Hello Everyone,

I am happy to be a part of this weeks intermediate course. And congratulations once more to professor @allbert on your new assignment as a cryptoacademy professor. Am here to answer the questions followed after the lectures on "The world of wallet and exchange"

Source

QUESTION 1: Explain the difference between wallets and exchanges as well as mention which operations that should be performed in an exchange and which operations should be performed in a wallet(in terms of fees)

Before i will answer the question on the differences i would like to state what a wallet is and what an exchange is, although my able professor @allbert has done justice to this subject.

A wallet is used for the storage of crypto currencies for a long time , it is usually a device online or offline. A wallet stores both the active key and public key of the owner.

while,

An exchange is seen as a third party in form of a platform that allows forms of trading which includes selling, buying, transferring of crypto currencies and even short time storage.

Differencies between a wallet and and exchange.

Although those who are not conversant with the crypto world tend to confuse wallet from and exchange, even me for instance was confused at what the difference is but i av been clearified on it now following the lecture given on this topics @cryptoacademy.

I will be talking about their difference in 4 headings namely.

• Storage
• Control
• Security
• Accessibility

STORAGE :

The difference between a wallet and an exchange interms of storage is seen as this;
Wallet is mainly used for keeping crypto currencies for a long period of time while exchange sole purpose is not to keep crypto but for trading purpose such as selling and buying. So storage of crypto in an exchange is for a short time.

CONTROL:

In a wallet there is full control of the cryptocurrency by the trader/owner. The owner decides what to do with it and how to use it without any limitations. While in an exchange the control of the crypto currencies is shared between the exchange and the trader/owner or control is limited. Also the control of private keys in a wallet rest on the owner of the wallet while for an exchange private key is known by the exchange too.

SECURITY;

A wallet is regarded to be more safe than an exchange, because the owner of the wallet is responsible to safe guide and keep his wallet secured(He has his private keys) An exchange is seen to be prone to insecurities such as hacking of account because the keys are saved on the exchange or with the exchange.

ACCESSIBILITY:

For a wallet, cryptocurrency are easily accessible to the owner/trader than you see on an exchange.

WHICH OPERATIONS SHOULD BE PERFORMED ON A WALLET AND ON AN EXCHANGE

FOR WALLET:

• long term storage of cryptocurrencies
• Transfers from wallet to exchange
• The swapping of crypto currencies can be performed.
• Serves as address for receiving and sending Crypto currencies.

FOR EXCHANGE

• The buying of crypto currencies
• Short time storage of crypto currencies
• The selling of crypto currecies
• The transfer crypto currencies from exchange to wallet.
• The exchange of traditional cash/money to get cryptocutrencies.

QUESTION 2: In your own words, why do you think people should have more than one exchange account? Do you have an exchange account? And why that specifically?

Wow! Generally in life there are people who love varieties, they love to have a touch of everything. But for the purpose of this topic i have this to say; people should have more than one exchange account because of my reasons below;

• Some exchanges may not have all the crypto currency traders want so they may decide to have more than one just to balance up the missing crypto currency in the other one.

• second reason would be the fees charged during a transaction. Some traders may feel one exchange fee of transaction is more cheaper than the other for a particular trade so he falls back to the cheaper exchange.

• My third reason would be for the sake of security. There is an adage that says

dont put all your eggs in one basket

This simply means in terms of security bridge such as hacking, all your funds will not be gone because you dont have everything on just one exchange.

Do you have an exchange? And why that specifically?

Yes i have an exchange..And it is Poloniex crypto exchange.
I chose it because

• It is easy to use
• It has varieties of cryptocurrencies on it.
• There is a risk reduction in volatilty
• The transaction fees is not so much.
• verification of identity is only required when the trader wants to trade large so it encourages people like me that is starting small.

QUESTION 3: What are better? Wallet or exchange?

This question really got me thinking for a while.
The use of wallet is good as it has its own unique usage and advantages likewise that of an exchange. Wallet are strictly for storage purpose while exchange are for trading purpose. But since am asked to chose one i would like to chose wallet for the sake of the following.

• The purpose of security: i prefer wallet because with wallet i know my account is safe with me since am the only one that has acess to my keys. I would not want to be told stories tomorrow. And i only trade once in a while so if i want to trade i would transfer to my exchange.

• The purpose of Control: I want to be incharge of my funds and say when i want to use it and how i want to use it. An exchange wont give me that, rather it puts some boundaries for me.

• The purpose of Accessibility: its no news that using a wallet gives me easy access to my crypto currencies. So i love to always have access..

QUESTION 4: Create an account in a wallet and in an exchange of your choice and screen shot the process.

FOR AN EXCHANGE
I will be creating a poloniex crypto exchange account. And the steps includes the following;

Step 1: I went to google play store

Step 2: typed poloniex crypto exchange on the search menu and click it.
Step 3: I click on install

Step 4: After it has installed I click open

Step 5: I click on sign up and fill the form that appears which includes email, password and and confirm password as shown below.

Step 6: I Click on the verification box to verify my email

Step 7: I went to my mail and check for the message sent and click on the verify my email button as shown below.

Step 8: click on the i agree terms and condition on the box and finally i signup on the box below as shown on the screenshot.

Step 9:I click on login and fill the form that is below then login.

Step 10: Click on verify identity, it brings out a form to fill personal details like name, birthday etc

Step 11: I clicked on continue

Step 12: It brings out a section to snap your identity card, front and back.

Step 13: face recognition is taken by putting once face on the section allocated.

Pls note that step 12 and step 13 has no screenshoot because app does not allow screenshot at this point

A PoloniexExchange account has been created

FOR A WALLET
I will be creating a coinbase wallet and the steps is as follows;

Step 1 : I went to google play store and search for coinbase wallet by typing it on the search space.

Step 2: Click on install and after installing click open as shown below

Step 3: After the app opens i Clicked on create a new account as shown below.

Step 4: I Reviewed terms and condition and clicked on Accept as seen on the screenshot

Step 5: I Chose a username for myself on the space made for it below and i clicked on next.

Step 6: select public and click next

Step 7: Instruction on how to protect my wallet comes up. I made my chose on how i want to protect it.

Step 8 : A recovery phase opens up that contains 12 words, i wrote them down in a secured place and clicked back up on google drive.

Step 9: i created a password for cloud backup

Step 10 : i clicked Done

pls note that Step 7 down to step 10 was not allowed to be screenshot because of the app, the app does not allow screen shot at those points

my Coinbase wallet has been created

CONCLUSION

The concept of wallet and exchange is a game changer for the crypto world. I just imagine if there were no wallets and if they were no exchanges. Both has been of great use to crypto traders having their advantages which can not be overlooked, the choice is left with the trader which he wants to use at a given time or period of time. Its been an amazing time learning about both.

Thank you for reading.