Crypto Academy Season 3 | Intermediate course by @allbert -Task 1: A world of Wallets and Exchanges

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As crypto currencies have become more famous and widely gaining acceptance, wallet and exchanges exist for safe and secured trading and storing of cryptocurrencies. This assignment focuses on choosing the right exchanges and wallets as you journey on this crypto space. Thank you professor @allbert for this lecture.

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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).

In the world of cryptocurrencies both wallets and exchanges exist to coordinate the buying, selling, and storing of of crypto assets. Some people confuse the two to serve the same purpose but that is not true.

Exchanges are software's developed primary for buying and selling cryptocurrencies. A trader can also swap one crypto asset with another crypto asset of the same value on an exchange. They usually offers several indicators such as Bollinger Bands, RSI and MACD to identify the right time for buying or selling of crypto a crypto asset but such indicators can do not come with a crypto wallet though there are exchanges like binance and Houbi Global which have a built in wallet for easy buying and selling straight from your wallet. Some wallets such as Tronlink wallet allows you to swap one crypto asset to another using the JustSwap option.

Crypto wallet where designed for long term storing of crypto assets whiles exchange wallets are preferably designed for short term storage of crypto assets. There are several types of crypto wallets such as cold wallets or hardware wallet, hot wallet. The cold wallets are offline wallets that allows crypto owners to use save their wallets offline, these types of wallets can also be called a hardware wallet. Examples of such wallets is the ledger Nano S or the ledger Nano X which comes in the form of a flash drive and it duty is for storing cryptocurrencies. The difference is that it may allow the storage of only few crypto assets as compared to the exchange wallets.

Wallets can be used for sending and receiving crypto currencies but does not extend to the use of indicators such is the case with exchanges. This is what makes using exchanges more convenient than crypto wallet because you willl need to connect hardware wallets to a laptop or computer to access the internet in other to be able to perform any transactions but with hot wallets like binance and Trust wallets mobile apps, you can get access on the go.

It is more secure to use a hardware wallet because it offers you full control over your wallet by given you your private keys but exchanges do not give you absolute control over your funds.

Hardware wallets comes with a price ranging for $59 and more. This may not be really necessary as it is somewhat expensive for starters in the crypto space whose asset value may be around $10 to 100 when the wallets which comes with exchanges offers almost the same without cost. You can buy a hard wallet when your assets multiplies to the extend that buying a hardware wallet would not be a problem.

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?

I believe having several exchange accounts is not a bad idea because for example Safemoon is not listed on Binance but you can get it on trust wallet. this is the same with several other crypto currencies which have a potential but before it is announced by binance and listed, there prices would be high already. So having several exchanges really help.

Rate factor, I realized houbi charges 0.04% when buying a cryptocurrency which is higher than binance no fees on buying . So, you see you can save more trading on some exchanges than the others.

Some exchanges is more complex to use as compared to others. Take for example exchanges like Binance, offers lite and pro versions for new users and professional so with the lite side of the app, you don't get to stress a lot when you are a starter in crypto.

On may 7, 2019, Binance was hacked by some hackers who successfully made away with some 7000BTC from users which amounted to 40 Million USD at the time so, supposing all of ones assets where on binance at the time and you where affected by this raid, you can imaging the gravity of such an attack on a single person. I believe this is one of the reasons why you need to have several exchange accounts for your own safety.

Houbi for one rewards new users 170USDT for completing a task which is not so on other exchanges. So as a starter, you can consider all of this as part of your investment journey. That 170USDT can be used to investing in some other cryptocurrencies which can be added to your investment portfolio.

Currently, I am using Houbi, Tronlink, Trust wallet, MetaMask , Binance.

What are better? Wallets or exchanges?

I will choose wallet because wallet offers total custody over assets as compared to a exchanges will holds your crypto asset for you. There are decentralized wallets like tronlink and trustwallet which basically does all that an exchange can do with just a few limitation. Comparing the two, I think one need to think about security as wallets like hardware wallets are super secured compared to other wallets but there is the need to consider what exactly one want at the moment because exchanges offers a lot of indicator which assist one in making informed decisions when buying a cryptocurrencies.

Create an account in a wallet and in an exchange of your choice and show screenshots of the process.

For the sake of this assignment, I will choose Gate.io.

• Open your browser and search for https://gate.io and click on sing up

• Fill in your credentials like username, email address, password to create the account

• After creating the password and proceeding, a pop up will ask for you to enter a fund password which should be different from the login password and then, click on create account.

• A captcha will appear for you to slide into position, once that is done, click to continue
  

• Check email and click on the confirmation link to verify your email. You will then have to enter your username and password and then click on log in to proceed.

• Next page is the Anti-Phishing Verification to cross-check if your URL matches any in that of the website to avoid falling victim to phishing site. It the URL matches, then click on confirm to continue

• A short code will be sent to your email that you have to input into this next pop up in other to proceed.
  

• Your account is registered and you are free to load your wallet for trading.

Conclusion

Knowing the kind of wallet I use to store my crypto asset and what it means to have the one which offers me more security is crucial as a beginner in this crypto world. I have also understand why the wallet and exchanges I use should be considered to know I am not paying more than is necessary when trading a crypto asset and which of the two will best help my cause. It has been a wonderful journey and I have gained some additional knowledge.

Ps: Screenshots are from gate.io