Cold Wallet Vs Hot Wallet: Which One Should You Choose?

Cold Wallet Vs Hot Wallet: Which One Should You Choose? If you are starting off as an investor in the world of cryptocurrency, you may have come across the terms cold wallets and hot wallets. There are quite a few options available including online wallets as well as physical wallets.

WHAT ARE HOT AND COLD WALLETS?
The most important distinguishing factor between both types of wallets is internet connectivity. A cold wallet is kept completely offline and is only accessible with explicit authorization at the end of the cryptocurrency holder.

Cold Wallets
If you own a lot of cryptocurrency assets that you do not need to access frequently, using a cold wallet is the best way forward. Nothing compares to the security offered by a cold storage wallet. If you opt for a hardware wallet, it will essentially work exactly like a paper wallet but unlike normal wallets, it is completely secure. You can only access it using a secure private key which acts as a password. You cannot access your cryptocurrency cold storage wallet without it.

Hot Wallets
While Bitcoin cold storage might be far superior when it comes to advanced security. There are quite a few popular options when it comes to hot wallets that work safely but they do not have the same amount of protection that cold wallets can offer. However, you do not need access to any hardware to access your data at any time which is what makes hot wallets so popular.

WHICH ONE SHOULD YOU CHOOSE?
There is no clear-cut answer to the question as each has its advantages. However, online data breaches are at an all-time high, and it is very little you can do to protect yourself from them if you have a hot wallet. If you are someone who will be holding cryptocurrency for an extended period of time, you should definitely consider going for cold storage options.