Traditional banking systems have taught us a valuable lesson: securing your money is the most important thing to do. That is why the bank has bulletproof doors, security guards, safes that are protected by various sensors, sophisticated biometric scanners, and so on.
But ironically, human intervention has become one of the biggest deficiencies in bank security systems. Because of this, a Bitcoin decentralization system emerged as the answer to these problems. Through a feature called Cryptowallet or a virtual crypto wallet, crypto money owners can store their assets without requiring storage and physical security systems.
But do you know? Crypto wallets are divided into two types, namely Hot Wallet and Cold Wallet. Well, this article will discuss What is Hot Wallet and Cold Wallet for Bitcoin.
Hot Bitcoin Wallet
Hot Wallet or Soft Wallet characteristics are similar to check accounts. A person can use Hot Wallet to access funds, make payments, and make instant transactions. This wallet is always connected to the internet and guarantees very easy accessibility. However, this special feature can backfire, because the online world is always vulnerable to various acts of hacking.
Because Hot Wallet is always connected to the internet, the risk of hacking and fraud is increasing. The emergence of cases such as phishing and hacking is now becoming more prevalent. Therefore, it is recommended that crypto users limit the amount of funds they save in Hot Wallet for Bitcoin.
There are three main features of Hot Wallet, namely:
Most services are free.
Very accessible.
Very intuitive and easy to use.
Cold Wallet For Bitcoin
In its use, the Cold Wallet is much safer than Hot Wallet. Cold wallet is offline, so there is no chance for criminals or hackers to be able to take funds in it. Cold Wallet can be a paper wallet (Paper Wallet) or a hardware wallet (Wallet Hardware).
Paper Wallet
Using Paper Wallet means saving your coins on a computer that has never been connected to the Internet. This method is very safe because the computer used to produce private keys is not vulnerable to cyber attacks. This type of wallet can give you confidence that your funds will remain safe for a very long time.
Wallet Hardware
When you compare Hot Wallet and Cold Wallet, then the Cold Wallet in the form of hardware is the most superior choice. This type of wallet has the strength and reliability, commensurate with the price which is quite expensive. In addition, this Wallet is a very good choice when you want to ensure long-term money security.
Hot Wallet Comparison and Cold Wallet for Bitcoin
If you make a comparison between Hot Wallet and Cold Wallet, keep in mind that the two wallets are used for different purposes, so there are quite striking differences between the two, including:
Security
When we talk about security, Hot Wallet is outperformed compared to Cold Wallet for Bitcoin. Because Hot Wallet is always connected to the internet, this technology is more vulnerable to hacking, phishing and similar cyber crimes.
Transaction speed
Hot Wallet is specifically made for instant payments, fast transactions and flexible operations. In contrast, Cold Wallet is made to store large amounts of coins for a long period of time. So when comparing Hot Wallet vs. Cold Wallet in terms of transaction speed, of course Hot Wallet will be more reliable.
The amount of funds that can be operated
Another thing to note is the amount of funds that can be stored in each crypto currency wallet. Hot Wallet can only save a limited amount of money, while Cold Wallet can store as many crypto currencies as possible. Therefore, Cold Wallet is superior if it is used to store large amounts of coins.
Examples of Hot Wallet and Cold Wallet Bitcoin
The number of crypto wallets in the market makes new users confused about making choices. Here are examples of Hot Wallet and Cold Bitcoin Wallet that are widely used:
Hot Bitcoin Wallet
Exodus
One feature that makes Exodus stand out is a platform that is very intuitive and easy to use. This Hot Wallet has an attractive graphic display and provides customer service that can be contacted.
Coinpayments
This widely accepted Hot Wallet by the community supports more than 75 types of crypto money. Like the majority of Hot Wallet on the market, Coinpayments are free and not complicated to navigate. Not only that, Coinpayments has the ability to make purchases online.
Electrum
Electrum is one of the oldest brands known to store various kinds of crypto money. If you plan to change the installed PC, you only need to reinstall the software on the new PC and then enter the Seed (random word string) generated at the beginning of the wallet creation.
Blockchain.info
Blockchain.info, with 100 million completed transactions of 15 million users, is arguably the most popular cryptocurrency wallet available. The reason why Blockchain.info is popular is because the system is transparent. This Hot Wallet can provide multiple security layers and is resistant to account hacking actions.
Cold Wallet Bitcoin
Trezor
In a short time, Trezor has become one of the safest and most trusted Cold Wallet. For Bitcoin users who have plans to invest large amounts of money in crypto, it is advisable to use Trezor. This Cold Wallet is shaped like a very small digital calculator, equipped with a built-in screen that displays pins and other sensitive information, making it not complicated to travel.
Ledger S Nano
Besides Trezor, Ledger S Nano is a Cold Wallet that offers superior security and sophistication. This hardware wallet offers a sleek and trendy design, and has a screen to see Pins like Trezor. The advantages, the Ledger S Nano uses the Chrome Ledger application itself which authenticates and authorizes transfers.
Which Wallet Needed?
If you plan to trade or just know crypto, and are not ready to buy a more expensive form of storage protection, you can use Hot Wallet. Conversely, Cold Wallet is used for those of you who are serious about crypto investment, because they have
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