Managing crypto assets is done with a wallet or exchange. Wallets are the address and key to holding, sending, and receiving cryptocurrency. Exchanges are the forums to buy and sell crypto.
Crypto wallets do not act the same as real life wallets.
They are a tag or mailing address attached to transactions. A transaction can give a wallet a balance after receiving crypto. But coins are never separated and put INTO your wallet.
A public key will find all the records of assets. When sending crypto somewhere else, it is as if those coins changed their mailing address. A coin’s home address is always on the blockchain, but they are accessible by communicating with different IDs or tags.
There are two types of crypto wallet IDs, a public key and a private key.
The public key is like a mailing address,
ok to distribute to people who need to know it.
A private key is the key to the mailbox,
anyone with it can take whatever is inside.
Hot wallets provide online access to the private key,
either as a hash or a 12+ word secret phrase.
Cold wallets, like hardware USB sticks,
take that private key and store it offline.
Custodial wallets manage your keys for you,
while you manage them in non-custodial wallets.
The public key is different for each coin, but there’s typically only one private key for the whole wallet.
Wallets worth investigating;
Crypto exchanges are different from crypto wallets.
Exchanges like Coinbase, Binance, Kraken, Gemini, Crypto.com, etc., are similar to stock exchange portals like Forex, Robinhood, ETrade, Webull, etc, and act similarly to a bank – without any FDIC backing.
Placing coins in an exchange allows control over their movement.
It is necessary to use an exchange to transfer crypto to a bank when converting it back into US dollars, Peruvian soles, Swiss francs, etc. They act as portals from the crypto sphere to the fiat currency world.
Some wallets allow sending and receiving coins. Others are combined with exchanges, allowing buying, selling, and trading.
Each exchange offers its own pros and cons, and only you can choose the right forum to manage your crypto. Not all exchanges are permitted in the US, so it is very important to ensure the version being used is compatible with KYC requirements.
Know Your Customer (KYC) requirements are designed to fight money laundering, and mandate the financial institution to verify identity and eligibility to use the platform.
Popular exchanges listed by trade volume as of July 2022;
- Binance – US version not available in all states
- FTX – separate US platform
- Coinbase
- Kraken – not available in WA or NY
- KuCoin – not licensed in the US
- Gate.io – March 2022 no longer serving the US and Canada
- Bitfinex – not licensed in the US
- Huobi Global – separate US platform
- Gemini
- Bitstamp
- bitFlyer
- CoinCheck – not licensed in the US
- Poloniex – not licensed in the US
- Crypto.com