Crypto wallet vs exchange are significant terms in the world of crypto. The meaning of both terms is different. Crypto Wallet is software, i.e., generally used to store, send and receive cryptocurrency. Whereas, an exchange is a website that provides users with the facility of buying and selling Crypto Coins.
Exchanges and cryptocurrency wallets are two crucial tools that enable the smooth operation of this revolutionary digital sector. Since many wallets and exchanges are run by the same organizations, there is usually a misconception regarding their distinctions. These terms are significant, and learning about them will be beneficial to understand crypto. Before differentiating between Crypto exchange and crypto wallet, let us discuss them individually.
A Crypto wallet is a wallet that allows users to store, send and receive Crypto Coins. It keeps them safe & secure and users can track all the transactions. People can choose whether they want a hot or cold crypto storage wallet. With crypto wallets, users also get the authority to create pins and most wallets provide several security options.
Crypto exchange is a marketplace for crypto users where they can buy or sell their crypto. It is a service that can be done through some websites and with this, people can purchase digital currency or convert their fiat currency into digital currency. Market rates fluctuate on an exchange for cryptocurrencies, much like they do on the stock market. On exchange websites, the vast majority of wallets are web-hosted. To access your wallet, you must first sign up for an exchange account and log in.
What are the differences between Crypto Wallet vs Exchange?
The major difference between a cryptocurrency wallet and an exchange is that the wallet’s main function is to store your digital assets, whilst the exchange enables trading between different coins. The table given below mentions differences between Crypto Wallets and exchanges, which are:
|Crypto Wallet||Crypto Exchange|
|Crypto wallets are generally used to restore, send|
and receive crypto coins.
|In Crypto Exchange, users also get a wallet in which they get access to various crypto.|
|Wallets can be accessed online and offline.||Crypto exchange users need to be online because these are web-based.|
|Keeping cryptocurrency in a non-custodial wallet where you own the private keys to your crypto assets is often seen as a|
safer choice than an exchange.
|When you keep cryptocurrency on an exchange, a third party maintains the keys and hence, controls those assets.|
|These generally do not allow users to convert their crypto into fiat money.||In exchanges, crypto owners can convert their crypto coins into fiat money.|
|Two types of keys in the crypto wallet are private and public keys.||Users need a public key to send and receive any transaction.|
|Some wallets provide features like buying and selling.||Crypto Exchange is a marketplace for crypto owners where they can buy and sell.|
Crypto wallets and exchanges are not the same things. While you don’t actually store actual cryptocurrency in a Crypto Wallet, these wallets are designed to let you transfer and receive cryptocurrency over various blockchain platforms utilizing private and public keys.
Through the use of an exchange, one is able to quickly access all of their cryptocurrency account information. Details like balances make it easy to sell and exchange cryptocurrency. A lot of people think of the exchange as a kind of digital bank.