Hot wallet – how to select a suitable cryptocurrency wallet

hot wallet
Cryptocurrency wallets are used to store cryptocurrencies. They can generally be divided into two basic groups: the online “hot” wallet and the offline “cold” wallet. The difference is simple – hot wallets are connected to the Internet, while cold wallets are not. Most people who hold digital assets use both types of wallets because they are designed for different purposes. We can divide a hot wallet into the web, software, and mobile wallets.

Hot wallet

Hot wallets are designed to access your cryptocurrencies and make instant transactions easily. However, because they are constantly connected to the Internet, they are also vulnerable to a possible hacker attack. Therefore, this type of wallet is not intended to hold a large sum of cryptocurrencies, unless it can offer premium security or insurance of the funds stored there.

Web (online) wallets

This type of wallet is usually one of the easiest and least secure ways to store your assets. They are managed by a third party, which is reposible for the security and operations. So you have to trust this third party that the deposits are sufficiently protected against hackers and / or system failures, because most hot web wallets are not insured.

MyEtherWallet

This online wallet is still among the most popular on the market. It allows the storage of Ethereum, all its forks and ERC-20 tokens. However this wallet may seem confusing, with a somewhat unusual control, and takes some time getting used to. The wallet is fully under your control, and you are the sole person responsible for all your transactions.

Blockchain.com

The first-ever wallet for Bitcoin still holds its share of the market. It is accessible from all browsers and has its own mobile application. It is simple, straightforward and the company does not have access to your funds.

Metamask

Currently the most common cryptocurrency wallet. It allows access to all significant blockchains via a web extension or mobile application. The owner has complete control over their assets and seed phrases.

Platon Wallet

Platon Wallet is the first online wallet to offer the convenience of hot wallet, with the speed of transactions and ease of use combined with insurance of the funds, stored on the wallet, just like a common bank account. On top of that all the systems are secured by top notch security from Broadcom (Symantec). Platon Wallet will also be available in a mobile version soon.

Software wallets

It is a safer way to store your assets. First, you install the appropriate program on your device from the official project website, bitcointalk.org or github.com. You can download the entire blockchain, the so-called full node, but its synchronization can take several hours or days. These wallets then take up a lot of disk space and must be synchronized regularly. The second option is to download only the most necessary information, the so-called light node. The rest is synchronized with the server that contains the blockchain itself. Don’t forget to set a long and secure password. Backing up your wallet, private key, and seed phrase to a safe place is also important of course.

Atomic Wallet

This recently popular multi-purpose wallet supports more than 300 cryptocurrencies and allows you to add and manage ERC20 tokens. In addition, the wallet has several functions that cover anonymity, security, decentralization or cryptocurrency exchanges integration directly in the wallet.

Exodus

This desktop wallet has an excellent design and a high degree of security and protection of private keys. In addition, it allows you to work with multiple cryptocurrencies and swap them directly in the wallet.

Electrum

Electrum belongs to the light group of wallets. Therefore, it does not download the entire blockchain but only the necessary information, so it synchronizes in tens of seconds, at most minutes. Recently, however, the wallet has been struggling with hacker attacks.

Mobile wallets

Mobile wallets work on a similar principle as software wallets. You download an application in which the private key is stored in encrypted form. Then, if a mobile phone is damaged, lost or stolen, you can recover your private key on another mobile device using a seed phrase of 12 or 24 randomly generated English words. The advantages of mobile wallets include that you don’t have to download the entire blockchain, and you always have your crypto with you.

Coinomi

Coinomi is a mobile multi-purpose wallet where you store cryptocurrencies under a single “seed”. You can then perform cryptocurrency exchanges directly in the application according to the current exchange rate. Your IP address is encrypted, and you hold a private key.

Trust wallet

Trust Wallet is the official mobile cryptocurrency wallet of the Binance exchange. It does not store private keys anywhere online, making it one of the most secure wallets. A seed phrase consisting of 12 English words is used to renew your wallet. The wallet boasts an austere environment, support for many cryptocurrencies, and WalletConnect and Binance DEX features.

Conclusion

The choice of wallet thus depends purely on your preferences. An online (hot) wallet is a clear choice if you use cryptocurrencies for regular payments and purchases. However, it is essential to note that these wallets should not be used to store a large amount of cryptocurrencies due to their hackability and also in most cases no insurance of funds stored there. Keep in mind that your currency’s safety and maximum protection must always come first.

Leave a Reply

Your email address will not be published.

Are you new to the world of digital currencies?

Schedule a half-hour consultation.

Schedule a consultation