Should you go hot or cold?
It depends. That’s a very lawyery thing to say but it is true.
The short of it, hot wallets are online crypto platforms. It’s when you don’t have the private keys to your cryptos.
Cold wallet is when you store the private keys to your cryptos in a hardware or device.
Hot wallet is online. Cold wallet is offline.
So, let’s get to the pros and cons.
How wallets are meant for everyday cryptocurrency users.
As hot wallets are connected to the internet, you can seamlessly make crypto transactions with the clicks of a few buttons on your phone or computer.
It’s easy to set up and you are not supposed to worry about security. The exchange is in charge of protecting your private keys.
They have one major drawback: security.
Storing a large amount of digital assets in a hot wallet, such as a web wallet or a mobile wallet, is not advisable as it leaves your funds exposed to potential security threats, such as cyber theft.
Cold Wallets, on the other hand, are considered the more secure option. You only connect your cold wallet to the internet when you want to make a transaction.
Cold wallets use a physical medium — typically in the shape of a USB stick — to store the wallet’s private keys, making them de facto unreachable to hackers or other malicious parties.
The main drawback is that they are impractical for everyday crypto usage as it is harder to send crypto from a cold wallet.
So, which one is for you?
Those who plan to “HODL” Bitcoin, they choose to put their private keys into a cold wallet.
Active traders gor for hot wallet.
Or you can choose both with My Digital Money. It’s a combination of both. My Digital Money stores your private keys offline. That protects it from hacks but we are here to be of assistance in case you need to access your coins to trade.