When you start investing in cryptocurrency, you’ll have to choose between a wallet vs exchange wallet. Both will allow you to store your cryptocurrencies, but they are different.
Let’s find out the difference between a cryptocurrency wallet vs an exchange wallet.
There are two types of wallets.
- Private wallet (Non-Custodian wallet)
- Exchange wallet (Custodian Wallet)
Private wallets gives you full control over your private key. The key is the only way to access your cryptocurrencies, so having full control makes it inherently safer in terms of storing your currency.
On the other hand, Exchange wallets are made by the individual exchanges like Coinbase, Crypto.com etc. for trading purposes within the exchanges. The wallet is integrated neatly into the exchange’s trading and selling functionality. As such, unlike private wallets, the exchanges have a right of users’ private keys.
For example, if you want to transfer 100 USDT, you will have two options,
- You can send from your Private wallet or
- You can send it from your Exchange wallet
When you transfer tokens from your Private wallet, the transaction is between two parties and your wallet address will show once the user receives the tokens.
On the other hand, transferring on an exchange wallet, you have to provide your wallet address in receipts and the transfer of tokens will take place on the Exchange’s wallet. When the user receives tokens, he will see the Exchange wallet address and not your Private wallet address.
We strongly recommend the use of Private wallets when trading on FINXFLO.