After buying crypto we need safe storage to store the crypto, there are different variants of storage in the market known as hot or cold wallets. Using these storages, you can hold your cryptocurrency securely and safely for a long time. You can save crypto by using two approaches: the first is online and the second is offline.
Let’s discuss what is the difference between online (hot) and offline (cold) storage and which one is best.
What Is Hot Storage
Hot storage means storing your crypto on the internet using different crypto wallets like MetaMask, Coinbase Wallet, Trust Wallet, and Edge Wallet. All these wallets provide a high level of security without involving the centralized authority which means you can fully own these wallets. It attracts the most users because it is easy to use. You just need to log in to your account and you would be able to send, receive or manage cryptocurrency.
How does it work? You just need to log in to your wallet, after successful login you can send or receive crypto. For further details visit Step by Step Guide to Get Hot Storage.
Risk To Hot Storage
There are various risks that could be happened with hot storage, always consider these risks before storing your crypto by utilizing the hot wallet:
- Hot storage store crypto on the internet which means it could be vulnerable to cyber-attacks. Although it is secure, ensuring 100% security is an illusion. On the internet, there are bad and good guys. The bad guys always try to find the vulnerability in any specific application, if they succeeded to find the loophole in any specific service, they can break it and could be able to steal your all crypto.
- Hot crypto wallets are a kind of application, it always works on a public-private key for authorization and authentication. In case the key is stolen it may lead to a big loss.
- Phishing attacks, social engineering, and ransomware are the biggest threat to hot storage.
What Is Cold Storage
In this type of storage, we keep cryptocurrency by using USB and hard discs, which is often referred to as an offline wallet. Due to less connectivity to the internet, there is less likelihood of a cyberattack. Most investors avoid this because it’s not easy to use and takes more effort and time to manage crypto than hot storage.
If I talk about security, the data is still at risk because each technology comes with weaknesses. Here the biggest risk to data is disc corruption or hardware theft. Examples are Paper wallets, physical bitcoins, and secondary storage devices.
How does it work? You just need to connect the cold wallet device to the laptop or desktop, after a successful connection you need to enter the pin to log in. After successful login, you can send or receive crypto. For further details visit Step by Step Guide to Get Cold Storage.
Risk To Cold Storage
There are various risks that could be happened with cold storage, always consider these risks before storing your crypto by utilizing the cold wallet:
- Disc corruption is one of the major threats to cold storage, in case of disc corruption you may lose all crypto.
- Hardware could be stolen.
- It might remove the stored data.
Which Storage Is Best to Store the Crypto
Cold storage is better and more secure than cold storage, but it is difficult to manage the crypto using cold storage when you need to send or receive crypto daily. It is a time taking process to connect the cold wallets with your devices to manage the crypto. To get rid of this hassle most investors use cold wallets due to their compatibility and ease.
Crypto storage (cold wallets and hot wallets) is used to store cryptocurrency to hold it securely for the long term. Hot storages are easy to use but less secure than cold wallet because they could be vulnerable to cyber-attacks. Here are some examples of hot storage (MetaMask, Coinbase Wallet, Trust Wallet, and Edge Wallet) and cold storage (USB and hard disc).