Question

question 2 of 10
how is a cryptocurrency exchange different from a cryptocurrency wallet?
there is no difference since all wallets are hosted on exchanges.
exchanges are only used to make transactions, not to store cryptocurrency.
exchanges are offline whereas wallets are always connected to the internet.
an exchange controls your keys but you control your cryptocurrency.

Explanation:

• The first option is wrong because not all wallets are hosted on exchanges (there are non-custodial, independent wallets).
• The second option is wrong because many exchanges offer storage for cryptocurrencies alongside transaction services.
• The third option is wrong because exchanges are typically online platforms, while some wallets (hardware wallets) are offline.
• The correct option distinguishes the core difference: exchanges hold the private keys for crypto stored on their platform (custodial control), while users retain control of their own keys (and thus their crypto) with most dedicated wallets.

Answer:

An exchange controls your keys but you control your cryptocurrency.