What are the differences between crypto wallet and crypto earn? Most people, especially the beginners in the crypto space, are confused about Crypto Earn and crypto wallet since they do not know the difference between the two.
Well, if you are one of them, you will not be confused anymore because this article deals specifically with the differences between the two.
If you choose to hold your coins in Crypto Earn, a specific service offered by Crypto.com, you may earn an annual yield of up to 2.0 % depending on the terms and conditions of the platform.
The same service is also provided by other crypto exchange platforms and your earnings can differ according to the platform you choose. Check out Non-Custodial Crypto Wallets vs Crypto Custodians.
A particular question that most of the users put up is whether or not the holding will grow along with it as well. Or, is it that the underlying value of the asset will decline over time.
Another concern among the users typically is whether or not the earnings in this form are similar to cash holdings where they will only get the annual return and nothing else.
6 Differences Between Crypto Wallet and Crypto Earn
All of the doubts mentioned above about Crypto Earn can only be cleared away when you know the difference between it and the crypto wallet, which is the sole objective of this article. Here they are for you.
Going by the definition of the two, a crypto wallet is a place where you can simply store your crypto coins and use them as and when you want to trade them. It is more like a fiat wallet with the only difference that you can store only crypto coins in it.
On the other hand, the Crypto Earn, in comparison, is a place where you can start earning interest from when you put your crypto coins in it. Depending on the policies of the platform, you are allowed to lock up your crypto coins for a specific period of time. The higher the locking period, the higher is the interest earned.
2. The Payout Factor
Crypto Earn and other similar services provided by other platforms will allow you to earn rewards for depositing your crypto coins into a contract.
The payout for this is varied and largely depends on three specific factors such as the time for which you lock your crypto coins up, the stake of the specific crypto coins locked up, and the value of the asset itself.
For a fixed term, the interest is calculated by multiplying the principal amount by the quotient of APR by 365 days. For the flexible terms, the minimum daily balance is multiplied by the same to calculate the daily interest. However, interest for the flexible term will only start to accrue on the next day of making a deposit.
The APR will however change if you use the native token of the platform to stake or withdraw in the middle of the deposit term. You will receive the total accumulated interest on your deposits after every 7 days and this interest will be deposited into your crypto wallet.
These interests are usually paid in the same coins as your deposit currency and are available for immediate use. You can see the amount of interest earned on your deposits daily in the home screen of Crypto Earn under the ‘Total Earnings’ heading.
In comparison, a traditional crypto wallet does not come with any payout option. These are generally digital wallets that typically store your secret encrypted keys that are used to sign digitally while making a transaction on the blockchain distributed ledger where everything is stored.
These wallets also store the address on a blockchain where a specific crypto coin resides. However, in the future, these crypto wallets will function over and above the capacity of just a keeper of cryptocurrencies and may even represent professional and personal identity and financial status of the user.
3. The Term Lengths
When you consider the term lengths, there are usually three primary ones with Crypto Earn. These are flexible time periods, for a month, and for three months.
As said earlier, the interest you earn on your crypto coin deposits will be more as the lock up time of the coins goes up. Also, with a higher stake, you can not only earn more interest but will also be eligible for enjoying more and better features.
As it is in the case of the crypto wallets, there are no such term lengths of holding your crypto assets in them. This is because there are only a handful of digital currency platforms that offer interest to the users for holding their crypto coins and tokens in their wallets just like traditional banks do.
And for the personal hardware wallets, there is no question of it at all. And, since a blockchain wallet address does not come with an expiry date, you do not need to worry about the time you hold your coins in it.
Once you create such a wallet address online with a crypto exchange it will stay there forever. You can make a transaction anytime you wish and at long intervals, provided you do not lose the key to access it by then.
4. Use of Coins
The difference between locking your crypto coins into a lending program like Crypto Earn and a crypto wallet is that these coins are typically used for a lending program.
The platform will use your funds to generate more revenue for them and reward you with a portion of that revenue just as the traditional banks do with your funds in the form of interests.
On the other hand, when you lock up your coins in a crypto wallet, the platform will seldom be able to use your funds according to their will. Most of the time, they will need you to raise a request for a transaction, whether it is for buying new coins or for selling the old ones off, if it is an online wallet.
In the case of the hardware wallets, you are the boss! This means that, ideally, when you put up your crypto coins in a traditional wallet it will stay stagnant until and unless you wish to trade with them.
5. The Working Process
Whether it is Crypto Earn, Binance Earn, or any other, all act as a one-stop shop for selling all your crypto coins or increase your earning potential with the funds you hold in here. This alternative crypto coin earning option for the HODLERS is easy to use due to its working process.
There are lots of different financial products available on the platform making it easier and convenient to transfer your crypto coins into your preferred solution. You can also see your funds grow. It is also easy to cash out your profits into your chosen product.
On the other hand, the working process of the crypto wallets typically depends on the software on which it works. This software also allows the users to view the crypto balances when they wish to make any transaction.
Though the crypto wallets come in different names and variants, however, in general, all of them support one or more crypto coins and will allow you to store different crypto specific public addresses as well.
These public addresses are just like traditional account numbers that you will find in a conventional bank but these are crypto specific. These addresses are typically used to receive a particular type of crypto coin and can also be shared publicly.
This means that if you want to receive Bitcoin, you will need to have a Bitcoin address.
The types of Crypto Earn platforms are not as varied and wide as the crypto wallets. You will either get a Decentralized Finance or DeFi or a Centralized Finance or CeFi platform.
In comparison, when it comes to crypto wallets the different types that are available include online wallets, offline wallets, mobile wallets, hardware wallets, software wallets, desktop wallets, and paper wallets.
