In the cryptocurrency circle, 'asset security' is more important than your ability to make money.
Many newcomers to the circle do not understand 'hot wallets' and 'cold wallets', their respective characteristics and value. Today, let's talk about hot and cold wallets.
What is a hot wallet?
All exchange wallets (e.g., OKEx wallet, Binance wallet, etc.), including third-party wallets like MetaMask.
Advantages of hot wallets: Convenient for trading, instant buying and selling, suitable for frequent operations.
Disadvantages: Hot wallets require an internet connection, posing a risk of being hacked, including instances of platform bankruptcies and small transactions going missing; the probability is lower for large exchanges.
What is a cold wallet?
A hardware device that does not need to be connected to the internet, completely offline (e.g., Ledger, Trezor).
Advantages of cold wallets: Private keys are not exposed to the network, the risk of theft is extremely low.
Suitable for large assets that are not frequently moved; not very convenient for frequent trading.
The most fatal misconception about cold wallets
Storing the private keys of a cold wallet on your phone, including screenshots.
If the cold wallet is stolen, you won't have anywhere to inquire. A hot wallet is like a bank; if money goes missing, you can contact customer service or the bank, while a cold wallet is like a bank you run yourself.
Security is 1, wealth is the zeros that follow. Without 1, no matter how many zeros come after, it has no meaning.
Many newcomers to the circle do not understand 'hot wallets' and 'cold wallets', their respective characteristics and value. Today, let's talk about hot and cold wallets.
What is a hot wallet?
All exchange wallets (e.g., OKEx wallet, Binance wallet, etc.), including third-party wallets like MetaMask.
Advantages of hot wallets: Convenient for trading, instant buying and selling, suitable for frequent operations.
Disadvantages: Hot wallets require an internet connection, posing a risk of being hacked, including instances of platform bankruptcies and small transactions going missing; the probability is lower for large exchanges.
What is a cold wallet?
A hardware device that does not need to be connected to the internet, completely offline (e.g., Ledger, Trezor).
Advantages of cold wallets: Private keys are not exposed to the network, the risk of theft is extremely low.
Suitable for large assets that are not frequently moved; not very convenient for frequent trading.
The most fatal misconception about cold wallets
Storing the private keys of a cold wallet on your phone, including screenshots.
If the cold wallet is stolen, you won't have anywhere to inquire. A hot wallet is like a bank; if money goes missing, you can contact customer service or the bank, while a cold wallet is like a bank you run yourself.
Security is 1, wealth is the zeros that follow. Without 1, no matter how many zeros come after, it has no meaning.