Hot Wallets
Intro Paragraph:
A Hot wallet is a virtual currency that is an accessible online wallet. A Hot wallet is also used for crypto currencies transactions between the owner of the Waller and the person receiving the crypto. You can also store more than just crypto in a Hot Wallet you can store private keys stored on a program connected to the internet.
What is the difference between a hot Wallet and Cold wallet?
There are a lot of differences between the wallets. We will first talk about the price of having one of these wallets. Hot wallets are usually free but sometimes you have to pay interest on stored cryptos but cold wallets require a purchase of an external device and those cost around 50$ to 250$. Another big difference that I find really important is that a hot wallet is more convenient to access and use for trading but cold wallets are better for long term storage. The final difference that I find important is the ease of transfer to exchanges. Hot wallets are extremely good at transfer to exchanges; they are easily accessible because they are already connected to the internet. But Cold wallets are just average at this they require you to connect to the internet through a USB, Wifi or a QR code.
Hot Wallet security problems
An important Issue that Hot Wallet experiences is that they have a lot of security issues. An example of this hacking that they experience is bottleneck system hacking. This is when the likelihood of message interception and online spoofing goes up. If your username and password fall into the wrong hands then all of your virtual funds can be stolen from your wallet. To prevent this from happening you should have small amounts of money in your Hot Wallet.
Best Hot wallets to buy and why?
One of the best hot wallets to buy is the Coinbase Wallet. This is one of the best wallets to buy because Coinbase is a leading crypto exchange and they offer three different types of wallets. They offer an exchange hot wallet, two different types of dApp Wallets. Another wallet that is a good Hot Wallet is the Cypto.com DeFi wallet. This is a good wallet because it is another website that is leading in crypto exchange. This wallet is also helpful because it is easily accessible to buy and sell crypto. This wallet also supports 800 types of crypto assets including popular stablecoins and the top 20 cryptocurrencies by market capitalization.
Sources:
“Crypto Wallet Market Size, Share & Trends Report, 2022-2030.” Crypto Wallet Market Size, Share & Trends Report, 2022-2030, https://www.grandviewresearch.com/industry-analysis/crypto-wallet-market-report.
“Crypto Security - Secure Cryptocurrency Exchange.” Deep Secure, https://www.deep-secure.com/cryptosecurity.php.
Pompliano, Anthony. “Not Your Keys, Not Your Coins.” Not Your Keys, Not Your Coins - by Anthony Pompliano, The Pomp Letter, 19 Aug. 2022, https://pomp.substack.com/p/not-your-keys-not-your-coins.
Powell, Farran. “Best Crypto Wallets of January 2023.” Forbes, Forbes Magazine, 17 Jan. 2023, https://www.forbes.com/advisor/investing/cryptocurrency/best-crypto-wallets/.
“Hot Wallet.” Corporate Finance Institute, 9 Jan. 2023, https://corporatefinanceinstitute.com/resources/cryptocurrency/hot-wallet/.
About the author: Dalia writes about crypto security for NerdWallet. She has a B.A. in science & technology studies and critical theory from Wesleyan University. Read more. “Crypto Hot Wallet vs. Cold Wallet: What's The Difference.” NerdWallet, https://www.nerdwallet.com/article/investing/hot-wallet-vs-cold-wallet.
Frankenfield, Jake. “Hot Wallet: Definition, Types, Examples, and Safety Tips.” Investopedia, Investopedia, 3 Nov. 2022, https://www.investopedia.com/terms/h/hot-wallet.asp.
By: Fysher Rowan