Cold and hot wallets

💼 A crypto wallet is a tool (“shell”) with a familiar and user-friendly interface that can be used to communicate with the blockchain network.

🔥 A “ hot “ wallet is any type of wallet that is connected to the Internet.

For example, when you create an account at an exchange and send funds to your account, you make a deposit to the exchange’s “ hot “ wallet.

This type of wallet is quite easy to set up, and also provides quick access to your balance, which makes them convenient for traders and other regular users.

“Cold” wallets do not have an Internet connection. Instead, they use a physical medium to store the keys offline, making them resistant to hacking. Thus, this type of wallet is a more secure alternative for storing your coins.

This method is also known as “cold storage” and is particularly suitable for long-term investors (holders).

Each type of wallet has its own advantages and disadvantages, so it is very important to understand how they work before moving on to using them.

Decimal helps communities to issue and manage blockchain assets.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store