wallet is mostly storing of cryptocurrency assets and also sending and receiving of cryptocurrency assets from one wallet to another wallet. A wallet provides users with private keys or seed phrase which gives users the full control of their cryptocurrency assets. An exchange is mostly trading of cryptocurrency assets and exchanging or swapping from one cryptocurrency assets to another cryptocurrency assets. Even though an exchange can be used to hold cryptocurrency assets, it is much better and secure to hold cryptocurrencies on wallets that provide private keys or seed phrase. Depending on the operation, a wallet and exchange have their benefits, pros and cons. For holding cryptocurrency assets, wallet is better, for trading cryptocurrency assets, exchange is better.

Create an account in a wallet and in an exchange of your choice

Creating a Dash Wallet

Dash is one of the top cryptocurrencies with great potential and I like it a lot. The amazing thing about dash is that is has its own wallet which increases the security and user trust. To create a dash wallet, it is important to visit the correct official dash website URL https://www.dash.org

I will choose to install it on my mobile device because of convenience. To do this, Click on get started menu and select downloads. You can scroll down and click on view all apps on the "get the app" section

The Next thing to do is to Select your preferred device type, I chose android for this installation

Click on google play download and visit google plat to download the dash wallet from the google play store. You can also choose to download the apk file directly to your mobile device by clicking on download apk. I will choose google play because I prefer to download applications from google play store.

After the downloading is completed, it will install the wallet on your mobile device. After that is completed, begin the setup process.

Click on create a new wallet to begin the creating process,

Set up your 4 digit pin as You will be prompted to do so

click on the secure now button On the next screen,

reveal the recovery phrase by clicking on show recovery phrase. this is a very important step as it ensures security of your wallet

Write the recovery phrase securely and After writing that down, check on I wrote it down check circle on the next screen and continue.

erify your recovery phrase (seed phrase). Do this by selecting the correct recovery phrase words in their correct order individually

Done, your dash wallet is now created.

Complete, Input your pin to access your dash wallet.

Creating an OKEX exchange account

I will be creating an account on OKEX exchange. OKEX is one of the top crypto exchange that allows users to trade a variety of cryptocurrency assets. I make use of Okex exchange a lot because of its amazing features and ease of use. Okex exchange is one of the top crypto exchange which means that there is a lot of volume and liquidity on the exchange which improves trading experience. Creating an account on Okex is very easy and straight forward and requires a few steps to do.

First, visit the okex exchange website and click on signup to begin the account creation process.

The next page will show the sign up form where you will have to fill in the required details. I chose to use email to signup. I input my email and password and click on signup to complete the sign up process. A verification email was sent to the inbox, click on the verification link or button to verify your email and account. After that, the signup process is completed. You can now deposit funds into your Okex account to begin trading cryptocurrency assets.

To deposit funds into the OKEX account, login to OKEX your exchange account

Click on assets tab and select the deposits. You can deposit any cryptocurrency asset that is accepted. I We will be using USDT as it is a widely accepted stable coin that is good for trading

Choose the preferred blockchain network to deposit the USDT. Tron blockchain network is my choice because of speed and low fees

After the USDT fund deposit is completed, You can now start trading on the exchange or make use of other financial services and features of the OKEX exchange.

Conclusion

Wallets and exchanges are very important aspects in the blockchain and cryptocurrency space and they both play a major role. They both have their uses and benefits. Depending on the operation, wallets and exchanges have their pros and cons. A wallet is mostly storing of cryptocurrency assets and also sending and receiving of cryptocurrency assets from one wallet to another wallet. A wallet provides users with private keys or seed phrase which gives users the full control of their cryptocurrency assets. An exchange is mostly trading of cryptocurrency assets and exchanging or swapping from one cryptocurrency assets to another cryptocurrency assets. A wallet and exchange have their benefits, pros and cons. For holding cryptocurrency assets, wallet is better, for trading cryptocurrency assets, exchange is better.

@allbert