To know the difference between cryptocurrency trading platforms and wallets and if you have to own an account, here's how to understand it
Digital currency is a form of digital money that exists only on the internet, and decentralized digital currencies do not have a central bank that keeps or controls it, which makes it more safe to move and send, which is virtual intangible money such as gold and silver, and exist only on the internet networks and internal and external wallets.
The nature of the formation of digital currency
It is a set of encoded equations that work in reverse mode making their decoding difficult to impossible.
What is cryptocurrency mining ?
Mining is the encryption of currencies and the solution of equations to them by devices, which makes them win parts of the currency so - called part of Satoshi, and satoshi or part of the currency is the name of the inventor of the system of transactions and encryption of digital currencies
Digital currency trading platforms
👉 Central trading platforms :
Most cryptocurrency trading platforms in the world are centralized trading platforms. This means that when a cryptocurrency is deposited on the platform, it is essentially transferred to a wallet owned by the platform. Conversion fees are low compared to decentralized platforms.
👉 Decentralized cryptocurrency trading platforms DEX :
In this type of platform there is no broker, only traders exchange tokens with each other, and conversion fees are high compared to centralized platforms.
the most popular cryptocurrency trading platforms in the world are: Binance and eToro...
Digital Wallets
What is a Digital Wallet ?
A digital wallet is a tool that can be used to interact with the blockchain network, and digital wallets are an integral part of the use of digital currencies, as they are one of the basics that allow sending and receiving money through blockchain networks.
How digital currency wallets work ?
Cryptocurrency wallets provide the tools and information needed to send and receive digital currencies through transactions on the blockchain, and include a digital address that serves as a specific location on the blockchain to which the coins can be sent, so that the address can be accessed via the private key, regardless of the type of wallet.
Types of digital wallets
There are several types of digital wallets and each type has its advantages and disadvantages, so it is necessary to understand how they work before transferring funds to them
👉 Hot wallets and Cold wallets
a hot wallet is any wallet that is connected to the internet in one way or another.
cold wallets are the opposite of hot wallets as they use physical technology to store keys offline which makes them less vulnerable to online hacking.
Binance's decentralized platform keeps only a small percentage of cryptocurrencies in hot wallets, while the rest are kept in cold wallets as a way to protect users ' money.
👉 Software portfolios
Most types of software wallets are connected to the internet (hot wallets), including :
👉 Web wallets
Web wallets are used to access the blockchain through the browser interface without having to download or install anything.
👉 Desktop wallets
A desktop wallet is a program downloaded and installed on a computer, these wallets give complete control over keys and money unlike some web-based versions.
👉 Mobile wallets
These wallets work just like desktop wallets except they are specifically designed for smartphone applications. These applications are convenient and easy to use because they allow sending and receiving digital currencies through the use of T-codes.
👉 Hardware wallets
Physical electronic devices are more secure because they operate by means of a random number generator to generate public and private keys. It is then stored in the same device and is offline like (cool wallet).
👉 Paper wallets
A paper wallet is a paper on which the digital address and its key are printed in the form of symbols.
The disadvantage of paper wallets is that they are not suitable for sending money in part but only their entire balance can be sent in one go.
It is important to back up cryptocurrency wallets regularly, as losing access to them is out of the question and very expensive.
If you are a beginner and your knowledge balance in the field is still modest, we advise you to invest in time first and develop your skills in the field before taking the decision to invest money, and do not forget an important rule in the field of digital currencies known by professionals in all means and social media channels of the field and do not invest what you can not lose.
👉 Criteria that we recommend to use in research:
- always create a file specific to the currency project in which you intend to invest.
- Know the start date of the coin project.
- follow the currency roadmap continuously and regularly.
- track the currency community and the extent of its activity in various social media and sites and forums, including: Twitter, Telegram, Discord, Reddit, bitcoin Tolk, Medium, Facebook, Instagram, TikTok ...
- Track and monitor currency entry for new platforms and wallets.
- monitor the overall and daily currency trading volume in the platforms..
- track the most important currency stores by tracking their portfolios if possible.
👉 Investment tips
- always do not put your eggs in one basket.
- don't invest in just one platform.
- don't invest and store your coins in just one wallet.
- always try to avoid third-party wallets that you cannot -control and your funds, (no safe investment).
- Two important rules in storage and circulation: do not rush, do not covet.
dear novice and professional, "do not put all your hopes on a currency project" and do not rely on passion in trading, invest in your self-development through continuous self-formation, continuous learning, sharing information and do not forget the rule buy from the bottom and sell above.
