Where and how to store crypto: wallet or exchange?

Saving cryptocurrency is very similar to storing cash: careless behavior can lead to disastrous results. But how to choose the right solution that will ensure security and at the same time be convenient to use? Where is it safer to store your digital assets: in a wallet or on an exchange ? This is the question everyone who has decided to invest in cryptocurrency asks themselves. It's time to understand the features of each option and understand which one is best for you.

Content:

• Why It's Important to Understand Safe Crypto Storage
• Methods of storing cryptocurrency
  1. Mobile wallets
     • Trust wallet
     • Zengo
     • MetaMask
     • Atomic Wallet
     • Pros and cons of wallets
  2. Cryptocurrency exchange
     • Storage on Binance
     • Staking on Binance
     • Pros and cons of exchanges
  3. Hardware wallets
     • Ledger Nano S
     • Trezor
     • Pros and Cons of Hardware Wallets
• Comparison of wallets and exchanges
• Recommendations for storing cryptocurrencies
• Conclusion

Why It's Important to Understand Safe Crypto Storage

Before buying their first cryptocurrency, beginners should definitely understand how to store it. This is necessary because, unlike regular money, cryptocurrency does not have a physical medium, which means that special attention should be paid to saving private keys, without which you can permanently lose access to your funds. Unfortunately, the high profitability of the cryptocurrency market attracts not only honest investors, but also scammers. Almost every day, cybercriminals invent new methods and techniques for stealing digital money. Knowing and applying in practice methods of their safe storage will help protect against hacking, phishing attacks and other threats.

Methods of storing cryptocurrency

Cryptocurrencies are rapidly gaining popularity among people interested in new ways of investing and earning. And the first problem they face is storing digital assets. What is better: a wallet or an exchange? Let's figure it out.

Mobile wallets

Full control over your funds, anonymity and freedom from government control – this is what made mobile wallets very popular. Such a wallet is always at hand on a smartphone or tablet. Private keys, which the user personally manages, are responsible for security. Mobile wallets come in different types, and in our review we will analyze the four most popular ones, indicating the advantages and disadvantages of each.

Trust wallet

Today, one of the most popular wallets is Trust Wallet . It is an open-source, multi-currency crypto wallet that can be installed as a mobile app on a smartphone or as an extension for a web browser.

According to the developers, Trust Wallet does not contain personal data of users, and all information about cryptocurrency transactions is stored on the devices of those who are directly involved in them. At the same time, third parties do not have access to it.

Trust Wallet started functioning in 2017, and in 2018 it was bought by the cryptocurrency exchange Binance , which did not affect its operation in any way. It remained a decentralized application, despite the fact that its new owner was a centralized exchange.

Trust Wallet lets you buy over 60 cryptocurrencies with fiat money using a debit or credit card. However, we recommend buying cryptocurrencies directly from exchanges to reduce fees.

In addition, the wallet has a staking function, which allows the user to place their temporarily free funds at interest. Other ways of receiving passive income are also available, including blocking digital assets in the Stargaze (STARS) and KAVA blockchains.

Which one to choose depends on your goals: if you need maximum profitability, choose STARS; if you want to diversify your investment portfolio, consider KAVA. However, do not forget about the risks, as staking is not a risk-free investment. We recommend choosing only reliable validators that check transactions and regularly withdraw your commission rewards.

Trust Wallet also allows you to exchange cryptocurrencies through a built-in decentralized exchange (DEX), store stablecoins, and manage NFTs – unique digital assets that exist on the blockchain.

Trust Wallet charges fees for:

• Storing cryptocurrencies
• Receiving tokens
• NFT
• Making transactions – Network fees + Swap fees. Network fees depend on network load, transaction size and speed, and Swap fees are usually 0.1% of the exchange amount, but may vary depending on the tokens and liquidity provider.

Swap tokens inside the wallet - no fees.

Zengo

The next most popular mobile wallet is Zengo . It is very easy to use and allows you to store, buy, sell and exchange not only cryptocurrencies but also NFTs.

