Blockchain 101 Episode 39 – Cold wallet vs hot wallet

Depending how you store your private key, Bitcoin wallets can be differentiated into cold or hot wallets. Cold wallets are stored offline, not accessible through the internet. They use devices that aren’t connected to the internet to ensure the private key’s safety, such as the private key written in a notebook.

Cold wallets avoid the risk of being hacked but it is not safe from physical dangers, such as being stolen or broken. Hot wallets allow you to access your private key online. Essentially, they are online wallets.

It’s better to set different passwords for different platforms when accessing hot wallets. Always enable two-factor authentication to ensure the safety of your cryptocurrencies.

Whether you are using cold or hot wallets, people can steal your Bitcoin when they get hold of your Bitcoin private key. Remember, whoever holds the private key is the owner of the Bitcoins.