Crypto Wallet Differences

Hot Wallets

Hot Wallets are simply defined as Wallets that are placed online. These wallets are considered the least secure. This is because the wallets are always online through a central entity (like coinbase) which makes them susceptible to being hacked. Generally, these wallets are very convenient for receiving and sending cryptocurrencies on a regular/daily basis. Many people use these wallets similar to a wallet you carry your cash in. It does not carry your entire bank account but holds enough for you complete your daily tasks.

Hardware Wallets

Hardware Wallets are wallets that are kept on your computer. These wallets are considered the second safest. These Wallets are less convenient as you can not carry your currency with you on your phone. These wallets can be backed up on the computer or on an external hard drive. It is always recommended for you to Encrypt these wallets. If these wallets are not encrypted, a hacker could take control of your computer and easily steal your CryptoCurrency.

With Hardware Wallets, you should always store your encryption codes offline and backup your wallet with an external hard drive.

Cold Wallets

Cold Wallets are considered the safest forms of CryptoCurrency Storage as your coins are stored offline. There are various forms of CryptoCurrency Cold Wallets such as Ledgers and Paper Wallets. These wallets can have varying levels of security to help prevent hacking while sending CryptoCurrencies and/or accessing your Wallet account. Like every wallet, it is always recommended to write down your private keys and encryptions and store them in a safe place online. Many people use this type of wallet to store the majority of their CryptoCurrency Investments.

It is worth noting that no wallet is completely hack proof, but staying up-to-date on CryptoCurrency Wallet practices helps you make the best decision to maximize your CryptoCurrency Investment.

This blog is an educational piece for CryptoCurrency Users, to better understand the differences of the three major types of CryptoCurrency Wallets. This blog is to simplify and help Users make a better decision of how to secure your CryptoCurrencies. This blog is not Security Advice but rather the opinions and experiences of Crypto Masternode Analytix and an encouraging step for users to research what is best for their CryptoCurrency Investments.