CryptoURANUS Economics: Deposit: Defined in CryptoCurrency

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Monday, August 6, 2018

Deposit: Defined in CryptoCurrency

Deposit: Defined in CryptoCurrency


A deposit is normally defined as money given to a bank who safely holds it for you. However, when you deposit crypto, you’re not transferring the money. You’re actually transferring ownership and access of your crypto.



Most people who want to trade their cryptocurrency for another type use what is called an exchange. When a user deposits crypto into an exchange, what they are actually doing is transferring their ownership and access of the crypto to the exchange. 


In other words, they are cancelling their private keys and completely turning over their access to the exchange’s private keys.

Most exchanges are very trustworthy, but some are not. It is thought that most exchanges would reimburse you if they lost your crypto. But no exchange is required by law to do that. 

 

When you deposit your crypto, you are fully entrusting them to keep it safe.

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