What are the differences between a bitcoin wallet and a bitcoin exchange?
In terms of market cap and trading volume, bitcoin is the leading cryptocurrency of all time. All the more, bitcoin is the first-ever virtual asset to touch a market cap of $1 trillion in just 11 years. Even the leading renowned multinational companies like Google, Microsoft, and Apple consumed almost two decades to touch the $1 trillion market cap milestone. Satoshi Nakamoto is the inventor of bitcoin.
If the rumor is true, Satoshi Nakamoto is one of the wealthiest people in the world. Therefore, the bitcoin wallet and bitcoin exchange are correspondingly the decisive aspects of the bitcoin complex.
Many people consider the bitcoin wallet and bitcoin exchange as the same platform. In addition, there are websites like ethereum-code.me that can help you get good results in trading. However, there are tons of differences between an exchange and a wallet. Below are some of the prominent differences between the bitcoin wallet and the bitcoin exchange.
Basics of a bitcoin exchange!
As mentioned ahead, both bitcoin exchange and bitcoin wallets are exceedingly different from each other. Bitcoin exchange is the platform that allows you to buy, sell and trade your bitcoin units with other currencies. All the more, you can convert your bitcoin units into your desired fiat currencies. There are two types of exchange; foremost is decentralized bitcoin exchange, and the second is centralized bitcoin exchange.
Decentralized bitcoin exchange underlies the technology of a peer-to-peer network and a blockchain. In contrast, the centralized exchange contains some centric parties which are responsible for controlling the entire system.
Not only bitcoin exchange, but bitcoin ATMs also allow you to buy and sell bitcoin units. El Salvador is the first-ever country to adopt bitcoin as a legal tender, and there are more than 100 Bitcoin ATMs in the country. Thus, Bitcoin exchange acts as an intermediary between buyer and seller of bitcoin units.
If there were no bitcoin exchange, you would have to look for people willing to buy or sell bitcoin units. Bitcoin mining correspondingly assists you in acquiring the hold of bitcoin units. However, acquiring the hold of bitcoin with the help of a trustable exchange is much more convenient and straightforward.
The bitcoin wallet is a bit different than the exchange. Undeniably both bitcoin exchange and bitcoin wallets play an exceedingly important role in the bitcoin complex. However, the bitcoin wallet allows you to store your bitcoin units safely.
You are familiar with the fact that bitcoin is devoid of a physical sense, and you cannot possibly store it physically in a safe vault or physical wallet. However, a bitcoin wallet is analogous to a physical wallet. In a physical wallet, you safely store your fiat currencies, whereas, in a bitcoin wallet, you store your bitcoin.
All the more, bitcoin wallets are assuring you the mere private identity of the bitcoin complex. On the other hand, a wallet address is the only public identity of the bitcoin complex. So in case you want to process the transaction in the form of bitcoin, you need the wallet address of a sender and nothing else. Moreover, blockchain also stores only wallet addresses as a mere public identity.
To punch transactions using a bitcoin wallet, you need to insert a secret code or private key for authorizing the transactions. These private keys are like the secret identity of the bitcoin complex. Every bitcoin wallet address has a different private key.
If you lose your private key, you will not be able to access the bitcoin stack in your bitcoin wallet ever again. There are two types of bitcoin wallets; the foremost is hot bitcoin, and the second is a cold bitcoin wallet.
Quick differences between bitcoin wallet and bitcoin exchange
The bitcoin wallet is the place to buy, sell, trade, and exchange bitcoins with fiat currencies. On the other hand, the bitcoin wallet allows you to send, receive and hold bitcoin wallets; all the more advanced bitcoin wallets allow you to trade bitcoin units. Bitcoin exchange correspondingly allows you to store your bitcoin stack in a hot bitcoin wallet.
These are some of the differences between a bitcoin wallet and a bitcoin exchange.