Here are some of its features:

• The ability to store information without keys - thanks to MPC technology, data is stored securely not due to some very complex key, but due to the fact that this private key is not stored entirely on your device or on the wallet's servers. Instead, it is divided into several parts, each of which is stored on a separate server. And now, to perform any operation, all these servers must sign it with their part of the key. Only if this "puzzle" completely matches into one whole, is it possible to perform it.
• Biometric authentication – to enter your wallet, you need to place your finger on the reader on your smartphone or verify yourself via Face ID by taking a selfie of your face.
• Restoring access – Zengo has a so-called “social recovery” feature, which allows you to regain access to your wallet with the help of trusted friends. When creating a wallet, you will need to select several trusted people and give each of them their “recovery phrase” – a specific set of words that you can use in the future to restore access. It is very important to keep this phrase in a safe place and not disclose it to anyone. In case of loss of your smartphone, contact the selected friends and provide them with this phrase. With its help, they will be able to restore your access to the wallet. In this case, you yourself determine how many friends you need to restore it (usually from 3 to 5 people). Keep in mind that the more people involved, the higher your security. Choose only those you completely trust and do not share the recovery phrase with anyone else.
• Buying cryptocurrency – digital assets can be purchased not only for fiat money (USD, EUR, GBP, etc.), but also using credit or debit cards, as well as through the Apple Pay and Google Pay payment services.
• Cryptocurrency exchange – you can exchange one token for another without leaving the application.
• NFT support – you can store, view and trade NFTs.
• DeFi Integration – Zengo allows you to connect to decentralized applications (dApps) and participate in DeFi protocols.
• Simple Interface – Zengo wallet is easy to use thanks to its simple interface that even a novice user can understand.

The Zengo mobile wallet supports over 200 cryptocurrencies. This includes Bitcoin , Ethereum , Litecoin , Solana, and many others. The wallet is available on iOS and Android.

Zengo wallet fees are:

• Buy cryptocurrency: from 3.99% + network fee
• Cryptocurrency exchange: from 0.1%
• Withdrawal: depends on the network.

MetaMask

Another popular cryptocurrency wallet is MetaMask. It is loved by users for its versatility and convenience, as well as the ability to carry out any operations with digital assets, including receiving, storing or exchanging them. There is not only a desktop version in the form of a browser extension, but also a mobile application for a smartphone or tablet.

Here are some of its benefits that users point out:

• Simple interface – the wallet has a simple interface that even a novice user can understand.
• Security – in the MetaMask wallet, users themselves store their own private keys. This type of wallet is called non-custodial.
• Versatility – The wallet can interact with a wide range of digital assets and applications, such as the Uniswap exchange, the OpenSea NFT marketplace, and the Aave lending protocol.
• DeFi Integration – MetaMask supports various DeFi services, including MakerDAO, Compound, and others.
• ERC-20 support – this wallet can work with a large number of ERC-20 cryptocurrencies: ETH (Ethereum), DAI, USDC, USDT and others. To find out if MetaMask supports a specific token of this format, you can try adding it to your wallet. If it is supported, it will appear in your list of available assets.
• Compatible with hardware wallets – you can connect to a hardware wallet to increase the security of your funds, while retaining all the features of MetaMask.

MetaMask fees:

Unlike other wallets, MetaMask does not charge for storing your digital assets. However, you will have to pay for sending, exchanging, and purchasing tokens. In general, the fee depends on the network load and the speed of an individual transaction, the exchange rate, and the liquidity of the tokens. The choice of payment method will also have an impact.

Real ways to reduce fees:

• Polygon and Binance Smart Chain networks will help reduce fees for token exchange transactions.
• The faster the transaction is processed, the higher the commission fees. Therefore, do not increase the processing speed unnecessarily.
• Do not exchange low liquidity tokens.
• Use exchanges with minimal fees to exchange cryptocurrencies.

Overall, MetaMask is a good choice for those looking to get started with Web3, a decentralized and more open version of the internet powered by blockchain, cryptocurrency, and non-fungible tokens (NFTs), where users have much more control over their data. The wallet is available as an extension for Chrome, Firefox, Brave web browsers, and as a mobile app for iOS and Android operating systems.

