{"id":415683,"date":"2022-03-14T01:00:00","date_gmt":"2022-03-13T22:00:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/whats-the-difference-between-a-bitcoin-wallet-and-an-exchange\/"},"modified":"2022-03-14T01:00:00","modified_gmt":"2022-03-13T22:00:00","slug":"whats-the-difference-between-a-bitcoin-wallet-and-an-exchange","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/whats-the-difference-between-a-bitcoin-wallet-and-an-exchange\/","title":{"rendered":"#What\u2019s the Difference Between a Bitcoin Wallet and an Exchange?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2f07c80f3af\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2f07c80f3af\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/whats-the-difference-between-a-bitcoin-wallet-and-an-exchange\/#%E2%80%9CWhats_the_Difference_Between_a_Bitcoin_Wallet_and_an_Exchange%E2%80%9D\" >&#8220;What\u2019s the Difference Between a Bitcoin Wallet and an Exchange?&#8221;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/whats-the-difference-between-a-bitcoin-wallet-and-an-exchange\/#What_Is_a_Bitcoin_Wallet\" >What Is a Bitcoin Wallet?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/whats-the-difference-between-a-bitcoin-wallet-and-an-exchange\/#What_Is_a_Bitcoin_Exchange\" >What Is a Bitcoin Exchange?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/whats-the-difference-between-a-bitcoin-wallet-and-an-exchange\/#But_Exchanges_Have_Integrated_Wallets_Too\" >But Exchanges Have Integrated Wallets, Too<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/whats-the-difference-between-a-bitcoin-wallet-and-an-exchange\/#The_Exchange_Controls_the_Wallets_Private_Keys\" >The Exchange Controls the Wallet\u2019s Private Keys<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CWhats_the_Difference_Between_a_Bitcoin_Wallet_and_an_Exchange%E2%80%9D\"><\/span>&#8220;What\u2019s the Difference Between a Bitcoin Wallet and an Exchange?&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div>\n<!-- UNCACHED CONTENT --><br \/>\n<img decoding=\"async\" class=\"type:primaryImage alignnone size-full wp-image-347486\" data-pagespeed-lazy-srcset=\"https:\/\/www.howtogeek.com\/wp-content\/uploads\/2018\/03\/img_5abc362ce7021.jpg?width=398&amp;trim=1,1&amp;bg-color=000&amp;pad=1,1 400w, https:\/\/www.howtogeek.com\/wp-content\/uploads\/2018\/03\/img_5abc362ce7021.jpg?width=1198&amp;trim=1,1&amp;bg-color=000&amp;pad=1,1 1200w\" sizes=\"400w, 1200w\" data-pagespeed-lazy-src=\"https:\/\/www.howtogeek.com\/wp-content\/uploads\/2018\/03\/img_5abc362ce7021.jpg?width=1198&amp;trim=1,1&amp;bg-color=000&amp;pad=1,1\" alt=\"\" src=\"\/pagespeed_static\/1.JiBnMqyl6S.gif\" onload=\"pagespeed.lazyLoadImages.loadIfVisibleAndMaybeBeacon(this);\" onerror=\"this.onerror=null;pagespeed.lazyLoadImages.loadIfVisibleAndMaybeBeacon(this);\"\/><\/p>\n<p>A Bitcoin wallet is basically a software program in which you store Bitcoin. An exchange lets you convert \u201creal money\u201d like US dollars to Bitcoin. Exchanges also provide a wallet\u2014but you don\u2019t necessarily have full control of that wallet.<\/p>\n<p>We\u2019re not recommending you invest in Bitcoin. But, if you\u2019re putting money into Bitcoin\u2014or you\u2019re just interested in how it works\u2014you should know this stuff.<\/p>\n<h2 role=\"heading\" aria-level=\"2\"><span class=\"ez-toc-section\" id=\"What_Is_a_Bitcoin_Wallet\"><\/span>What Is a Bitcoin Wallet?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img decoding=\"async\" class=\"alignnone size-full wp-image-347485\" data-pagespeed-lazy-src=\"https:\/\/www.howtogeek.com\/wp-content\/uploads\/2018\/03\/img_5abc355adf5ac.png?trim=1,1&amp;bg-color=000&amp;pad=1,1\" alt=\"\" src=\"\/pagespeed_static\/1.JiBnMqyl6S.gif\" onload=\"pagespeed.lazyLoadImages.loadIfVisibleAndMaybeBeacon(this);\" onerror=\"this.onerror=null;pagespeed.lazyLoadImages.loadIfVisibleAndMaybeBeacon(this);\"\/><\/p>\n<p>So, we mentioned before that a Bitcoin wallet is a software program in which you store Bitcoin. While true, it\u2019s drastic oversimplification. Bitcoins are never really \u201cstored\u201d anywhere. To understand what a Bitcoin wallet is, it\u2019s important to understand what Bitcoin is and how it works.