Bitcoin Wallets: Hot Wallets vs Cold Wallets

[Supreme Donvic]

When you won store bitcoin na for wallet you go store am, now wallets dey grouped into hot wallets and cold wallets based on their internet connection.
Now when you understand the difference between this two wallet en go help you choose the right balance way go good for watin you won use am do.

Hot wallets.
Hot wallet na the one way dey they connected to internet.
For Example:
Mobile wallets (Trust Wallet, BlueWallet)
Desktop wallets (Electrum on an online PC)
Web wallets & exchanges (Binance, Coinbase)

Advantages of Hot wallet.
1. Hot wallet dey fast and easy to use.
2. Hot wallet good for daily transactions.
3. Hot wallet dey always dey Easily accessible anytime, anywhere.

Disadvantages of Hot wallet.
1. Hot wallet get higher risk of hacking
2. Hot wallet dey very vulnerable to malware, phishing, and exchange failures
E no good to use am store large amounts.

En dey good for Spending, trading, small balances.


Cold wallets.
Cold wallet na the one them dey keep offline.
For Example:
Hardware wallets (Ledger, Trezor, Coldcard)
Paper wallets
Air-gapped devices (offline laptop/phone)

Advantage of Cold wallet.
1. Cold wallet dey get very high security.
2. Private keys no dey near internet and na why e be the best wallet in teams of protection against hacks.

Disadvantages of Cold wallet.
1. Cold wallet dey less convenient for frequent use.
2. Cold wallet dey always require careful backup and if you lose your seed phrase you done lose your money.
3 Hardware wallets dey cost money

En dey good for Long-term holding and storing large amounts.

[Obim34]

~snip

I'm one of those that believe you can store huge funds in hot wallets, regardless if you are unable to purchase hardware wallets.

Getting offline wallets may be a big deal, I can suggest using wallet like Electrum, extract seed phrase, create WOW, afterwards delete wallet and file completely from your device, this way you won't be a victim.

There are also hardware wallets that requires you to connect to an online device, that is why Airgapped hardware wallets are preferred.

Large scale investors are mostly those that goes for hardware wallet, except you are capable of purchasing one.

[Amphenomenon]

Hot wallets.
Hot wallet na the one way dey they connected to internet.
For Example:
Mobile wallets (Trust Wallet, BlueWallet)
Desktop wallets (Electrum on an online PC)

I hope you know both Electrum and Bluewallet both have their  mobile and desktop wallets? There are other wallets of such also.

Cold wallets.
Cold wallet na the one them dey keep offline.
For Example:
Hardware wallets (Ledger, Trezor, Coldcard)

While Ledger is indeed a cold wallets, it is often better to use list other alternatives since this might make others to see them as highly trustworthy as before, since they are not after implementing a cloud option of storing private which his still questionable.

[Big Dirams]

I'm one of those that believe you can store huge funds in hot wallets, regardless if you are unable to purchase hardware wallets.

That's bold of you to make that statement. Although there are way to make hot wallets secure to some extent but that doesn't make it safe and free from threats. I wouldn't encourage anyone to store huge funds in hot wallets but if they must then I advise they use a more reliable wallet and split their funds into different wallets.

[Asiska02]

I'm one of those that believe you can store huge funds in hot wallets, regardless if you are unable to purchase hardware wallets.

That's bold of you to make that statement. Although there are way to make hot wallets secure to some extent but that doesn't make it safe and free from threats. I wouldn't encourage anyone to store huge funds in hot wallets but if they must then I advise they use a more reliable wallet and split their funds into different wallets.

You have a very solid point of view on hot wallets. Due to its conveniency to use, use friendly and simple interface, and the support for many features, it is still encouraged by many to go for. It has good back up options on your seed phrase if it ever gets loss but pose a very high risk because of its connection to the internet. Also due to human error, you risk more losing your funds when there’s a phishing attack which are common like malicious links and fake websites that targets hot wallets.

Hot wallets are not a good dependency wallets for savings, they’re only good for spendings and for easy access interactions. Splitting funds and keeping what you can afford to lose on hot wallets is mostly encouraged due to its risk factor. Hot wallets are just for conveniency that you can access anytime and anywhere but not the best of place to save your bitcoin or you risk putting your funds at risk when you rely on them for long term savings.

[Charles-Tim]

2. Cold wallet dey always require careful backup and if you lose your seed phrase you done lose your money.

This is not true, both hot and cold wallets require careful backup if you want your coins to be safely stored and secure on the blockchain. Any mistake in a way that open door for an attack will affect both cold or hot wallet.

Another thing is that as hardware wallet can be categorize as cold wallet, wallet like Ledger Nano seed phrase can be sent online to backup companies. Is that not an hot wallet already if the seed phrase is divided into 3 and sent to three different companies online.

[Frankolala]

I'm one of those that believe you can store huge funds in hot wallets, regardless if you are unable to purchase hardware wallets.

Hot wallet should only be used to store huge funds for daily transactions or weekly and not long-term savings. A lot of people have lost their funds for storing it in a hot wallet.

Mobile wallets (Trust Wallet, BlueWallet)

Trust wallet is a closed source wallet and it's not safe to store your funds in such a wallet. Electrum and Cake wallet are good mobile open source wallets.

If you don't backup your seed phrase, you will definitely lose your funds if something happens to your phone or you forget your password.

[sokani]

I'm one of those that believe you can store huge funds in hot wallets, regardless if you are unable to purchase hardware wallets.

Nah your money, so you fit do as you like. But to be on a safe side e dey advisable to use hardware device when your fund dey large. Spending extra bucks to buy a hardware device wey you go take keep your funds safe nor be bad thing. With $49 dollars you don buy the least series of Trezor wallet wey be Trezor one.

I hope you know both Electrum and Bluewallet both have their  mobile and desktop wallets? There are other wallets of such also.

Currently, Bluewallet is only available on mobile version.