Atomic Wallet

Finally, we will look at the multi-currency wallet Atomic Wallet , which, thanks to the built-in exchange, allows you to buy digital assets for regular money. It can also be used to store, manage and exchange cryptocurrency. However, keep in mind that you cannot anonymously buy crypto for fiat money. In addition, Atomic Wallet is not compatible with any hardware wallet, which automatically makes it an unsuitable choice for those who seek maximum security for their own funds.

Key Features of Atomic Wallet:

• Supports over 300 cryptocurrencies, including popular ones such as Bitcoin, Ethereum, Litecoin and tokens of various standards (ERC-20, BEP-20 and others).
• Encrypts and stores private keys on your mobile device, not on our own servers, giving you complete control over your assets.
• The ChangeNOW service allows you to exchange cryptocurrency directly in the application without the need to transfer funds to third-party exchanges.
• Using a bank card, you can buy cryptocurrency for regular money (USD, EUR, etc.)
• The wallet supports staking, which allows you to receive passive income.
• For using the built-in exchange and purchasing cryptocurrency with fiat money, AWC token holders will receive cashback.
• Atomic Wallet has a simple and clear interface that will appeal to most users.

Disadvantages that are also worth paying attention to:

• There are fees for exchanging cryptocurrencies and purchasing with fiat.
• Atomic Wallet is considered secure due to its data storage principle, but users will have to take care of the security of their devices and backups themselves.
• Atomic Wallet's customer support is not as responsive as that of major exchanges.

Atomic Wallet supports:

1. More than 500 cryptocurrencies , including such popular coins as Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Ripple , Dogecoin, Cardano, Solana, Polkadot, Shiba Inu.
2. ERC-20 tokens: Uniswap, Chainlink, AAVE, SushiSwap, Maker, Yearn Finance, Compound, Basic Attention Token (BAT), The Graph (GRT), Theta Network (THETA).
3. BEP-20 tokens: Binance Coin (BNB), Binance USD (BUSD), CAKE, PancakeSwap (CAKE), ApeCoin (APE), TerraUSD (UST), Axie Infinity (AXS), THORChain (RUNE).
4. Stablecoins: Tether (USDT), USD Coin (USDC), Dai, TerraUSD (UST), Pax Dollar (USDP), TrueUSD (TUSD) and many others.

Atomic Wallet Fees:

• The blockchain network charges a fee for processing transactions. However, Atomic Wallet does not control them, and they can change depending on the network load and other factors.
• The exchange fee is 2%, with a minimum commission of $10.
• Fees when purchasing cryptocurrency with fiat: When using a bank card, a fee of 2.5% to 3.5% is charged, depending on the coin, the purchase price, and the payment method.

Here are some examples:

Here are some more examples of how Atomic Wallet fees are calculated:

• Send Bitcoin: Network fee + 2% (minimum $10)
• Ethereum to Litecoin Exchange: 2% of the exchange amount (minimum 10 USD)
• Buy Bitcoin for USD: 3% of the purchase amount + network fee

Please note that Atomic Wallet fees may be higher than other wallets. For example, MetaMask does not charge a fee for exchanging cryptocurrency, while Trust Wallet only charges network fees. However, Atomic Wallet offers a loyalty program that allows you to earn AWC tokens and receive discounts on fees. You will see the exact amount before making a transaction.

Atomic Wallet is available as desktop applications for Windows, macOS, and Linux operating systems, as well as a mobile application for iOS and Android. Please note that not all of the listed cryptocurrencies are available on all platforms at the same time. For example, some of them may only be available in the desktop version of Atomic Wallet, while others may only be available on mobile devices. The list of supported cryptocurrencies is constantly updated. Up-to-date information about changes can be found on the official website of the wallet.

