Crypto Academy Season 3| Homework Post For Professor @allbert| A world of Wallets and Exchanges by @verdad

INTRODUCTION
Hello steemians, I hope you are all doing great. Below is my task submission on Wallets and Exchanges, enjoy.

Question 1. Explain the differences between wallets and exchanges.

WALLETS
A wallet is an application software (program) that allows crypto users to send and receive cryptocurrencies such as BNB, ETH, DOGE, etc. from other users. It can be accessed by anyone and stores/saves private keys, Transaction history of its users. It was launched by Satoshi Nakamoto in 2009 when the Bitcoin protocol was released.

TYPES OF WALLET
Generally, there are 2 types of wallets to keep your ETH and other cryptocurrencies secure. These are Hot wallets and cold wallets. I know you are a bit confused right now, but don’t worry you would get to know what I am referring to after you are done reading.

HOT WALLET: A hot wallet is a wallet that allows cryptocurrency users to send and receive (exchange) different currencies from other users over the internet. Examples include; Trust wallet, Atomic wallet, and Exodus.

COLD WALLET: A cold wallet is a cold storage cryptocurrency wallet that stores encrypted tokens offline and provides higher security. Examples of cod wallets are; TREZOR one, KeepKey, and Ledger USB.

EXCHANGE
An exchange is an organized and open marketplace used by cryptocurrency users to exchange commodities (one currency for another). Its main purpose is to ensure secure, efficient, and fair trading. Examples of exchanges are; Coinbase, Kucoin, and Binance.

DIFFERENCE BETWEEN WALLETS AND EXCHANGES

WALLET	EXCHANGE
1. Used to store cryptocurrency assets for a long period of time.	For selling and buying assets between traders.
2. It’s a decentralized platform.	Exchanges are centralized.
3. Its uses have absolute control of their Tokens or Funds.	Less control on their tokens or coins.
4. Hackers find it very hard to hack and steal user information (Highly secured).	The security level is very less.
5. You have absolute control of your Private keys which enables you to Log in to your account.	No private key for login only your mobile phone number and verification code are required.

Which operations should be performed in an Exchange and which operations should be performed in a wallet (in terms of fees)

If you only keeping assets in your wallet, you will not incur any fees for using the wallets; however, when you are trying to complete a transaction, the owner of the wallet or the device hosting your wallet will charge you different fees, depending on the type of wallet you are using. The fees paid are mostly fixed (dollars or a percentage) and deducted from the total transaction value.

With exchanges, anytime a trader or investor performs a transaction, a fee is charged. The amount of fees charged depends solely on the exchange platform used in other to gain profits (by its developers). Taking Binance exchange as an example, 0.02% to 0.10% fee is charged on buying and selling.

Question 2. 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?

In my point of view, I think every investor/trader should have more than one exchange account because it is always good to diversify. Most of the assets are not listed in some of the exchanges and hence it's very advisable to explore other exchanges.

Also, having multiple exchanges helps to secure your funds in case one of the exchanges gets hacked or something unexpected happens. In addition, exchanges offer different instruments that are unique to that exchange. For example, Primexbt allows investors or traders to copy-trade through its Covesting module.

Every exchange comes with its own transaction fees thus; Coinbase, Kraken, and other Fiat to Crypto exchanges have high transaction fees as compared to Crypto to Crypto exchanges, so it's good to visit some of these platforms to save money(that's one of the main reasons why I have multiple accounts).

Question 3. What are better? Wallets or exchanges.?

To better make a decision on which one of the two platforms is better, I will talk about the pros and cons of both exchanges. The common function they both perform is the storage of coins. It is necessary to choose which one of the two will benefit/produce a better outcome for you in the long run.
Below are the advantages and disadvantages of wallets and exchanges.

ADVANTAGES OF WALLETS

1. One interesting service wallets provide is the swap option. This option permits users to comfortably swap assets on their platform.

2. A seed phrase is given out to users as part of their security measure. Also, they are available in two types, hot and cold. Users’ accounts are very much secured with these measures.

DISADVANTAGES OF WALLETS

1. Storage devices for offline wallets are quite expensive to obtain.

2. Wallets charge higher fees on swap transactions.

3. Private keys of wallets are not recoverable in case they are lost.

4. Trading of assets cannot be done on wallets

ADVANTAGES OF EXCHANGES

1. They give users the option to store their coins in the in-built wallets on the platform.

2. Users can recover their accounts if they lose their private keys.

3. Live trading of cryptocurrencies on a large scale can be done on their platform.

DISADVANTAGES OF EXCHANGES

1. They have a comparatively low level of security.

2. Their low level of security makes it inconvenient to store coins for a long term.

3. They are decentralized which means users do not have total (100%) control of their accounts.

I would suggest to an active trader to use an exchange account that has wallets to store cryptocurrencies that are currently being used to trade. Assets that are not being traded should be kept in wallets to ensure their safety.
I personally prefer wallets to exchanges. Assets stored on wallets are safer and I feel comfortable knowing my assets are safe

Question 4. Create an account in a wallet and in an exchange of your choice and show screenshots of the process.

HOW TO CREATE A TRUST WALLET ACCOUNT?

To create a Trust wallet, it's required you install the application on your mobile device by launching your Google Playstore app or you can open any browser of your choice and search for “Download Trust Wallet” and click on the Google Playstore link to initiate the installation process (all this is done because it has no PC version available at the moment).

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After the Google Playstore application is launched through your browser, click on install to start downloading (it would automatically be installed once the download is complete).

Click on open to launch the Trust Wallet application.

Now click on CREATE A NEW WALLET to create a Trust Wallet account.

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Accept Trust Wallet Terms of Services checking the small square box provided. Click on CONTINUE.

Check the square box also in the below screenshot to allow you receive 12 words that would allow you to access your account. Click on CONTINUE.

keep your recovery words save by uploading them somewhere safe. Click on COPY ( a screenshot of steps 7 and 8 is not allowed by the Trust wallet app in this step).

As seen, my wallet has been created successfully as shown in the screenshot below. Click DONE to finalize the process.

HOW TO INSTALL PALONIEX EXCHANGE?
• First search for poloniex on google and click on Sign up.

• Enter your Email address, user password, confirm the password and click on click to verify to verify your account. Click on the square box provided to agree with their terms and services.

• Click on SIGN UP to create your account.

• From the screenshot below, it can be seen that I have successfully created my account.

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CONCLUSION
I enjoyed taking part in this lecture because I inquired a lot of knowledge about wallets and exchanges since it is a subject that every trader or investor should/must understand adequately. Because to be able to store and exchange currencies depends on them solely. THANK YOU professor @allbert for providing us with such an interesting topic.