Crypto Academy Season 3 Week 1 Homework Post for (@allbert) - A world of Wallets and Exchanges -

This course is related to Wallet and exchange. The professor @allbert explain in very clear way the difference between these two. Reading the lecture thoroughly, now I am going to participate in this homework.

1- 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).

Have you ever heared about binance exchange, Huobi exchange, Poloniex exchange, etc? The exchange are the platforms where we are able to perform the transactions, We are able to buy the crypto currency of our own choice through exchange. We can hold the coins as long as we want. We can sell our coins at any time on exchange. So exchanges are used for buying or selling the crypto currencies. This is main purpose of the exchanges. Many other features are also their in exchanges such as staking which allow the user to earn the income but the main and central purpose of exchanges is the trading of crypto currencies.

When we buy any crypto assets and want to hold that assets for some time, then we move toward the Wallets. Wallets are use for storing our invested coins. We can store our crypto coins in our wallets as long as we want.

Differences between wallets and exchanges

The wallets and exchanges are completely different from each other. Here i will mention some differences.

Let's start from the registration. When you start registering yourself for an wallet account, it may tire you because registration is a lengthy process in case of wallet. You are asked for many things and personal information to enter to register yourself for a wallet. You need to keep your keys which are given to you while registration process. But in case of exchange, a very basic information is required to enter. Just enter that information and do not need to be worry bout keeping backup of your passwords, keys, etc. It always a good approach to keep the backup of passwords and keys of all your accounts but in case of exchange, if you forgot to keep backup and lost your password, you can get it back to by claming.

The Wallets basic purpose is holding the coins for its user. The user can store his assets in wallets and can access the account any time using the keys. But exchanges are use for different purpose. In exchange, you buy and sell the crypto assets and earn the income. The exchange platform are accessible any time to the user.

The exchanges are also able to store the coins. You can store your coins in exchange instead of wallets. But you cannot perform the transaction of cryptos in wallets. The people prefer sometime the exchanges over the wallets to store their coins because the wallets are hard to manage. You should be very careful about the keys which were alloted to you in time of registration. If you lost your keys, you will not be able to access the wallet next time. The keys are always require to access your wallet account. There is no way to get the wallet keys back. You cannot get them back from anywhere if you not have backup. You whole account will be waste. The coins which you have stored in you wallet will also be waste because you cannot access them.

But if you lose you password in exchange, then you do not need to worry and hyper because you can get your password back. In case of lossing password, you don't lose your account forever.

The wallets are considered more secure. You are asked for the keys to enter to get access to your wallet. So if someone try to access your wallet, he cannot do this without the keys so your wallet remain save from the access of illegal and unauthorized people. But if we talk about exchanges, they are not as much secure as the wallets are.

Which operations should be performed in a wallet.

On exchange, the investors invest money to get profit. Many ways are there to earn the money. You can buy and sell the coins and get the good profit. Beside the buying and selling, you can perform staking, CFDs, etc. The transaction fee is usually very cheap. Some exchanges are even free of cost. You do not need to pay anything for transaction.

On wallet, You can hold your assets as long as you want. But now some other feature for the users are added which can help the investors to are the profit even just by holding the coins. Like staking, you do not need to buy or sell the coins again and again to get profit. In staking, just hold your coins for some duration. And you would get income for that. This feature is now added in many wallets.

But I would prefer the exchange platform in any case because they are less costly and tension free. You can perform the trading and can hold the coins too. You do not need to store your wallets all the time because you can do this in your exchange account too.

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 think having multiple exchange account is good approach. There are multiple reason:

We know that the exchanges are there to facilitate the investors to perform the trading of crypto coins. You can invest the money only in those coins which are available on the exchange platform which you are using. The exchange platform not offer all the coins. SO having multiple account will facilitate you o invest money on the coins which are available on those multiple account which you have. Now you will have more options to make investments because you have more accounts.

Sometime, you might heared that this account is not working in that country. So if you have just one account, and that get banned for some reason in your country, then you would face a lose. But if you have multiple accounts, then you can perform your transactions using other accounts. You do not need to stop. You can continue as trader on other accounts.

If you have just one account, and that account might get hack for some reason, now what you would do. You lost your all money which you had in your account. But if you have multiple account, you can divide your money on those accounts. If the problem occur in one account, then you can use your assets which you have stored in other accounts.

There are some exchanges which facilitate you to perform the transaction even on new cryptos, The news coins are introduced on some exchanges. While some exchanges don't support new coins. SO if you have account in those exchanges, you can invest your money after the proper analysis in new coins. If the future of coins will bright, you will have the great profit.

So it's better approach to have multiple accounts. I personally use the Binance. I use these two account for trading. I use the binance because it offer you coins in a large range. You can invest your money in any coins(available on binance exchange) which you think will go up in future. The Binance account is very easy to manage.

This is a well knwon exchange platform. It is reliable because it's security is managed by the highly qualified team who invest big investment in maintenance the security of Binance. Moreover, you by and sell the coins at their real price. You do not pay the extra because the trading volume of Binance is very high.

What are better? Wallets or exchanges.?

This question is tough because it confuse me. The wallets have its own characteristics and exchanges are popular for their own feature. Both are different from each other in their function. The wallets are useful to store the coin. You can save your assets for long duration of time without having worry that they would get steal. On the other hand the exchanges re being used for buying and selling the crypto currencies.

But now, some changes are brought in both wallet and exchanges. Some common features are being added in these two such as staking. You can perform staking on exchange as well as in wallet too.

The wallets are now become very advance. You can store your assets in wallet but now you are also able to perform the trading of coins on wallets. Now the functions of exchanges are now has been added in many wallets such as Trust wallet.

Now the exchanges are becoming the decentralized but people still are using the centralized in a very large range. The decentralized are more beneficial such as the information become more secure as no third part can access your information. Gradually the world will start using the decentralized exchange which will be more beneficial as compare to centralized.

So i will prefer the Wallet. Now many popular currencies are now available on wallet such as trust wallet. You can perform the transaction on wallet too. The wallets are more secure. Your assets remain more safe in wallet instead of centralized exchanges.

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

How to open an account on Poloniex exchange.

Visit the https://poloniex.com/. Click on the Sign up on the left side to register yourself on poloniex.

Enter email, password then confirm your password, tick on the privacy policy and SIGN UP.

Next time when you will login, you need to enter your email and password.

How to Open Metamask Wallet

Visit https://metamask.io/. There will be a download option on the page. Click on that

Click on Install metamask for chrome on next page.

Click on Add to chrome. It will add the Metamask extension in chrome.

When the extension get downloaded then just click on the Get started.

You want to create the wallet so in next page, click on create wallet.

Now enter the password and confirm that again

Next page will be to inform you that keep your password carefully. Next you will use that again

After arranging the password which was given in last step. It was consist of 12 word. Then click on all done. And your account is ready.

Conclusion

The exchanges are use for the buying and selling the coins. Many other feature are also there to earn the income. While wallets are use for the storing the coins. You can hold your coins in wallets as much long as you want. But now the wallets are also offer you the transaction facility.

I successfully create account on poloniex and Metamask. Thank you professor @allbert for this informative lecture.