Pros and cons of wallets

In general, Trust Wallet and MetaMask are more popular among users. This is due to the wide selection of various tools and support for cryptocurrencies of different standards. In turn, Zengo, due to its simple interface and security features, is perfect for beginners. Experienced users are advised to pay attention to Atomic Wallet. Its wide range of available digital assets will surely not leave indifferent even the most demanding crypto enthusiast.

So which wallet should you choose? The answer to this question will largely depend on the individual needs and preferences of the user.

For your convenience, we have prepared a table with the advantages and disadvantages of the cryptocurrency wallets reviewed.

Cryptocurrency exchange

If you need to buy, sell or exchange cryptocurrency, the best place to do it is on a cryptocurrency exchange. It is an online platform that is very similar in functionality to a regular stock exchange, but instead of shares or bonds, it trades digital assets such as Bitcoin, Ethereum, Litecoin and many others.

In addition to trading, the exchange is often used to store crypto assets. Let's note right away that this is not the best option, but it definitely has its advantages, as well as disadvantages, which we will discuss below.

Storage on Binance

Let's look at the advantages of storing cryptocurrencies using the example of the most popular platform - Binance. Due to its convenience, most users choose this exchange to store their cryptocurrency savings. You will not need to download additional software or take care of the security of your private keys yourself - the exchange will do all this for you.

Binance is a place where a huge number of sellers and buyers meet each other. Therefore, here you can easily buy or sell cryptocurrency. In addition, here you can easily exchange your crypto for regular money.

The likelihood of hacking user accounts is minimized by using two-factor authentication, which reliably protects their funds. In addition, the exchange regularly updates its software and implements modern security technologies. For example, customer funds are stored in cold wallets.

Staking, lending, and loyalty programs offer Binance users additional opportunities to earn money beyond the traditional buying and selling of cryptocurrencies.

Staking on Binance

Did you know that you can earn passive income by storing funds on an exchange account? On the Binance platform, you have the opportunity to temporarily block free funds for a certain period and receive a reward in the form of interest on the invested capital. This procedure is called staking. Want to know how it works?

First of all, you need to choose a coin for staking. There are many cryptocurrencies on the Binance exchange with an annual percentage rate (APY), which you can earn by participating in certain financial transactions. Then we choose a staking pool, for example, BNB with an APY rate of 20% per annum.

When choosing a pool, pay attention not only to the minimum deposit and fees, but also to the asset locking period and its reputation. After you stake a coin, you will automatically receive rewards to your Binance account on a fully automated basis. At the same time, do not forget about the risks, take security measures.

Binance Staking Tips:

• Choose well-known and reliable coins
• Use information only from official sources of the Binance exchange
• Create a portfolio of multiple assets

Pros and cons of exchanges

For beginners, it is easiest to store their funds directly on the exchange. This method has many obvious advantages. First of all, this concerns a large selection of digital assets, which allows you to quite easily diversify your own investment portfolio. At any time, they can be sold or, conversely, bought thanks to the high liquidity of the exchange.

At the same time, your funds will be relatively safe, given the measures they take to protect their clients' funds. In addition, exchanges allow you to earn on price reductions through margin trading and receive passive income from staking or lending to other users.

But not everything is as rosy as it may seem at first glance. There are obvious downsides. Exchanges charge commissions, which potentially reduces your income. Also, do not forget that despite all the security measures, they are periodically hacked by hackers.

Below is a table with brief characteristics of the three most popular cryptocurrency exchanges.

Before deciding which exchange to store your crypto savings on, pay attention to what fiat currencies it supports, what deposit and withdrawal methods are available to its clients, what fees it charges and, of course, how quickly it processes transactions.

If you value access to a large number of fiat currencies and low fees, consider Binance. If you are looking for a simple interface and a good reputation, consider Coinbase. However, keep in mind that its fees are higher than Binance’s.

If your goal is maximum security of funds, we recommend Kraken. But be warned: for beginners, it will be difficult to navigate its interface, and the fees may seem excessive.

Hardware wallets

If you need to store your private keys securely, consider hardware crypto wallets. They are resistant to hacker attacks because they store your keys offline, preventing scammers from even having a chance to access them over the Internet.

