The Banking Executive Magazine - November 2022 Issue

How To Pick The Best Crypto Exchanges? There are various types of crypto wallets, these include: • Software wallets: A software wallet is a computer program that has no physical coun- terpart. There are different types of software wallets, depending on where the program runs. Wallets like these can exist in a web browser, mobile device, or desktop computer. Software wallets are hot wallets by default because they exist on an internet-connected de- vice. • Web wallets: Web-based wallets work in a web browser and allow for easy integra- tion into apps like Non Fungible Token NFT marketplaces or decen- tralized finance (DeFi) markets. These wallets are among the least secure and are not suitable for long-term crypto storage. • Mobile Wallets: Mobile wallets exist on a mobile device like a smartphone or tablet. These wallets can be convenient for sending or receiving small amounts of crypto. If someone wants to buy Bitcoin at a Bitcoin Automatic Teller Machine ATM or use Bitcoin to pay for something, a mobile wallet might be a good op- tion. • Desktop Wallets: Desktop wallets run on a desktop or laptop computer. They can be useful for those who want to use crypto without having to go through an exchange. While desk- top wallets allow users to hold their own private keys, they are still considered to be less than secure because those keys are held on an internet-connected device. • Hardware Wallets: Hardware wallets are small de- vices that hold a user’s private keys and allow for the sending and re- ceiving of transactions. These wal- lets usually interact with a user’s computer via apps or web-based interfaces. CRYPTO WALLETS VS CRYPTO EXCHANGES A wallet and an exchange are two different things. Yet they still have some characteristics in common. Crypto wallets and crypto exchanges are similar in that they both: • Allow for the storage, receiving, and sending of crypto • Provide an easy way for people to interact with the crypto ecosystem • Are designed to be as simple as possible Despite performing some of the same functions, wallets and exchanges dif- fer in some important aspects. Crypto wallets and crypto exchanges are dif- ferent in the following ways: • Wallets allow people to hold their own private keys, exchanges do not • You cannot buy crypto with a wal- let alone, although some have con- nected exchanges • Most exchanges require users to verify their identity, whereas wal- lets can be used pseudonymously. ROAD AHEAD FOR ARAB BANKS AND AUTHORITIES Crypto exchanges are important gateways for investors to invest in crypto currencies. So far there is still a relatively small amount of world resources and data to analyse and monitor crypto exchanges world- wide and help investors in choosing the best crypto exchange. Hence Arab central banks and authorities ISSUE 167 NOVEMBER 2022 the BANKING EXECUTIVE 15 Table 5: Comparison between crypto wallet and crypto exchanges Allow for the storage, receiving, and sending of crypto Provide an easy way for people to interact with the crypto ecosystem Are designed to be as simple as possible Wallets allow people to hold their own private keys, exchanges do not You can’t buy crypto with a wallet alone, although some have connected exchanges Most exchanges require users to verify their identity, whereas wallets can be used pseudonymously Similarities Differences Crypto wallets vs exchanges Source: SoFiLearn sofi.com