Deciding on what you think is the best cryptocurrency is only the start of investing in crypto. You still need a place to safely accommodate the currency you bought or mined, and thus, you’ll need a crypto wallet and storage device. Some may offer a bit more features than the others which could swing a certain provider in your favor, so it makes sense to always compare your options before choosing.
Hot Wallets and Cold Wallets are often used to differentiate the two main crypto wallet types. To put it simply, hot wallets tend to be digital storage, while cold wallets are physical storage devices. There may be other types that could fall in-between but these two types are the most common ones.
Hot Wallets tend to come in both online and desktop options. Their main perks are that they’re capable of holding any cryptocurrency type, and that they are often free to use. This is often advantageous for people looking to hold more than one type of cryptocurrency at the same time.
On the other hand, cold wallets can’t be cheaper than hot wallets since they’re actual physical devices. This means that you can literally take all your currency with you into one storage device. They’re small and compact so it’s easy enough to store. Unfortunately, most cold wallets are more expensive, with cold storage devices costing around the US $100 mark. It will also depend on how much crypto coins you need to store on the device. They’re also a bit lacking in flexibility, only being able to store the most common coins.
However, cold wallets are easier to secure than hot wallets. Hot wallets, being digital entities, store all your keys and codes in their servers, making it vulnerable to hacking and scamming attempts. Sure, reputable digital wallets do place security measures in place but should a service be compromised, all your investment will go down with it. Also, despite their higher price tag, some cold wallet options have built-in security options to protect your investment from keyloggers and malware if you ever plug it into a compromised computer.
Ultimately, finding the best cryptocurrency wallet for your specific circumstances is also up to you. Maybe you like the free, digital options and don’t really like the notion of paying a lot for a storage device. On the other hand, you may want to pay for the added security, making cold storage a lot more appealing.
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