When you create such a wallet, unique private keys are generated on your device, without which access to it is impossible. They are stored in a special secure chip that is not connected to the Internet, which makes them inaccessible to online hackers. To start using such a wallet, you need to connect it to your computer, after which the device will sign the transaction with a private key, ensuring its security.

At the time of writing this review, there are a few popular hardware crypto wallet models that deserve your attention: Ledger Nano S and Trezor.

Ledger Nano S

The French company Ledger has developed a very compact and easy-to-use hardware crypto wallet – Ledger Nano S. Today, it is one of the easiest to use and most affordable wallets of this type on the market.

Ledger Nano S supports over 1,800 cryptocurrencies and tokens, including popular ones like Bitcoin, Ethereum, XRP, Litecoin, Dogecoin, Cardano, and many others. The French Information Security Agency (ANSSI) has certified the chip, which is used to securely protect the user's private keys. Thanks to this chip, the device stores the keys in a special protected environment, inaccessible to online hackers.

Nano S is so simple that even beginners can easily master it. Thanks to its compact form, it can always be carried with you, and it can be controlled using just two buttons and a small screen. This device has an important feature - the "Recovery Phrase" function, which will help you not to lose your funds. In case of loss of the device, this function will help restore access to cryptocurrencies.

Trezor

Finally, let's talk about the famous Czech manufacturer of hardware crypto wallets Trezor. Having started its work in 2013, this company released two models: Trezor One and Trezor Model T. Trezor One is a compact and affordable hardware wallet that quickly gained popularity on the market.

With it, you can store more than 1,600 cryptocurrencies and tokens. Users love it for its simplicity and high level of security. At the same time, Trezor Model T is a more advanced model of this wallet, equipped with a color touch screen and support for Apple's biometric authentication - Touch ID. In addition, it supports a wider range of cryptocurrencies.

This wallet has a higher level of security due to the use of military chips and regular software updates to protect against new threats. The Trezor wallet is easy to use, which is why it is very popular among beginners. It can be controlled using buttons and a screen. It is compact and is currently one of the most affordable hardware wallets on the market.

Pros and Cons of Hardware Wallets

Each device has its advantages and disadvantages, and hardware wallets are no exception. The clear advantages of such devices include resistance to online attacks and theft of funds due to the storage of the user's private keys in a special chip without an Internet connection.

The downside is that they are more expensive than software wallets, and while it is difficult to steal cryptocurrency from such a device online, it can still be accessed through physical contact with the hardware wallet or if it is damaged. Also keep in mind that to use hardware wallets safely, regularly back up your data.

Below is a table with the main features of the two most popular hardware wallets.

Comparison of wallets and exchanges

Today, there are two main services for storing and exchanging cryptocurrencies - a wallet and an exchange. However, it is important to understand the difference between them:

When you just need to send or receive cryptocurrency or store it, we recommend using wallets. Some of them can even be used to generate passive income from staking. However, if your goal is to buy and later resell your digital assets for regular money such as dollars, euros or hryvnia, use exchanges. In addition to the exchange itself, they will help you earn additional profit from exchange rate fluctuations or a favorable P2P exchange rate, margin trading or speculation on futures and options.

Recommendations for storing cryptocurrencies

It is not recommended to keep all your funds on one device. Remember the golden rule of an investor: do not put all your eggs in one basket. Always enable two-factor authentication where possible. Do not forget to constantly update your wallet software and make copies of important data.

Remember: your investments are in your hands. The correct choice of the method of storing your assets will also determine their increase.

Conclusion

Finally, we remind you to be careful with your own funds. Imagine that you have found a treasure. You will not abandon it on the road, but will try to find a suitable storage. The same is true for cryptocurrencies. It is not without reason that the expression that cryptocurrency is digital gold is very popular among crypto enthusiasts. Therefore, attention and caution in relation to it will never be superfluous.

In this review, we looked at different ways to store cryptocurrencies: mobile and hardware wallets, as well as exchanges. We hope that by studying all the pros and cons of each of them, you will be able to make the right choice depending on your needs and preferences.

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