Hot Wallet vs Cold Wallet: Which Wallet You Should Choose?

There is a meteoric rise in the number of people who use and invest in cryptocurrency and the underlying blockchain technology. This wrecking ball of the virus has made more people turn towards cryptocurrency trading and other altcoin investments while they are staying at home.

Right now, a lot of people are considering crypto trading as an alternative source of income. With such a level of increased adoption of cryptocurrency, people tend to choose a crypto wallet without considering in-built features in it. So, before you decide to create a cryptocurrency wallet, here are a few things to know about crypto wallet and their security features. 

What is a Crypto Wallet?

A Crypto wallet is a tool you can use to interact with a blockchain network. The different types of wallets are:

  1. Software Wallet

  2. Hardware Wallet

  3. Paper Wallet

Unlike your PayPal or Paytm wallet, which stores the value of the amount you have in your account, the cryptocurrency wallets store your public key and private key information, which will enable you to transact. These public keys are like usernames, and private keys are like your secured password. You can share your public key to receive money and private key to send money.

Based on the way it stores the information and other working mechanisms, it is categorized as a hot wallet and cold wallet.

  • Hot wallet is the one which is connected to the internet

  • Cold Wallet is not connected to the internet.

The software wallet types are web, desktop, and mobile wallets. The hardware wallets are like your external hard disk, which you can plug into the desktop and laptop to transact.

Though, there is no hard and fast rule which will help in 100% wallet security. You need to keep both your system secured with all the necessary updates now and then.

We hope the above-summarized information will help you get an overall picture before you decide on the type of cryptocurrency wallet you need. To develop a fully functional multi-currency wallet, you need a Cryptocurrency wallet development company to advise the best and develop a secured wallet system.

Choose wisely before you invest!

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I am a Business Strategist at BlockchainAppFactory. I also am a passionate blogger who write about Cryptocurrency development & Blockchain technology.

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