What Is the Difference between a Hot Wallet and a Cold Wallet for Storing Cryptocurrency?
A hot wallet is connected to the internet, offering convenience and quick access for trading and transactions. Examples include mobile, desktop, and web-based wallets.
However, this online connectivity makes them more vulnerable to hacking and theft. A cold wallet, such as a hardware wallet or paper wallet, is stored completely offline.
This makes it immune to online attacks and is considered the most secure way to store large amounts of cryptocurrency for the long term, though it is less convenient for frequent access.
Glossar
Hardware Wallet
Meaning ⎊ A Hardware Wallet is a physical electronic device specifically engineered to store a user's private cryptographic keys in an offline, secure element, isolating them from internet-connected computers and potential malware.
Cold Wallet
Security ⎊ A cold wallet represents a high-security method for storing cryptocurrency private keys by keeping them offline, completely disconnected from the internet.
Hot Wallet
Storage ⎊ A hot wallet is a cryptocurrency storage solution where the private keys are created, stored, and managed on a device or server connected to the internet.
Wallet
Custody ⎊ This refers to the secure management of the private keys that control access to the underlying cryptographic assets held by the user or entity.
Paper Wallet
Asset ⎊ A Paper Wallet is a form of cold storage where the cryptographic key material, specifically the public address and private key for a cryptocurrency asset, is printed onto a physical document.