What is a cold wallet?

A cold wallet refers to a wallet where your private key cannot be accessed from the Internet, it is the wallet that is totally offline. It is the safest option for cryptocurrency storage, especially for those long-term holders.

What is a hot wallet?

A hot wallet is a software wallet that stores public and private keys online. You can access it through your computer or smartphone when connected to the internet. Hot wallets are more convenient for daily use as you don't have to plug them in and out to use them – you just need an internet connection.

Which wallet is better for You?

There’s no right answer to this question. Your needs and preferences determine which wallet is better for you. The hot wallet is suitable for someone who makes crypto transactions regularly. A cold wallet is more ideal when a crypto holder makes few transactions.

What happens if I Lose my cold wallet?

If you lose your cold wallet, you can still use a recovery phrase to access your keys, though you’ll need to purchase a new hardware device or plug the phrase into a compatible software wallet. With both methods, if you lose track of your recovery seed phrase, you may lose access to your wallet permanently. Image courtesy of Coinbase.