Cryptocurrency has changed the digital landscape tremendously, with crypto exchanges and crypto wallets allowing us to have access to digital currency. But there’s a difference between the two, and depending on how you want your digital assets to be secured, you should know what makes them unique.

Crypto exchanges allow you to buy, sell, and convert a variety of cryptos with either government-issued currencies (fiat currencies) or other digital currencies. These exchanges tend to have web-based and/or app-based platform that you can utilize. Certain crypto exchange platforms may have less or more cryptos available to choose from. Coinbase, Binance, and Kraken are some of the most popular crypto exchanges around the world.

A crypto wallet offers more privacy than a crypto exchange would. An exchange or wallet rely upon public and private keys. Public and private keys give access to your digital assets, where public keys allow you to receive transactions, and private keys being necessary to send transactions. An exchange stores both of your keys on the internet, while a wallet keeps your private keys offline, allowing you to have full control of them.

Think of the public key as your wallet address so you can receive funds. A person generally can’t do anything with only the wallet address, except send you assets. Now think of your private key as your login credentials or password, so you can access your account in order to purchase or send assets. If someone were to have access to your address and login credentials, they’d have full access to your funds and would be able to do as they please. With many wallets, only you know the password, not the platform. If you forget your password, you’ve either lost access to your assets, or there’ll be some sort of secret phrase you have to solve to get back into your account.

If a crypto exchange were to get hacked, your public and private keys can be exposed and the hacker would be able to access your assets. However, the benefit of an exchange tends to be that you have more trading options and flexibility than a wallet.

There’s no need to choose between having solely an exchange or wallet, as they should be used together. Purchasing assets on an exchange, then sending those assets to your wallet is one of the most common methods used today. Coinbase is one of a few companies that offer both a crypto exchange and crypto wallet platform. Now you’ll know the difference between the two, when searching for platforms to choose from.