What is a cryptocurrency?
A cryptocurrency is a virtual currency encrypted in blockchain technology which can be used to pay for articles or services. The first was Bitcoin, developed in 2009 by an anonymous user Satoshi Nakamoto. Since then, a series of cryptocurrencies with specific characteristics have emerged that make them unique in their style.
One of the main characteristics of most cryptocurrencies is that they are decentralized, which means that they are not issued or regulated by any bank or state entity. However, there are currently governments that have developed their own centralized cryptocurrencies backed by the natural resources of their country. This does not mean that it ceases to be a cryptocurrency because the term basically refers to being a virtual currency encrypted and registered in a chain of cryptographic blocks.
Differences between wallet and Exchange
A wallet and an exchange are platforms that allow us to store cryptocurrencies, as well as send and receive them. But, although they appear to be the same, there are some differences between one and the other.
The main difference lies in the functions of one platform and another. A wallet is software that allows us to save, send and receive cryptocurrencies freely, while an exchange is a platform in which we can exchange cryptocurrencies and fiat currencies with the intention of making money with the rise or fall of a particular currency.
Another notable difference between a wallet and an exchanger are the private keys. A private key is a code that allows us to access our wallet from anywhere in the world with an internet connection. The wallets provide us with a private key in addition to the public key to which we request that the cryptocurrencies be sent. The exchangers do not do it; instead they allow us to create a username and password so that we can access the platform and use our funds. This means that if the exchanger goes bankrupt there is no possibility of recovering the funds because they have never been ours.
Finally, there is the issue of commissions. The wallet applies a mining feed for carrying out the transaction and an extra if we wish to send cryptocurrencies to a portfolio made by another developer. For its part, the exchanger applies all these commissions to take our money and an additional when we perform trading for the service.