TokenPocket is a complete suite of products and services tailored to the needs of a blockchain enthusiast. Call it a one-stop-shop for all things crypto. From the extra security that a cold wallet provides, the liquidity of a centralized exchange, to the convenience of the TokenPocket(TP) DApp browser, everything you need is in the TokenPocket app.
There are a plethora of services all in one TP app and sometimes, it’s easy for newbies to get things muzzled up. The purpose of this post is to differentiate between a TokenPocket Wallet account and a TPExchange account and by doing so, make things crystal clear.
Ownership
TokenPocket wallet is non-custodial, it doesn’t hold or know your private keys and therefore, you get full custody and responsibility for securing your private keys. On the other hand, TPExchange is a centralised service that takes custody of your keys and your funds.
While non-custodial wallets offer the best blockchain facilities in the sense that they are more secure than custodial wallets, they give users full control of their assets and private keys and this puts the responsibility of securing their keys on the users.
Recovering passwords
With the TokenPocket wallet, if you lose your private keys, you lose your funds forever and there is no recovery whatsoever. Some users would rather relinquish control of their assets to a trusted exchange like TPExchange in a bid to save themselves the stress of securing their assets.
TPExchange provides you with what is known as a hosted wallet which is similar to a regular banking app where if you lose your password, you can always regain access to your assets.
KYC
An important thing to note about a non-custodial wallet like TokenPocket is that you are not required to do KYC. You can choose to be anonymous. TPExchange, on the other hand, requires that you do some KYC. It is a legal requirement and you simply can’t circumvent it.
DEX or CEX
Decentralized exchanges (DEX) are great because all the trades and transactions get recorded on the blockchain, they are therefore more transparent and decentralized. On the other hand, centralized exchanges(CEX) have more liquidity, higher trading volume, more speed and all the benefits of KYC and AML.
Before now, users of the TokenPocket app could only trade on the available decentralized exchanges on the app. Now with the TPEXchange, TokenPocket users can enjoy the best of both worlds(DEX and CEX).
Conclusion
It is important to note that exchanges are not banks. They are supposed to be a site where you “exchange” one cryptocurrency for another. Traders are the major users of exchanges because they are always exchanging/trading cryptocurrencies. So if you are leaving your money on an exchange, you have to reckon that you are basically trusting them with the custody of your funds and as long as the exchange is safe, your funds are safe.
While some people prefer to take responsibility for their funds and secure their private keys, others prefer to relieve themselves of that responsibility and entrust the security of their funds to an exchange. Whichever path you choose to follow, TokenPocket got you covered. You can use the TP wallet, TPExchange, or both of them, depending on your needs.
This is part 3 of a series where I take a deep dive into the TPExchange. Click on the following links for the other parts.
Part One: “Why you should create an account on TPEXchange”
Part Two: “How to create an account on TPEXchange”
Part Three: “TokenPocket Wallet VS TPExchange”
Part Four: “How to Deposit Cryptocurrency to TPExchange”
Part Five: “How to Trade on TPExchange”
Part Six: “A weird post about $10”
Part Seven: “Arbitrage on TokenPocket Wallet and TPExchange”
