Do you know where your Bitcoin is?
There are only two currencies in the world: those you can control, and those you can't control.
Ask someone in the currency circle to ask such a question, "Where are your coins?" 90% of people will answer [Wallet] or [Exchange]
(The remaining 10% of the monsters will be blindfolded "Where did I put it?")
In fact, the so-called storage in wallets and exchanges does not mean that the coins are stored in the wallets and exchange databases. All the coins in the world are still stored on the blockchain. The main difference between the wallet and the exchange is that people have different control over the coin.
There is a sentence called "Not Your Keys, Not Your Bitcoin". This sentence means that the real control of the mnemonic (private key) is the real control of your currency.
However, in daily life, there are very few people who truly understand and independently control assets, and there are still many users deposited on exchanges.
So today I will tell you how to deposit coins in exchanges and wallets, and discuss with you based on the actual situation, how to allocate and store your own assets reasonably.
1. When you deposit coins on the exchange, where are your coins?
The general recharge steps for exchanges are as follows:
1. The exchange generates a deposit address
2. You transfer coins to this address
3. The exchange will check the transaction confirmation on the blockchain and enter it into the account.
4. Your corresponding balance increases.
First of all, in order to facilitate centralized management, the exchange will not provide the mnemonic (private key) of the account to the user, so the highest control of this coin is in the hands of the exchange, so you are in the exchange The balance is essentially a number that the exchange's database gives you feedback, and it can also be understood as an IOU issued to you by the exchange.
So when you deposit coins on the exchange, your coins are equivalent to the address of the exchange; when you perform operations such as withdrawing coins, whether you can get your coins depends on whether the exchange will cash it out for you That IOU.
Extended reading:
1. Generally, the exchange will regularly sort out the address balance and integrate most of the assets on the user's address to a certain address, so sometimes when you search for your own exchange address on the blockchain browser, it is possible to find asset transfers. It is the exchange that is sorting the balance, as long as the balance in the exchange can match, don't worry too much.
2. When you perform transfers, pending orders and other operations within the exchange, they are all digital transfers in the exchange system, and transactions cannot be queried on the blockchain. This is an off-chain transaction. When you withdraw coins, when the exchange sends the coins to the address you submitted, the transaction can be queried on the blockchain, which is an on-chain transaction.
When you store coins in your wallet, where are your coins?
Friends who have used the wallet have been told by thousands of warnings: Be sure to remember the mnemonic (private key) (you can search for the article "Little Science: What are the private key and mnemonic" in Bitpie Weibo)
Private keys and mnemonics are so important because they are the highest authority to control blockchain assets. Depositing coins in the wallet, sending and receiving are completely free, no one will review your deposit and withdrawal behavior.
Some children think that depositing coins in the wallet means transferring the coins to the wallet. In fact, this is a big misunderstanding. As mentioned above, all coins in the world are stored on the blockchain. The main function of the wallet It is to generate mnemonic words, receipt addresses, and help everyone interact with the blockchain. For example, the balance in your wallet is displayed for you after the wallet reads the balance of your address on the blockchain. If there is no wallet, operate Assets on the blockchain need a certain amount of code capability.
When you store coins in your wallet, your coins are completely under your control. Even when you want to change a wallet, you only need to restore your recorded mnemonics to other brands of wallets, and your assets will be the same Back.
So do we need to store all the coins in the wallet?
Because the above analysis is mainly from the storage and sending and receiving scenarios, these scenarios are the advantages of the wallet, so it sounds like the wallet will be better than the exchange, but is this really the case? Nonsense, of course this is the case. When I do a wallet, I can praise the exchange if I don’t praise the wallet? ? ?
Okay, let's boast about exchanges... Talking about how users should store assets, of course, starts from the user's daily use scenarios. If it is a frequent and heavy trading party, it will not store any digital assets. The first choice is definitely the exchange.
Of course, it is more suitable for most people to put most of the long-term immobile coins in the wallet, and a small part of the coins in the exchange to solve the problem of itchy hands.
I don't think that centralized exchanges are evil. The emergence of exchanges has greatly improved the liquidity of blockchain assets and played an important role in the popularization of blockchains. No matter whether you choose an exchange or a wallet, there is no right or wrong. After everyone understands the logic behind the wallet and exchange, the most important thing is to customize the asset allocation and storage plan that suits you.
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