A cryptocurrency wallet is a software program that stores private and public keys and interacts with various blockchain to enable users to send and receive digital currency and monitor their balance.
Unlike traditional ‘pocket’ wallets, digital wallets don’t store currency. In fact, currencies don’t get stored in any single location or exist anywhere in any physical form. All that exists are records of transactions stored on the blockchain.
Three wallets to consider: ( there are others but Ill just go over the three)
Desktop: wallets are downloaded and installed on a PC or laptop. They are only accessible from the single computer in which they are downloaded. Desktop wallets offer one of the highest levels of security however if your computer is hacked or gets a virus there is the possibility that you may lose all your funds.
Online/exchange: wallets run on the cloud and are accessible from any computing device in any location. While they are more convenient to access, online wallets store your private keys online and are controlled by a third party which makes them more vulnerable to hacking attacks and theft.
Hardware: wallets differ from software wallets in that they store a user’s private keys on a hardware device like a USB. Although hardware wallets make transactions online, they are stored offline which delivers increased security. Hardware wallets can be compatible with several web interfaces and can support different currencies; it just depends on which one you decide to use. What’s more, making a transaction is easy. Users simply plug in their device to any internet-enabled computer or device, enter a pin, send currency and confirm. Hardware wallets make it possible to easily transact while also keeping your money offline and away from danger.
I am not sure I understand question 1, XLM can only be placed in an XLM wallet. Stellar, etherium Bitcoin Bytecoin etc all have their own wallets. If you have several crypto's on a single exchange, they are all in their respective wallets in your account. If you wish to transfer your coins to your desktop wallet, you will need the appropriate wallet for the crypto you are transferring. For example; If you send Bitcoin to your desktop wallet the software must be compatible with bitcoin. If by chance you send BTC to XRP wallet you will most likely lose the money. On many online platforms you can do cross chain transactions, but to my knowledge you cant with desktop wallets. So to answer your question yes, it matters which software wallets you have. Just remember send ripple to ripple wallets, btc to btc wallets etc.
Question 2: The trading process is simply sending and receiving.
Step 1 is to buy some crypto at a price you like. Transfer said coins/tokens to your wallet.
Step 2 wait and sell when the price is right.
Thats its.
Remember the wallets only store information (blockchain) which is a ledger of all transactions (coin specific). your wallet only holds the records of the transactions, no more no less.
FWIW this is what I do.
Send USD to coinbase
Transfer to GDAX and buy Bitcoin as a maker (no fees) then I transfer Bitcoin to another exchange, Binance for example, and buy Ripple. I buy the ripple through a crosschain transaction BTC-XRP
Then I transfer XRP to deskptop/coldwallet.
Thats it, it took some time to get comfortable with the process so i made lots of small trades to hang of things but its fun. Not as simple as eTrade.
