What is difference between Hot & Cold wallets

1. Difference between “Hot & Cold Wallets”.
What is a Crypto Wallet?
In short,a crypto walletisatool thatyou can use to interactwitha blockchain network.There are
variouscryptowallettypeswhichcanbe dividedintothree groups:software,hardware,andpaper
wallets.Dependingontheirworkingmechanisms,theymayalsobe referredtoashot or coldwallets.
Hot Wallets:

2. A hotwalletisa tool that allowsusto receive andsendtokens.Unlike traditional currencies,there are
no dedicatedbanksorphysical walletsthatcanbe usedto keepcryptocurrencyholdingssecure.Crypto
currencywalletsare toolsthatare commonlyusedtostore and protectthese holdings,andtheycome
inmany differentformsandvarieties.One of the mostpopularkindsof cryptocurrencywalletsiscalled
a hot wallet.The difference betweenahotwalletanda cold walletisthathotwalletsare connectedto
the internet,while coldwalletsare not.
Security:
Hot Walletsare lesssecure because these are connectedtointernet.The safetyandsecurityof ahot
walletalsodependsuponthe user'sbehavior.Anyitemsstoredinahotwalletare vulnerable toattack
because the publicandprivate keysare storedonthe Internet.Professionalcryptocurrencyinvestors
keepa small amountof theirholdinginhotwalletsbecauseof it'slesssecurity.
Best Hot Wallets:
 BlockchainWallet
 Coinbase Wallet
 Trust Wallet
Cold Wallets:

3. ColdWalletsare physical devicesthatstore cryptosinside of them.ColdWalletshave noconnectionto
the Internet.Because these are offlinesothereforemake resistenceagainsthackingattempts.That's
whyit ismuch saferthan Hot Wallets.Thismethodissuitable forlong-terminvestorsor"Hodlers."
Security:
ColdWalletsstoresthe private keysinanofflineenvironment.Any transactioninitiatedonline is
temporarilytransferredtoanoffline walletkeptona device suchasa USB, CD, hard drive,paper,or
offline computer,whereitisthendigitallysignedbeforeitistransmittedtothe online network.Because
the private keydoesnotcome intocontact witha serverconnectedonline duringthe signingprocess,
evenif anonline hackercomesacrossthe transaction,s/he wouldnotbe able to accessthe private key
usedforit. Inexchange forthisaddedsecurity,the process of transferringtoandfroma coldstorage
device issomewhatmore burdensomethanthe processfora hot wallet.
Best Cold Wallets:
 LedgerNanoX:

4. Ledger’slatesthardware wallet,the Nano Xiscurrentlythe bestcoldstorage walletavailable inthe
market.Ledgerdesignedthisdevice tomake iteasierforpeopletostore Bitcoinanda host of other
crypto currencies.The userinterface issimple,makingiteasyforlesstechnical peopleto use.
Settingupthisdevice iseasyandcan be done viaan iOSdevice,Android,orcomputer.The Bluetooth
connectiononthe LedgerNanoX has an end-to-endencryptedforyourprivacy,makingitvirtually
impossible forsomeonetohackyour coldstorage wallet.
 LedgerNanoS

5. Thisis the olderversionof the NanoXdevice.The LedgerNanoS isone of the cheapestcoldstorage
walletscurrentlyavailable.Itoffersalmostthe same levelof securityasthe NanoX.Similartothe Nano
X; thisdevice alsosupportsBitcoinandoverathousandothercryptocurrencies.Thus,itisideal for
people thatwishtoinvestina wide range of cryptocurrencies.
The Nano S coldstorage walletisshapedlike aUSB flashdrive andcan be usedon mobile phonesand
computers.The physical buttonsonthiswalletincreasesecurityastheybothhave to be pressedbefore
an orderis confirmed.Thus,the physical securitymakesitimpossible forhackerstoaccessyour Bitcoin
wallet.

6.  Trezor T
Trezor T isthe secondgenerationcryptowalletdevelopedbyBitcoincompanySatoshiLab.The device is
knownforofferingahighlevel of security,extrascreenprotection,andtransaction verification.
Withthe TrezorT device,usersgetahighlevel of security,includinga12-wordrecoveryseed.Incase of
your hardware walletbeingstolen,youcanquicklyrecovereverythingona new device.