Bitcoin Expert Answers Common Crypto Questions

We asked crypto expert Adam Shelton to answer the most common cryptocurrency questions from players.

From wallets and transactions to security and speed, these are the topics that come up again and again.

Now, the answers are in.

In this article, Adam breaks down the essentials in a clear, practical way, helping readers understand how crypto works, what to watch out for, and how to use it with more confidence.

1. What is a crypto wallet in practice, and what does it actually control?

A crypto wallet is both hardware and software, with you the owner having full control. The wallet manages your access to your private keys, allowing you to control your own crypto.

2. Where is crypto really stored, and what happens if a wallet or exchange disappears?

The crypto assets are stored on a decentralized public ledger called the blockchain. Your crypto is recorded, secured, and safe. If you did lose your password or seed phrase, you would lose your access to your crypto unless you have a backup.

Just as you do with your banking or other passwords my advice is to remember to always have your password or seed phrase written down securely, for your own safety.

And for those of you wondering what the meaning of ‘Decentralized’… When we think of a banking system, we know and understand it to be controlled by the government.

Decentralization in it’s purest term simply means there is not one person or government that controls the ledger, instead it is spread out among the network of users.

3. What’s the real difference between using an exchange platform and using your own wallet?

Centralized Exchange Platforms are public crypto websites or mobile web applications where you can buy, trade, or sell crypto. It’s like using EBAY for crypto in a way.

Some of those user-friendly platforms are called Gemini, Binance, and Coinbase. On those platforms, you can also create new accounts and deposit your funds. Those platforms will hold your funds unless you decide to withdraw them.

Using your own crypto mobile wallet is like having the keys to your personal car. You have complete control over your password and private keys. You will use a decentralized exchange like Uniswap to buy and sell crypto. Your funds will remain in your personal crypto wallet.

4. Hot wallets vs cold wallets: when does each one actually make sense?

Hot wallets are crypto software wallets that are always online. This is very similar to using your banking wallet application. These wallets need to be connected to the internet using crypto web applications such as MetaMask or Trust Wallet to execute crypto buying and selling transactions.

Cold wallets are crypto hardware wallets that store crypto offline, such as a Ledger or Trezor wallet. This is like storing and carrying your funds on a USB device.

The Cold wallet option makes a lot of sense for users who want to carry their crypto funds on the go.

5. What actually happens during a crypto transaction, step by step?

Step 1: Initial Stage

Here you enter the sender’s public crypto address, the amount being sent, and the network. Next up comes the transaction fee, this is similar to a bank transfer. You would need to know the sender’s address, bank name, and amount sent.

Step 2: Creation of a Crypto Transaction

The wallet connects to the transaction’s input and output data. The fee will be calculated during any data traffic congestion. Basically, this step pulls all the information from the first step to execute it.

Step 3: Transaction

The transaction is now ready be signed from the private key. The proof of ownership is created with the digital signature. This confirms you are ready to move to the next step. Just like making sure you are home before the cable man arrives.

Step 4: Signing

This step basically means the transaction is almost ready for completion
This is where the signed data transaction is broadcast or exposed to the network. The information is now sent to the internet node that is accessing the mempool, a place for untested transactions.

Step 5: Peer-to-Peer Confirmation

The Fifth step is that the node confirms the transaction across the peer-to-peer network. Now, the minders and validators are involved, adding blocks and testing to the chain. We’re in the final testing, such as checking the last wire on your car battery.

Step 6: Blockchain Process is Added to the Block

Final progress is being completed, making the transaction viewable and ready for final confirmations. The step reconfirms before final completion. Just like double-checking your well-written email before you send it to your boss.

Step 7: Payments

The validator, and miners are paid from the fees. The transaction has been completed. This means you can finally rest because everything has been completed.

6. Why are crypto payments usually faster and cheaper than bank transfers – and when are they not?

Cryptocurrency payments are faster and cheaper because of low fees enabled by real-time blockchain technology. Also, the blockchain is globally available at any time. Meaning you can complete a crypto payment transfer even on holidays or weekends.

Personally, this is my favourite point. I completed several crypto payment transfers on Christmas Day.

The banks use a 50-year-old system for payment transfer. This is why bank transfer may take 1-5 business days, and banks are closed on holidays.

Crypto transfers could take less than a second, depending on the blockchain’s performance.

Sometimes, when the network becomes congested due to high user demand, crypto transfers can slow down. The fees per transaction could increase as well, but all this doesn’t happen often in crypto.

7. How do you choose the right network when sending crypto?

When you choose a network, make sure the network matches your asset. This is similar to matching your bank name with your bank address.

For example. If you decide to use the Ethereum network for crypto, make sure the access name matches Ethereum when sending and receiving crypto.

Always double check your progress.

8. What actually happens if you send crypto to the wrong address or network?

Crypto transactions cannot be reversed once sent to the wrong address. The funds will go into a deserted wallet and be lost forever. That would be like dropping your money into a deep water well and not being able to get it back.

When you send crypto to the wrong network, the funds are lost. So be sure to double and triple-check your steps before sending any crypto.

9. When to avoid using digital currency for payments?

Unlike a debit or credit card where you can easily track payments and if funds are sent to an incorrect account, you can put a stop to the payment or contact your bank to dispute the payment.

Here are just a few suggestions where it is not wise to use digital currency on the following transactions:

• In some countries like the US Crypto is considered as selling property, and is taxable, meaning every transaction should be kept as a record for tax purposes.
• Daily expenses, Grocery shopping, paying your rent or bills, as Crypto can increase or decrease very quickly, and you could find yourself overpaying for an everyday item.
• If you’re not tech savvy, one mistype and your funds are gone for good.
• If you’re in a hurry, buying groceries for example you want an instant transaction, in some instances Crypto needs to be verified on blockchain, which can take a while.

All payments are final with crypto. So crypto may not be an option for you for payments. Crypto payments are irreversible. The payment transaction will remain visible on the blockchain.

10. What mistakes do first-time crypto users make most often?

The most common mistakes are sending crypto to the wrong network or address, forgetting passwords and seed phrases, or accidentally clicking on fake links.

It’s wise to get familiar and always double-check your work before you proceed.

*Disclaimer from SlotsLV: Any tips, predictions, or strategies published are entirely the opinion of the author, and are not guaranteed to be correct or result in financial gain. The Author is not an employee of SlotsLV.  Please be aware that there are always financial risks involved in gambling and it is the responsibility of the individual to play with or without the information provided on this website. SlotsLV cannot be held responsible for any financial losses that may incur as a result of following any of the tips, predictions, or strategies provided on this website.