Posted: 30.06.2021 | 07:54
The Differences Between Hot & Cold Wallet
Hot and Cold Wallet Differences
Cryptocurrency wallets are divided into two as Hot Wallet and Cold Wallet. These wallets are classified depending on whether they are online or offline. Your cryptocurrency can be stored in both cold and hot wallets. The main difference is that the hot wallet is connected while the cold wallet is not connected to the internet. Depending on the purpose of use, these two wallets can be preferred with different motives.
Hot Wallets are stored through online platforms that provide custody services such as Coinpara. It is strongly encrypted and with hot wallets, users can securely store their private and public keys on the platform.
Cold Wallets are preferred by people who want more control over their cryptocurrencies. It provides greater security against digital threats due to not being online. Hot wallets are exposed to hackers, while cold wallets are more exposed to physical threats.
There are two types of cold wallets. The first is the transfer of private and public keys on a piece of paper. Although it provides full protection against hackers, it can be lost or damaged. There are also wallets that are hardware offline. These wallets, which are stored in USB-like tools, allow transactions to be made by connecting to the computer when the need for money transfer arises. It is more difficult to damage than paper, but the problem of hiding still exists.