Topic: [Crypto Wallets] Cold and Hot Wallets and their Approach - page 2. (Read 398 times)

History:

The Concept of the EFTS was a next step to evolution of money and trade system and it was introduced in 1978 and a first ever web based ETF was introduced in 2004. In 2009 a unique concept by the Satoshi Nakamoto of World wide currency fully decentralized and fixed supply changed the concept of the Money and its flow in 2022.

Digital wallets are the software programs or electronic devices used to store the electronic funds and access online services & transactions. Digital wallets were develop to explore the new era of trading and transparency. Digital Money & Wallets made the access of world wide IOT services accessible easily. E-commerce is the majour application of digital wallets. Crypto changed the whole concept of money application of digital money and storage.

Crypto Wallets:

Crypto wallets are the more advanced form of digital wallets where a device or protocol is used to store public and private keys for storing different types of cryptocurrencies. Crypto wallets are more functionally enhanced as you can access encryption and signing capabilities.
Simply a crypto wallet address/ public key is combination of alphanumeric characters from 27 to 37 ranges.

Terms used in Crypto Wallets Encryption:

Private Key, Public key both of these terms are used on the crypto network to perform transaction a public key allow the user to receive funds and private key allows to access the encrypted funds on the public key.
Types of Crypto Wallets: Basically there two type of crypto wallets on the basis of their utility as Cold Storage Wallets and Hot Storage Wallets.

Cold Storage Wallets:

These are the highly secure personalized wallets used to store the crypto currencies preferred by the users as for storing the long term crypto investments. All hardware wallets are cold wallets as these wallets are offline wallets due to this feature these wallets are considered as most secure type of wallets.

Hardware Wallets are example of Cold storage






Pros and Cons of Cold Wallets:

Cold Wallets provides the maximum possible security to the funds as user require. These wallets allow full efficient environments to make all possible secure investments.
These Wallets are expensive maximum users who own a little funds cant afford them. As these are used as primarily for storage you cant trade with them.


Hot Storage Wallets:

Hot Wallets are used by the traders for making quick and time to time transactions with the market. These wallets allow the users to access different types of services on the block chain rather than assets transfers as decentralized finance & tools. NFTs, MetaVerse & Staking etc.
All type of these hot wallets are same in some properties but the major difference between them is the control on the assets in Self-Custody users manipulates its funds accordingly but on the exchanges offered wallets funds are managed and controlled by the Exchanges ( Not recommended for stroing crypto) . Common point is used for trading and accessing crypto related services using instant crypto.

Mobile, Desktop & Web Wallets are types of the Hot wallets



Pros and Cons of Hot Storage wallets:

These wallets are cheap even free to use, user can access trading as its primary feature. Users can explore the the crypto services and access decentralized finance and other technologies as the meta verse and NFts
These wallets cant be used to store large amount of funds as there are so many security issues with them. For safe investments these wallets are non recommended.


Note: This information related to the products has been taken from different blogs the graphics i have used all have the refer link or source mentioned. This post is for the information superpose to guide the new users to choose the best and avoid scams. There is no plagiarism as after my own experience and analysis i made this list.