Basically, there are a number of hurdles to jump on the pathway of becoming a crypto user. The daunting part of a crypto user is to select the best crypto wallet to store the cryptocurrencies.
In this cryptocurrency wallet development there are many different options to select from when it comes to securing digital assets. It can be confusing and stressful for users trying to decide which method to use.
There are two ways to store your cryptocurrencies. One is the hot wallet storage, and the other is the cold wallet storage. It is imperative to decide between both the wallets because each wallet has its own pros and cons, so make the right choice.
What does hot and cold wallets mean?
The imperative difference between these two wallets is the internet. The hot wallet is connected to the internet while the cold wallet is kept offline.
The funds stored in the hot wallet are easily accessible than the funds in the cold wallet.
Hot wallets are commonly used among crypto users. There are many popular hot wallets for the ethereum network that works on your web browser, such as MyEther wallet.
The installation of a hot wallet is very simple. All you need is to download a wallet to your desktop or your mobile phone, and that needs to stay connected with the internet.
Most of the exchanges utilize hot wallets because they allow users to access their funds instantly. However, it is also a risk if you are storing all your funds on an exchange. As this wallet is always connected to the internet, it might be targeted by malicious individuals and hackers.
Cold wallets are best for users who do not often use cryptocurrency assets. Some users don’t use crypto assets on a daily basis and for those, it is best to store them offline in a cold storage wallet.
There are different types of cold wallets, such as hardware wallets and paper wallets. As the name implies, hardware wallets are external devices like ledger nano S or Trezor that store your private keys. The funds stored in the hardware wallet are accessible as long as you have access to the wallet. The wallet is accessed with a password or a pin.
A paper wallet is a print out copy of private keys and public addresses on a sheet of paper or another material. This becomes a risk if you lose the paper. Anyone could easily access your funds with that printed paper.
Which type of wallet is best?
The answer is quite complex because every crypto user needs to evaluate their requirements. If you are planning to execute big trades in the near future, you can consider a hot wallet. Same way, if you want to store your crypto assets for a longer period, then choose a cold wallet. If you are going to do a bit of both, then store cryptos in both hot and cold storages.
We have covered the debate of hot wallet vs. cold wallet by giving essential pros and cons for both wallets. Be sure that you use the information acquired here to pick the best multi cryptocurrency wallet which will serve you for many years to come.