Hot, Cold, Mobile, Web, Paper Wallets — Understand the Difference

[Ann1989]

Are you looking for a wallet to store your cryptocurrency?

If you want to buy some crypto or you have already purchased some on an exchange, then the next step is researching and deciding the type of wallet you’d like to use to store your coins.

Since hot wallets are connected to the Internet, funds are more accessible for day to day trading or payments, but on the other hand, they’re also more prone to hacking. Examples of hot wallets include exchange wallets, mobile wallets, and web wallets. If you bought your crypto from a centralized exchange like Coinbase, you’re actually using their hot wallet service.

Cold wallets are not connected to the Internet; therefore, any crypto stored in them is hard to use, but on the upside, hackers cannot get to your funds easily. If your intention is to store your cryptocurrency for a long period of time, then look no further than cold wallets. Examples of cold wallets are hardware wallets and paper wallets.

If you wish to know more about the different types of hot wallets and cold wallets, here's a nice explanation: https://medium.com/cobo-vault/hot-cold-mobile-web-paper-wallets-understand-the-difference-90c124fe1a55

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[mersal]

There is already a sticky with more details and what to choose in this section itself.

[General] Bitcoin Wallets - Which, what, why?

Actually we don't need centralized wallets to access funds anywhere, more wallets like electrum are available in the smartphone apps as well.

[hd49728]

[General] Bitcoin Wallets - Which, what, why?

I like it but that topic is lack of categorisation on custodial and non-custodial wallets which you can find in this one
Custodial vs. Non Custodial Wallets - "Not your keys, not your coin" Explained.

Choosing and using good non-custodial wallets are must thing to do in my opinion if one seriously care about fund's security.

[hugeblack]

It is you who choose the type of wallet you want and the amount of protection. It is not black and white, or use hardware wallet only, but rather your knowledge of the best option.

So I think the topic should be about an explanation of the meaning of each word and leave the option to the user to try what he deems appropriate.

I don’t know if you have a connection with @cobo-vault, but I think the main purpose of creating this topic/thread is to promote cobo’s products.
Be careful with this type of ad because it may give false information.

If you take the Cobo Vault as an example, using the Cobo Vault Mobile App and the Cobo Vault, you can start using your funds. Some hardware wallets like the Cobo Vault use QR codes for making transactions ensuring a higher level of security and awareness of what is being transferred.

[odolvlobo]

Since hot wallets are connected to the Internet, funds are more accessible for day to day trading or payments, but on the other hand, they’re also more prone to hacking. Examples of hot wallets include exchange wallets, mobile wallets, and web wallets. If you bought your crypto from a centralized exchange like Coinbase, you’re actually using their hot wallet service.

As you wrote, a "hot" wallet is a wallet that is accessible from the internet. That includes any wallet on your desktop computer, laptop, tablet, or phone since those devices are accessible from the internet.

[pooya87]

it doesn't sound correct to me, to call "exchange wallets and web wallets" as "hot wallets" because for starters the exchange wallets and certain types of web wallets are not even "wallets" they are accounts that you are using where you don't even have access to your own private keys so you don't really own bitcoin, you only own some balance in a centralized database which the company promises to convert to real bitcoin when you withdraw.
i don't think you can even call the web wallets that you own your private key "hot wallets" since it is still accessed remotely and unlike a desktop hot wallet, these wallet can be hacked easier as the access doesn't need your system to be online. it only access them through accessing the server they are stored in.

[o_e_l_e_o]

Agree with pooya above. If you insist on calling exchange and web accounts "wallets", then the only term you should really use is "custodial wallet" - i.e. you don't actually own any coins, and someone else has complete custody over a bunch of IOUs. These are a significant step below even real hot wallets such as mobile wallets in terms of security.

I also completely disagree with OPs assertion that hot wallets are "more accessible" than cold wallets. The difference in time between broadcasting a transaction from an Electrum hot wallet and a Ledger device via Electrum is the time it takes to plug the device in and key in the PIN, so <20 seconds. Even using a fully airgapped machine, I can generate, transfer, sign, and transfer back in less than a minute. The only thing that is "more accessible" is if you are holding your coins on a centralized exchange with the intention of trading, but in that case you are trading security for accessibility.