wallet versus exchange

Anton asked 6 months ago

good day. thanks for video. in short what is difference between a bitcoin exchange and your wallet. does your bitcoin also grow in a wallet ,do you need a wallet? as i understand from people if you use Luno you deposit money from your bank into their account and then you buy bitcoin, and there it goes up and down according to the markets.Where does the wallet come in

2 Answers
Zsofia Elek answered 6 months ago

Hi Anton, 
This is a good question as you store your Bitcoin on an exchange in a wallet as well. The difference is lying in the different types of wallets. Exchanges are considered hot wallets, which means that your coins are online, while there are cold wallet options for offline solutions. But in both cases, you store bitcoins, which value changes from time to time as per the market demand and supply. You can read more about the different wallet types in this article.

Ofir Beigel answered 6 months ago

Anton, just want to make something clear – you don’t “grow” your Bitcoins on an exchange. 1 Bitcoin = 1 Bitcoin. What changes is the exchange rate of the Bitcoin vs. the Dollar, but that’s going to happen whether your coins are on the exchange wallet or on your own wallet.