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Beginner12–18 minLesson 2

Wallets 101 — Exchange vs Self‑Custody (Software/Hardware)

Choose what fits you today and plan secure storage for later. Learn pros/cons of exchange wallets, self‑custody apps (seed control), and hardware wallets. Understand networks, address formats, and memos/tags.

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2.1Exchange wallet (custodial): convenience vs control

Pros

  • Easy on‑ramp: card/bank payments (where allowed), built‑in P2P
  • One app to buy, hold, and send; KYC compliance

Cons

  • "Not your keys, not your coins": exchange holds the private keys
  • Region restrictions, withdrawal limits, dependency on exchange security

Quick checklist:

Complete KYCEnable 2FA (TOTP)Set anti‑phishing codeConfigure withdrawal allowlist

Best for starting and small balances; move savings to self‑custody later.

2.2Self‑custody (software wallet): seed = control (and responsibility)

Pros

  • Full control via seed phrase (12/24 words); multi‑chain; more privacy

Cons

  • You must back up the seed; losing it = losing funds
  • Often no card on‑ramp; must fund from exchange or exchanger

Safety basics

  • Write seed on paper (no screenshots/cloud), store safely (two secure locations)
  • Never share seed; verify official app downloads

Note: Good for daily spending wallet (hot) and later for savings with hardware.

2.3Hardware wallets (cold storage) — brief

Purpose

Long‑term savings; private keys kept offline; verify addresses on device

Setup

Seed/passphrase; PIN; firmware from official sources

Plan

Start with software wallet; add hardware wallet when savings grow

Tip: Keep hot (spend) wallet small; move excess to cold storage periodically.

2.4Addresses, networks, memos/tags (don't lose funds)

Networks

TRON (TRC20) (Low fees)Solana (Low fees)Ethereum (Gas fees)Bitcoin (High/variable)

Always match coin+network on both sender and recipient sides (e.g., USDT TRC20 requires TRON address)

Memos/tags/dest. tags: required by some chains/exchanges (XRP, XLM, BNB, some exchange deposits)

QR vs copy/paste: prefer QR, otherwise verify first/last characters; beware address poisoning

Requires memo/tag?

XRP
Often yes
XLM
Often yes
BNB
Often yes
BTC
Usually no
ETH
Usually no
TRON
Usually no

2.5Wallet chooser (interactive helper)

Answer all three questions above to get a personalized suggestion.

2.6Practice: install a software wallet & plan backups

1

Download from official site/store (e.g., Trust Wallet/Exodus)

2

Create wallet → write seed (12/24 words) on paper; store in 2 secure locations

3

Create a "spend" account; (optional) label a future "savings" target for hardware wallet

Never store seed in screenshots/cloud/email.

2.7Deliverable: Wallet decision + backup checklist

Your Wallet Decision:

Chosen wallet now: ___
Seed backed up?: ___
Passphrase set?: ___
Storage locations: ___
Network(s) for payments: ___
Plan for savings: ___

2.8Mini‑Quiz

Mini-Quiz

Test your understanding with 3 questions. Pass with 2/3 correct.

Safety Note & Legal Disclaimer

Educational content only. Not financial advice. Crypto involves risk of capital loss. Never share seed or API keys; do not grant remote access. Always match network and include memo/tag if required.

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