There can also be a few additional categorizations of the above types of crypto wallets such as custodial and non-custodial wallets, full node wallets, coin specific wallet or network specific wallet, web3 wallet, and universal or multi-coin or multi-asset wallet.
Which is Better – Crypto Wallet and Crypto Earn?
Before looking at the answer to this particular question, it is better to look for the answers to some other questions.
This will help you to understand which among the crypto wallets and Crypto Earn is better.
However, looking at the diverse functionalities of both, none can be termed as the winner.
When it comes to coin support, both the crypto wallets and Crypto Earn support multiple cryptocurrencies which can be 60 or more.
The number may differ depending on the specific platform you choose. In fact, you will not get less than a dozen of different stablecoin and digital assets supported by the Crypto Earn platform.
If you consider the eligibility factor to use Crypto Earn, be informed that it is quite easy to prove your eligibility, provided the service is available within your jurisdiction.
You will need to go through an ID verification process for that so that you can use the products offered by the platform.
Though you may select products that do require such verification, you will have to indicate the minimum amount of your chosen product in both the cases.
The Crypto Earn platform is easy to use and start earning. All you have to do is transfer the desired amount of crypto simply into your preferred product.
The earnings will start accumulating from the very next day though in some cases the conditions may vary according to the product selected.
Your earnings may also go up and down every day due to the fluctuations in the market conditions, the price of the crypto coins, as well as other crypto related events.
These fluctuations are quite prominent in the high-yield products.
While using Crypto Earn you can make more than one active deposit provided the combined amount deposited is within the limit of USD equivalent.
And yes, you can also make deposits in different types of crypto coins for different terms.
However, make sure that the total amount is more than the minimum threshold requirements in such cases so that the interest accrued for the flexible term is not paused.
One good thing about Crypto Earn is that if you upgrade your staking tier you will get a higher APR, starting from the next day of making the deposit.
This will be applicable to all the existing terms and for the rest of the fixed period.
However, at the end of the term, your deposits will be transferred to your crypto wallet automatically in the app.
Therefore, Crypto Earn is quite a handy and productive program to earn interest on the crypto coins you hold.
These programs offer varied earning options to the users by incorporating different approaches from the traditional crypto staking methods and financial systems.
However, the interest rates offered by the platform or platforms may vary depending on the demand and supply of the specific assets.
It is also dependent on the efficiency of the blockchain when the coins are at stake. If you do not like the prevailing rate of interest, you can withdraw your crypto tokens anytime.
However, please note that the withdrawal policy may vary from one platform to another as well as the particular financial offer you choose.
This is because a few platforms may not be as flexible as Crypto Earn and impose fees on withdrawals or restrictions on the limits if you withdraw before the expiry of the specified time period.
The risks involved in earning interest on your crypto holdings this way are quite similar to trading crypto coins which include asset losses due to hacking incidents and contract vulnerabilities.
Additionally, there can also be other risks involved such as bankruptcy, termination of business, cessation or abnormal suspension of a project or a third party DeFi platform.
Now, you should shift your focus to the crypto wallets in order to find out whether it is better than Crypto Earn.
First, you will essentially need a crypto wallet to store your private key and the public addresses.
However, technically, you will not need to download a hot wallet on your desktop or store them in a cold wallet. You can use one of the online wallets offered by the different crypto exchanges.
Though crypto experts will advise against it, storing your crypto coins in an online wallet is quite okay until you gain sufficient knowledge about hot and cold storage, public and private keys, and other topics related to crypto security.
However, it can also be added that your goal should not be to rely on this option entirely.
This is in spite of the fact that several crypto wallets on the exchanges have spruced up their security measures for better and higher safeguarding and there are also a few other exchanges that offer insurance coverage on the crypto holdings.
Add to that, exchanges also use cold storage methods instead of hot storage to store the crypto coins to provide an additional layer of protection and convenience in case the crypto coins are stolen by the hackers or due to a failure in the system.
Still, the chances of hacking and other vulnerabilities still remain in these wallets.
The question here is then about the tradeoff regarding the amount of control you will have over your crypto coins.
Equating it to the ability of the traditional banks to freeze an account as well as the decentralization maxim doing rounds in the crypto community of ‘not your keys, not your coins,’ it is quite risky to allow a centralized entity like the crypto exchange to hold your private keys and manage your funds.
Also, there is a significant chance of a crypto exchange going down right at the time when you wish to buy or sell your crypto coins. If you keep your funds in an exchange, your options will be limited.
As said earlier, the crypto wallets also hold the public addresses that communicate all transactions made on the blockchain of the coin.
As long as you are the owner of the address, you can send or receive crypto coins and move funds as and when required.
The private key helps in proving the address with the help of the secret code linked with the public address especially in the non-custodial wallets.
As for the custodial wallets, the third party exchanges or the brokers, who are the custodians, hold this key and you just have to input the password into the wallet app.
Therefore, after going through all these aspects, it can be said that both a crypto wallet and Crypto Earn have their significant virtue and therefore it is hard to compare them to find which is better.
A crypto wallet is just like an online bank account. The address in here is just like the account number and the blockchain of the coins is similar to the ledger of the bank. If it is a custodial wallet, the custodian is like a banker.
Crypto Earn, on the other hand, is growing in popularity since it offers additional opportunities to earn crypto coins using the existing holding.
It is for this reason you will find several other similar platforms offering services that are centered on earning through crypto holdings like Crypto Earn to their customers.
Now that you know the difference between crypto earn and crypto wallet along with their working process, functionality and significance, you can easily decide where you want to hold your crypto assets to gain more benefits.