Newbies: Crypto Storage Solutions
As a newbie it’s possible you must have come across Hot & Cold Wallet and you have wondered what they are? What options do you have in choosing where to store your coins?
Well obviously you know that cryptocurrencies are not physical and you can’t have them stored physically in a vault, or your cash wallet so they have to be on a wallet compatible to cryptocurrencies not your regular cash wallet you know.
Hot & Cold Wallets are also online and offline wallets.
Hot Wallets are wallets that are connected to the internet and is the most accessible and most common wallets used by most people. As long as your wallet has access to the internet they are at a very high risk of being hacked and stolen.
While Cold Wallets on the other side are wallets that are not connected to the internet, it has no access to the internet whatsoever. Because of the inaccessible nature of the wallet to internet, this is usually suggested to be the best wallet to store your wallet. To access your cold wallet you need a private key. These private keys are known by you and you alone.
If you will like to know what Private Keys/ seed phrases are and how to keep them safe you can check What are seed phrases: Not Your Keys Not Your Coins and look for @onealfa.leo comment on the post. It was really wise and helpful.
Cold wallets come in form of USB drives and typically hardwares that you can see, feel and touch. But it’s important to know that when buying a cold wallet, you buy from a reputable source for maximum security.
From observation based on the type of wallets to used, lots of people especially the ones that have cryptos that worth a lot , store their coins on a cold wallet for maximum security. But use Hot Wallets for making fast and easy transfer and trades. So they practically use hot wallets only when trading and exchanging.