Exchange or wallet? That is the question
The question about where it’s better to store cryptocurrency is one of the most important questions. Some people prefer to use an anonymous wallet while some people find it difficult to install wallet and keep the private key. Tastes differ. However, we should know all the features of both exchanges and wallets to make a right choice.
Speaking of exchanges, the main their feature is that you can trade currency here very effectively if you are interested in such option. Generally, exchange is like a bank where you can trade your cryptocurrency and withdraw fiat currency. Roughly speaking you have not your private account working with exchanges but let exchanges to have your account. But how about anonymity then? Exchanges can be hacked very often.
Types of wallets
We can divide them on hosted and client-side wallets. Hosted wallets are like checking accounts. They also work using servers that makes them vulnerable to hackers. Client-side wallets generate a private key for you and only you can have it.
Next types of wallets are hardware and software wallets. Hardware wallets are absolutely private and secure but it’s rather inconvenient to use them for everyday transactions. Let’s move to software wallets. Here you keep your private key by yourself and no one can be access to it. The main advice is not to keep it online. It’s better to write it down like you are at school writing your classwork. You can store, receive and transfer money in your wallet. To sum it up, software client-side wallets gives you an opportunity to be sure in security and anonymity of your account.
Convenience or safety?
Sometimes people consider that the best way is to store coin and tokens in one exchange because it’s more convenient. Of course, this way can be easier but not secure. The fact is that exchanges are hacked very often. You can find lots of such examples in the Internet. This point makes people to change their minds about storing their funds on exchanges.
That is why the best and reliable option will be the storage of funds in a wallet, especially client-side one. You may need to keep only a small part of your savings on the exchange. Even if you set a goal to trade on the exchange, it is better to do it on two or three exchanges. In this case, the risk of losing all your savings decreases.
For today there are some wallets, which provide an opportunity both for storing tokens and coins and their trading on the exchange. For example, Lumi is available on iOS and soon it is going to launch an in-app exchange option. The storage of funds in such wallets is more reliable and convenient.
The choice is yours! Wish you good luck!