Hey All,
I was browsing my twitter feeds today and came across this pretty insightful Infographic from Binance that showcases the difference between Hot & Cold Wallets. If you are in the crypto space then you should be familiar with these types of wallets and decide when to use them. I'll be very honest here in my case all my crypto is on a hot wallet but whereas experts suggest to leverage COLD wallets to HODL your major crypto holdings. Simply don't have it lying ideal on any exchange or any other platform that provides crypto wallet services.
Now that we have some understanding of these wallets, lets look at some of the major differences between::
| Basis | Hot Wallet | Cold Wallet |
|---|---|---|
| ONLINE | Connected to Online | Stored & Kept Offline |
| SECURITY | Could be Vulnerable to Hackers | Less Vulnerable to Hackers |
| PRICE | Are cheaper as crypto is stored in exchange. Is FREE... | Additional hardware is required to store crypto and hence is expensice |
| CONNECTIVITY | Fast as crypto is connected to internet | Slow as crypto is stored offline |
| ACCEPTANCE | All cryptocurrencies accept hot wallets for storage | Only reputed cryptocurrencies can be stored in cold wallets |
| ASSET LOSS | Chances are higher | Coins are safe in the cold wallets |
| ACESS | Suitable for trading making them accessible for the instant exchange of coins | Not suitable for traders. Suites long term investors |
| USAGE | Mass adoption because simplicity | Less adoption as its expensive and requires through knowledge to use COLD wallets |
The above table clearly distinguishes between HOT and COLD Wallet. Based on ones usage folks can decided which wallet they would like to use the most. The mass usage as of date is of HOT wallets because they are FREE and simply to use. But one must note that it comes at a cost. If an exchange fails, becomes bankrupt or gets hacked/vulnerable then there are high likely chances of losing your crypto tokens. Whereas on the other side if you are not a trader and would like to HOLD your crypto at a safe place then the best wallet to use is COLD wallet like Ledger Nano X, Trezor Model T, ELLIPAL Titan Bundle and many others. As I stated above, I still do not HODL a cold wallet but would love to have one in near future. Hope you found this article interesting and can now clearly differentiate between - Hot Wallet Vs Cold Wallet and when to use ONE..... cheers
Do you normally use HOT OR COLD Wallet? Which would will be your first preference? Would love to hear your thoughts around it in the comment box below? Cheers
#wallets #hot #hotwallets #coldwallets #hotcoldwallets #hotvscold #offlinewallets #onlinewallets
Image Credits:: binance, twitter
Best Regards