<\/p>\n<p><strong>RELATED:<\/strong> <strong><em>What Is Bitcoin, and How Does it Work?<\/em><\/strong><\/p>\n<p>A Bitcoin wallet actually contains one or more private keys that allow you to sign transactions. These private keys are the mathematical proof that you indeed own a certain amount of Bitcoin. Think of these private keys as secret codes that allow you to spend that Bitcoin. The blockchain is a record of all these transactions.<\/p>\n<p>These private keys are very important. If someone steals your private keys\u2014say, if they had malware running on your computer\u2014they could spend your Bitcoin. For example, they could use your private keys to send your Bitcoin to their own Bitcoin address. Your Bitcoin would then be stored in their wallet and would be secured by their own private keys, to which you wouldn\u2019t have access. That\u2019s why it\u2019s very important to store your Bitcoin wallet and its private keys securely.<\/p>\n<p>Attackers aren\u2019t the only concern. If you lose the wallet and your private keys, you\u2019ll also lose access to all your Bitcoin. That\u2019s why it\u2019s important to have backup copies of your Bitcoin wallet, too\u2014just like you\u2019d have backup copies of any important data.<\/p>\n<p>If Bitcoin was being widely used for payments, a Bitcoin wallet is the program you\u2019d use to send and receive Bitcoin for day-to-day transactions, too. You might want to store only a small amount of Bitcoin in a wallet you carry with you\u2014for example, on your phone\u2014and leave a larger amount of Bitcoin in a more secure location, similar to how you don\u2019t carry your life savings in cash in your physical wallet. There are some websites that <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cloudsavvyit.com\/11324\/how-to-accept-bitcoin-or-cryptocurrency-payments-on-your-website\/\">accept cryptocurrency payments<\/a>, however, Bitcoin is largely being used for speculative investing at the moment.<\/p>\n<p>In addition to typical software Bitcoin wallets you might run on a PC or phone, there are hardware-based Bitcoin wallets like the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/trezor.io\/\">TREZOR<\/a>. You could also use a paper Bitcoin wallet, which has a public Bitcoin address and private key printed on it. This is effectively an offline Bitcoin wallet, and you could store it in a safe or other secure location without worrying that it could be compromised by malware running on your PC. Of course, anyone who acquired the piece of paper would have the ability to spend your Bitcoin.<\/p>\n<p><strong>RELATED:<\/strong> <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cloudsavvyit.com\/11324\/how-to-accept-bitcoin-or-cryptocurrency-payments-on-your-website\/\"><strong><em>How to Accept Bitcoin or Cryptocurrency Payments on Your Website<\/em><\/strong><\/a><\/p>\n<h2 role=\"heading\" aria-level=\"2\"><span class=\"ez-toc-section\" id=\"What_Is_a_Bitcoin_Exchange\"><\/span>What Is a Bitcoin Exchange?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-347484\" data-pagespeed-lazy-src=\"https:\/\/www.howtogeek.com\/wp-content\/uploads\/2018\/03\/img_5abc34a7320da.png?trim=1,1&amp;bg-color=000&amp;pad=1,1\" alt=\"\" width=\"650\" height=\"334\" src=\"\/pagespeed_static\/1.JiBnMqyl6S.gif\" onload=\"pagespeed.lazyLoadImages.loadIfVisibleAndMaybeBeacon(this);\" onerror=\"this.onerror=null;pagespeed.lazyLoadImages.loadIfVisibleAndMaybeBeacon(this);\"\/><\/p>\n<p>A Bitcoin exchange is a website or service that lets you convert \u201cfiat currency\u201d like US dollars and Euros to Bitcoin. These websites also let you convert that Bitcoin back to US dollars or your fiat currency of choice. In other words, exchanges buy and sell Bitcoin at the current market rate.<\/p>\n<p>If exchanges didn\u2019t exist and you wanted to buy Bitcoin with US dollars, you\u2019d have to find someone with Bitcoin, agree on an exchange rate, pay them, and then have them send that Bitcoin to your wallet. And, to sell Bitcoin, you\u2019d have to find someone who wanted to purchase it from you. Exchanges simplify this process, providing a single place you can purchase or sell Bitcoin at the current market rate using your bank account.<\/p>\n<h2 role=\"heading\" aria-level=\"2\"><span class=\"ez-toc-section\" id=\"But_Exchanges_Have_Integrated_Wallets_Too\"><\/span>But Exchanges Have Integrated Wallets, Too<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img decoding=\"async\" class=\"alignnone size-full wp-image-347483\" data-pagespeed-lazy-src=\"https:\/\/www.howtogeek.com\/wp-content\/uploads\/2018\/03\/img_5abc344de700a.png?trim=1,1&amp;bg-color=000&amp;pad=1,1\" alt=\"\" src=\"\/pagespeed_static\/1.JiBnMqyl6S.gif\" onload=\"pagespeed.lazyLoadImages.loadIfVisibleAndMaybeBeacon(this);\" onerror=\"this.onerror=null;pagespeed.lazyLoadImages.loadIfVisibleAndMaybeBeacon(this);\"\/><\/p>\n<p>Exchanges like <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/redirect.viglink.com\/?key=204a528a336ede4177fff0d84a044482&amp;u=https%3A%2F%2Fwww.coinbase.com%2F\">Coinbase<\/a>, which we think is the best choice if you\u2019re looking to buy Bitcoin, provide you with a Bitcoin wallet hosted by that website. Think of this as a sort of web-based Bitcoin wallet.<\/p>\n<p><strong>RELATED:<\/strong> <strong><em>How to Buy Bitcoin the Easy Way<\/em><\/strong><\/p>\n<p>So, when you head to Coinbase, create an account, and buy some Bitcoin, that Bitcoin isn\u2019t im<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>tely sent to a Bitcoin wallet address you provide. Instead, it\u2019s stored in a wallet in your Coinbase account. You can sign into the Coinbase <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a> or website, view your balance, and sell the Bitcoin if you want. Coinbase does allow you to transfer the Bitcoin from the Coinbase exchange to another Bitcoin wallet, if you like, but you have to go out of your way to do that.<\/p>\n<p>This dramatically simplifies the process of buying Bitcoin. You don\u2019t need to install and manage a Bitcoin wallet program. You don\u2019t have to back up your wallet. You don\u2019t have to worry about losing your Bitcoin if you forget your wallet\u2019s password or lose all copies of the wallet files. Instead, you just create an account, and then you can access your Bitcoin by signing into that account. If you forget your account\u2019s password, you can go through an account recovery process.<\/p>\n<p>In this situation, the exchange sort of functions like a bank. When you store your Bitcoin with Coinbase, Coinbase holds onto your Bitcoin for you and gives you access to it. But the Bitcoin is under their control, and not yours. And, while banks are heavily regulated in the US and other countries, it\u2019s important to remember that Bitcoin exchanges are not subject to all the same regulations.<\/p>\n<h2 role=\"heading\" aria-level=\"2\"><span class=\"ez-toc-section\" id=\"The_Exchange_Controls_the_Wallets_Private_Keys\"><\/span>The Exchange Controls the Wallet\u2019s Private Keys<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Here\u2019s the big concern: When you store your Bitcoin in a wallet controlled by an exchange, like Coinbase, that exchange actually holds the private keys. In other words, it\u2019s sort of like the exchange storing your Bitcoin in their own wallet and giving you access via an account. You don\u2019t actually have the Bitcoin in your own wallet that you fully control, as you would with a traditional Bitcoin wallet.