Empowering Women in the Cryptocurrency Realm: Prema Chuttoo’s Educational Series for Womenlines Readers, sharing today about Crypto Exchange Wallets. Prema Chuttoo is a SAP Technical Consultant from Belgium and is a guest contributor at Womenlines.com.
I am sharing this knowledge because I had no idea what these wallets were for when I started my crypto journey, therefore was so confused with all these terms and their usages. Prema Chuttoo
Coming back to the present topic, normally there exist 3 types of wallets — spot, margin and derivatives.
Spot Wallet is a custodial wallet for storing cryptocurrencies. It is the default wallet assigned to users upon registration. As a custodial wallet, Binance holds the private keys on behalf of the users, ensuring ease of use and accessibility. This type of wallet is suitable for beginners or users who prefer convenience over full control of their private keys. Normally users use this wallet to hold their cryptos.
Derivative/Futures wallet is the wallet used when we trade on the market using leverage. So normally we transfer funds from spot wallet to derivative if we want to trade with leverage(like 2x or 3x more than we have in our wallet).Normally this is for experienced traders or even investors who trade for a longer period with greater risk and of course assurance. They bet on leverage because they know the tits and bits of trading.
Margin wallet is used to store the margin is the money borrowed from a broker and the difference between the total value of the investment and the loan amount. This wallet is used mostly by users who lend money on the platforms.
The different wallets are on the Binance platform.
Spot and futures wallets are generally used for holding and trading on almost all platforms. It’s very important to understand these wallets if you want to dive into the crypto adventure. Have fun discovering it.
I am Prema Chuttoo, your guide in the crypto journey.
Enjoy the educational part of crypto!