When it comes to storing your cryptocurrency, one of the most important decisions you’ll make is choosing the right type of crypto wallet. There are two main types of crypto wallets: Hot and Cold.
In this article, we’ll compare and contrast these two types of wallets and outline the 7 key differences between them, so you can make an informed decision about which one is right for you. Whether you’re a seasoned cryptocurrency investor or just getting started, it’s important to understand the pros and cons of each type of wallet. So, let’s dive in!
| Hot Wallet | Cold Wallet | |
| Definition | An online wallet that is accessible through the internet. | A wallet that is not connected to the internet and stores private keys offline. |
| Accessibility | Accessible from anywhere with an internet connection. | Accessible only through a physical device. |
| Convenience | Easy to use and accessible from anywhere. | Requires additional steps to access funds, such as plugging in a hardware device. |
| Security | Vulnerable to hacking attempts because it is connected to the internet. | More secure than hot wallets because it is not connected to the internet. |
| Control of Private Keys | The private keys are stored on the server of the wallet provider. | The private keys are stored on the hardware device or paper and under the control of the user. |
| Examples | Blockchain.info | Ledger, Trezor, paper wallets |
| Suitability | Ideal for small amounts of cryptocurrency and for people who want to use it for everyday transactions. | Ideal for large amounts of cryptocurrency and for people who prioritize security. |