Hot and cold crypto wallets are two types of cryptocurrency storage solutions that differ mainly in terms of accessibility and security:
1. 👉Hot Wallets:
- ♦️ Definition:These are cryptocurrency wallets that are connected to the internet.
- ♦️ Accessibility:Hot wallets are easily accessible, making them convenient for frequent trading or transactions.
- ♦️Security:They are more vulnerable to hacking and other cyber threats because they are online.
-♦️ Examples:Mobile wallets (e.g., Trust Wallet), web wallets (e.g., MetaMask), and exchange wallets (e.g., Binance).
2. 👉Cold Wallets:
- ♦️Definition: These are cryptocurrency wallets that are kept offline.
- ♦️Accessibility: Cold wallets are less convenient for daily transactions as they require manual steps to connect to the internet.
-♦️ Security: They are considered much more secure because they are not susceptible to online attacks.
-♦️ Examples:*Hardware wallets (e.g., Ledger, Trezor), paper wallets (physical printouts of private keys), and air-gapped computers.
For day trading on platforms like Binance, you might use a hot wallet for quick access and transactions, while keeping the bulk of your holdings in a cold wallet for better security.
