A third party typically holds exchange wallets or custodial wallets. It is the easiest way to buy and sell bitcoins, as you don’t have to deal with storing them on your own. They are controlled by an intermediary, who manages all the trading activity and ensures that only verified users can access their funds. However, exchange wallets may also face risks such as hacking, withdrawal limits, downtime, and high fees. That’s why it’s crucial to use exchange wallets from trusted companies.
How can you tell if an exchange wallet is trustworthy? Before choosing, read reviews about the company and how they handle customer complaints. Researching information about the people behind the exchange will also help you determine if it’s reliable. Another thing to look for is whether the company offers insurance against hacks. If so, this should be reassuring when deciding whether to use an exchange wallet or not.