<\/p>\n<p>You\u2019re placing a lot of trust in the exchange if you store your Bitcoin there. For example, you could lose your Bitcoin if the exchange were hacked, a rogue employee stole your private keys, or if the owners of the exchange took the money and ran. That\u2019s one reason we recommend Coinbase, which is a bigger company with a decent track record that\u2019s based in the USA, over smaller exchanges that may not be as trustworthy.<\/p>\n<p>The design of web-based Bitcoin wallets that function like banks is actually counter to some of Bitcoin\u2019s original intent. Bitcoin promises a totally decentralized system that allows you to store your own money without trusting anyone else. And you can\u2014if you store it in your own wallet. If you store it with an exchange, you\u2019re relying on that exchange like you\u2019d rely on a bank.<\/p>\n<p>Of course, there are trade-offs. When you rely on an exchange, you have a more convenient experience. You don\u2019t have worry about securing, backing up, or otherwise managing your own Bitcoin wallet. The exchange\u2019s website will be more secure than many people\u2019s computers.<\/p>\n<p>Should you hold your Bitcoin in a web-based wallet provided by in an exchange, or your own Bitcoin wallet? There\u2019s no right answer for everyone, but it\u2019s important to understand the trade-offs if you hold Bitcoin.<\/p>\n<p><small>Image Credit: <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.shutterstock.com\/image-photo\/closed-wallet-dollar-bills-bitcoins-on-776794912\">IhorL<\/a>\/Shutterstock.com.<\/small><\/p>\n<\/div>\n<p><script>\n setTimeout(function(){\n  !function(f,b,e,v,n,t,s)\n  {if(f.fbq)return;n=f.fbq=function(){n.callMethod?\n  n.callMethod.apply(n,arguments):n.queue.push(arguments)};\n  if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0';\n  n.queue=[];t=b.createElement(e);t.async=!0;\n  t.src=v;s=b.getElementsByTagName(e)[0];\n  s.parentNode.insertBefore(t,s) } (window, document,'script',\n  'https:\/\/connect.facebook.net\/en_US\/fbevents.js');\n   fbq('init', '335401813750447');\n   fbq('track', 'PageView');\n  },3000);\n<\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more like this article, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/technology\/\" target=\"_blank\" rel=\"noopener\">Technology category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/www.howtogeek.com\/347464\/whats-the-difference-between-a-bitcoin-wallet-and-an-exchange\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;What\u2019s the Difference Between a Bitcoin Wallet and an Exchange?&#8221; A Bitcoin wallet is basically a software program in which you store Bitcoin. An exchange lets you convert \u201creal money\u201d like US dollars to Bitcoin. Exchanges also provide a wallet\u2014but you don\u2019t necessarily have full control of that wallet. We\u2019re not recommending you invest in&#8230;<\/p>\n","protected":false},"author":1,"featured_media":415684,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/www.howtogeek.com\/wp-content\/uploads\/2018\/03\/img_5abc362ce7021.jpg?height=200p&trim=2,2,2,2","fifu_image_alt":"","footnotes":""},"categories":[18],"tags":[],"class_list":["post-415683","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/415683","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=415683"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/415683\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/415684"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=415683"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=415683"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=415683"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}