Which crypto wallet is right for me? Hot vs. Cold
When you have cryptocurrencies you have the option to store them in a hot wallet or a cold wallet. We will explain what the differences are so that you can make the best decision of which is the best option for you.
Wallets are considered hot or cold due to their structure or origin. In hot wallets you can store external services, they are wallets located on a server which belongs to an exchange or e-wallet service. The user has access and availability to the server and their personal assets, but is not the owner of the service.
More features about hot wallets:
Security data can be retrieved by verifying your identity.
They are hosted on third party servers. The risks of online hacking are higher when our assets are stored on third-party servers.
It can be used 24/7 from anywhere with internet access.
They can offer exchanges between other crypto assets or currencies in real time.
Crypto assets are usually connected to statistical services that are updated live and allow the user to see graphs and behaviors instantly.
If the platform falls you cannot gain access.
In cold wallets, the information is stored in a file that is located in a memory that can vary from an HDD to a USB or even a cell phone. They are aimed at those who do not want to keep their assets online, or dispose of them immediately.
More features of cold wallets:
They are hosted on their own storage device and located solely by the user.
The device must be carried in order to carry out money transactions.
They have security and storage data that belongs to the user.
They have greater security than the hot ones.
They are less likely to be attacked because they are connected to the internet
If the user forgets the password and the security questions, he will not be able to access his assets, there is no technical support service to help him recover said data, which means losses of all the money in it.
If you are an investor who wants to buy bitcoin and ride on its price volatility, you need immediacy of your money and it is better to use a hot wallet. On the other hand, users who want to save for (or keep) higher and long-term earnings need security and using a cold wallet is recommended.
Hot wallet recommendations: Coinbase Wallet, Bitso Wallet and Binance Wallet.
Cold wallet recommendations: Ledger Nano and Trezor Wallet.
