Looking to get started with cryptocurrencies? You’ve probably heard about crypto exchanges like Binance, Kraken, and Coinbase. If you’ve done more research, you’ve probably heard about crypto wallets. These are two common ways of dealing with crypto holdings and trades. You can use either or both, depending on your needs.
Want full control over your assets and don’t mind dealing with technical complexities? Choose wallets. Do you prefer the convenience of trading with someone else managing the private keys and technicalities? Go for an exchange account. But is it that simple? Here’s an overview of when to use crypto wallets and exchange accounts:
When to Use Crypto Wallets
If you’re new to cryptocurrencies, you should probably start with an exchange site. However, you’ll eventually need to learn how to handle crypto wallets, which offer the most secure way to store and manage your assets. Wallets give you full control over private keys and ownership. You can send funds to whoever, whenever, without any restrictions. Fancy real money casino games like slots, roulette, blackjack, poker, and live dealer shows? Maybe you want to take advantage of exclusive crypto deposit bonuses. All you need to do is scan a QR code of the crypto address the casino provides. You can also copy it. Paste the crypto address into your wallet and initiate the transaction.
Verify the address and amount, then wait for the transaction to be processed on the blockchain. Your deposit will be reflected in your casino account almost immediately. The process is the same for all other online purchases, and crypto transactions are usually instant or processed within an hour. Crypto wallets can be hot, meaning they’re software-based and connected to the internet, or cold, which means they’re hardware-based and offline. Hot wallets offer convenience, but you should make sure the wallet is protected from online threats, such as hackers. Cold wallets are ideal for securing long-term holdings you don’t plan to access any time soon. Ultimately, wallets are a great choice if you know your way around private keys and want full control over your crypto.
When to Use Crypto Exchange Sites
Crypto exchanges are not just for beginners but everyone who plans to buy or sell cryptocurrencies. These are more like stock exchanges but deal in crypto rather than stocks. They’re intermediaries that use custodial wallets to hold your crypto assets, so you don’t need a private wallet. This frees you from managing private keys and worrying about the security of your cryptos. Simply create your free account with a leading exchange like Binance or Kraken and start selling and buying crypto. Most exchanges need a minimum fiat amount deposited to allow you to start buying crypto. Make sure you set up a strong password with multi-factor authentication to protect your exchange account.
Crypto exchange sites offer convenience and give you quick access to your funds. You can also find a wide range of cryptocurrencies, including BTC, ETH, XRP, LTC, and even fiat currencies like USD, EUR, and CAD.
The popular exchange sites are centralized, meaning they’re managed by a central authority and hold your funds in custodial accounts. You can also find decentralized exchanges built on Blockchain technology and self-executing smart contracts. These exchanges allow you to gain more control over your account and assets while leveraging the conveniences of an exchange website.
Key Takeaways and Making a Choice
The key question is, how do you plan to use your crypto funds? Both wallets and exchanges let you hold, send, and receive crypto, but things are different in terms of control. The best practice is to use both and enjoy maximum security and convenience. A wallet provides you maximum security and full control, but you need technical knowledge to manage your private keys.
Centralized exchange sites offer trading convenience, allowing you to buy and sell different types of cryptocurrencies and even fiat. You can also opt for decentralized exchanges to gain more control while leveraging the benefits of an exchange platform. Use exchange sites for easy access and asset trading and private wallets for securing long-term holdings.