Hot Wallet vs. Cold Wallet | Best Bitcoin Wallet

CRYPTO WALLET: Hot vs. cold wallet. What is a hot wallet? What is a cold wallet? This crypto for beginner tutorial gives an overview of the differences between a hot and a cold wallet in crypto. Plus advantages and disadvantages of each type of crypto wallet.

Hello, I’m Blooming Umoren.👋 In today’s tutorial, we are going to learn about the 2 types of crypto wallet – hot vs. cold wallet. This is a crypto for beginners tutorial and I’ll walk you through an overview of the differences between a hot wallet and a cold wallet in crypto. Plus advantages and disadvantages of each type of crypto wallet.

If you have any question(s), leave them in the comments section below and I will answer them. Feel free to connect with me on Youtube, Facebook, Instagram or Twitter.

So let’s go straight into today’s tutorial:

Crypto Wallets: Hot vs. Cold Wallet

There’s basically two types of crypto wallets.

Hot wallet
Cold wallet

Hot Wallet Explained

A hot wallet is a crypto wallet that is connected to the internet usually via mobile devices such as phones, tablets, desktops, web or apps that one can store and hold crypto coins and tokens. These are sometimes called software wallets. Examples of some hot wallets are Electroneum or Trust Wallet or Exodus or MetaMask.

Advantages of Hot Wallet:

It’s convenient to use.
Hot wallets are free
Easily accessible to whenever and wherever as needed via the internet
Easy to install on several devices e.g. smartphones, mobile devices, desktop, apps or web or any connected devices.

Disadvantages of Hot Wallet:

Vulnerable to hackers
Can be corrupted with malicious codes and malwares
Greater risk of losing your cryptos because hot wallets are connected to the internet and prone to malicious attacks.

Cold Wallet Explained

A cold wallet is an encrypted device that is not connected to the internet. It allows us to store our Bitcoin and cryptos safely and securely offline and protected. Because these devices are not connected to the internet, it makes them incredibly quite difficult to hack.

These are sometimes called hardware wallets. Cold wallet or cold storage is the best way to store your cryptos long term.

Cold hardware wallets are the most secure types of crypto wallets and practically the best type of crypto wallet to store Bitcoin and other crypto coins and tokens. Cold storage wallets store your crypto on the blockchain via physical devices like a USB stick or flash drive.

Examples of some cold wallets are Ledger Nano X, Ledger Nano S Plus, Trezor Model T, paper wallet

Advantages of Cold Wallet:

Most secure wallet to store Bitcoin and other cryptos
Not susceptible to malicious attacks or hackers
Incredibly difficult to hack
Low risk of losing crypto due to exchange run or bankruptcy or ban
You own and control of your cryptos and digital assets
Best way to store crypto long term

Disadvantages of Cold Wallet:

Not free. Each wallet cost range from $89 CAD to $299 CAD or more
Need to store the device and recovery phrases in a safe and secure location(s).
Possibility of physical theft, loss, misplacement or destruction due to natural events such as fire, hurricane, flood and more
Sometimes not convenient to use

As explained in the crypto for beginners tutorial – 5 Things To Do Before Investing In Crypto, it’s essential to move your crypto offline to a cold wallet such as Ledger Nano X.

There are several crypto cold hardware wallets and the best are the Ledger Nano X or the Ledger Nano S Plus.

It’s important to buy your crypto hardware wallet directly from the manufacturer and not on any third party websites such as Amazon, eBay, Costco etc. This is to ensure the authenticity of your device and to prevent storing your crypto on a compromised device.

✅ To buy your cold wallet securely and safely directly from the manufacturer: