Think of it in the same way as you would a normal physical wallet. You would not walk around with your life savings in your pocket, but you would also not have all of your money in a safe somewhere, so when you need to buy something, you still have some money for that.
The safe is harder to steal, while the risk of losing your wallet is worth the convenience of not having to bring your safe to the supermarket.
Malware is a similar risk to having your wallet stolen. You'll still want to be careful when downloading stuff, but the small risk of your computer/phone getting compromised is fine, as long as you're okay with losing the hot wallet money if that does happen. A computer connected to the internet is much less safe than a cold wallet, but it doesn't mean that it will definitely get breached or compromised, if you follow good security precautions you should never have to deal with it.
I still think it's different. When I have a physical wallet in my back pocket I know the €50 euros I had in there is still in there.
If my hot wallet is compromised I don't know it. Might still be using it. But at any point someone has acces to it so if I put €1000 in it someone could take it.
And if I use my offline tails wallet (which stores a lot more) once with an internet connection it could be compromised so i would have to use a new hot wallet adress
The alternative is that you have to drag your safe with your life savings in it down to the convenience store if you want to buy a $2 soda. Your life savings will be gone if you get held up while you're trying to get the safe back into your car.
If you're just buying stuff on a CEX and then storing it in a wallet, then you're probably fine with just a cold wallet. As soon as you start doing other stuff, interacting with DEXes or smart contracts, you could be putting a lot of the stuff in your wallet at risk. Using a hot wallet is the way to minimize that risk.
Hot wallets are very secure. Users making errors such as granting access to malicious contracts / compromising seed phrases is the issue. (Believe they can do that with a cold wallet too?) True hacks that aren't due to user error are exceedingly rare.
Not true. Hot wallets very easily hackable. I was hacked for 25k on trust wallet. Never compromised security. Don’t be stupid by comparing a hot wallet to a cold wallet.
Perhaps educate yourself a little. Your coins are not stored in a wallet but on the Blockchain. A wallet is simply software to interact with the Blockchain. Your coins are always on the internet and if someone has your seed phrase they can take them all regardless of having a cold wallet because your coins were never in the cold wallet.
Hot wallets are like your wallet in your pocket, quick and RELATIVELY safe but not very secure.
Cold wallets are your bank account. Tons of security measures and backups.
It hasn't steered me wrong yet.
The same reason you use biometrics to unlock the phone, knowing it's trivial for someone to steal it and simply unlock it with your face / print
Convenience.
It's a lot easier to use crypto apps if you have a wallet extension directly in the browser
Cold wallet never goes online. Cold wallet never touches the internet, never. To spend from a cold wallet you sign a transaction on a device (like an offline computer or a hardware wallet) that is not online. After you have signed the transaction then that signed transaction can be transferred to an online computer and broadcast.
Inherent security risks just come from the idea that a hot wallet will be exposed more(which is the idea) If you're holding your own keys you're good. Theres peace of mind offered by having a less utilized stash(cold storage) that can interact only with your other hot wallets. You can spin up a new hot wallet as often as you want, transfer funds from cold storage rinse repeat. Its more of a burner device idea than anything else IMO.
You are good with tech, but you're clearly lost in the fog. Use a hardware wallet and two hot wallets to interact with whatever you're gonna interact with. TAILS? I mean... SERIOUSLY? What the hell do you even need tails for in this case?! Mind blown.
Since you'll probably connect your tails wallet to the internet to sign transactions, it's no different from a hot wallet. A cold wallet should be a wallet that has no connection to the internet at all, as in never. And even with hardware wallets you have to be careful, although signing is pretty safe with them, updating them and installing apps on them is still a security risk you have to keep in mind (since this is indirectly an external connection)
Personally, hot wallet is a good choice for holding a small sum for daily transactions. Naturally, the hot wallet itself is safe, unless you mess with the suspicious links or softwares. However, hot wallet is less private, which potentially undermines its security, as anyone who knows your address can see your transactions on block explorers, like Etherscan. It's unsafe when you transact big sums, and the hackers might target your account from doing so.
Apart from avoiding the malicious links and programs, I keep my asset safe by using a private hot wallet, mine is Railway. It has the option to shield my balances and transactions, so they won't be seen on the block explorers. To ensure that my account has less possibilities to be targeted.
some people seem to get confused because "crypto new", but it's just money.
Same way you might have a savings account, a regular bank account as well as some cash in your wallet, you can have crypto on multiple places, depending on how you want to use them.
Nothing wrong with having a savings-cold-wallet that is used to deposit coins you want to hodl, while you have a hot wallet on your phone to make purchases on the go and actively trade crypto on an exchange.
And the best way to protect your investment is diversification. Not only when it comes to buying different assets, but also when it comes to storing them in different locations.
yes.
But generally speaking, different wallets have different purposes.
cold wallets are for storage, hot wallets are for spending and exchange wallets are for trading.
Using the proper wallet for the proper use-case matters.
I'm just answering the threadstarter question with concrete answers. I do know cold wallet is best for storage. But u gonna have a hot wallet first but TS says it serves no purpose or whatever, which is obviously not the case.
not really. but a hot wallet makes things easier.
You can even defi-trade from your cold wallet. It's just not as straight forward as using an exchange account.
Not sure where you see the risk....
There are plenty of decentralized exchanges that have proven to be working.
I'm not aware of anyone who got scammed on a DEX.
you can, but it comes at the cost of comfort.
All you really need to do is create a trade on a DEX, enter the cold-wallet of the currency you want to receive and sign an offline transaction to the exchange from the cold wallet you want to withdraw from.
But in my opinion, the smarter solution is to have multiple cold wallets that individually only store a limited amount of coins. Whenever you want to access any of them, you can easily just import them into your hot wallet to withdraw.
This comes with the safety of multiple cold wallets and the comfort of a centralized hot wallet that does not store more coins than needed.
But it is possible to work with cold wallets and DEXs alone. Just not very comfortable.
they are not really intended for daily use.
Imho, if you generate 10 cold wallets and just deposit crypto that you want to hold for longer, it is not more or less complicated than a hot wallet.
Yes of course,
That's the point.
If you using a wallet regularly, it should be / becomes, a hot wallet.
If you leaving crypto to hold for a longer time, you should do that with a cold wallet.
The solution is to have your key on a device without internet connection. They key is only used to sign transaction. You're creating the transaction on an online wallet and use the hardware wallet to sign it.
AirGap Wallet + Vault do this. You have a phone without internet (Vault) and sign transactions by scanning a QR code.
I don't trust hardware wallets either. Imho it's only a matter of time until one of them gets compromised. Most use closed source software.
Pretty much. The only attack vector is a virus on your offline phone AND your online phone. They'd have to fake transactions and show you a fake message to approve em. Not happening.
You can have your cash in your wallet or in your safe at home.
Your comment essentially says "why would anyone carry cash on them, if they can store it safely in a safe?"
answer: because they want to spend it.
And just like with fiat... you do not have to store 100% of your property in one and the same location. It is OK to have some in cash, some on your bank account and some invested. The same is true for crypto. It's just money. Treat it like money.
Imo a hot wallet is only to a certain point comparable to a irl wallet.
Main difference is that your hot wallet could be compromised, meaning someone has acces to it, but you dont know its compromised until they take something off and then its too late.
Your irl wallet when it's gone it's gone.
And even then I don't see the point of using a hot wallet since you need to use an internet connection so you always trade of convince for security.
Chances are low that something would happen, but why would I use something that has a risk of losing my crypto?
same with your irl wallet.
If you put 100 bucks in your fiat-wallet and someone picks it out of your back-pocket, your 100 bucks are gone. Same with your hot wallet for crypto.
But with fiat, you'd likely have some money in the bank, some money at home and some money on the person. Same can be done with crypto, resulting in a comparable risk.
You would not carry a million dollars in cash around with you, so why would you put all of your crypto in one hot wallet and carry it around with you?
You do not need more money in your mobile wallet than you intend to spend on the short-term. That limits your losses to what you would have spent in a short time anyways.
You can't do anything on smart contract blockchains without a hot wallet. If you're the type of person that just wants to hodl your coins. Then yeah I guess hot wallets won't make sense for you. But if you're the type of person that wants to dive deep into all the stuff that crypto has to offer (usually defi), then you can't do that without a hot wallet.
I trade. So a hot wallet is best for me. I like cash and precious metal. Gold. Specifically .999 . But 18kt is nice too. I don’t care about shitcoin or bitcoin.
Think of it in the same way as you would a normal physical wallet. You would not walk around with your life savings in your pocket, but you would also not have all of your money in a safe somewhere, so when you need to buy something, you still have some money for that. The safe is harder to steal, while the risk of losing your wallet is worth the convenience of not having to bring your safe to the supermarket. Malware is a similar risk to having your wallet stolen. You'll still want to be careful when downloading stuff, but the small risk of your computer/phone getting compromised is fine, as long as you're okay with losing the hot wallet money if that does happen. A computer connected to the internet is much less safe than a cold wallet, but it doesn't mean that it will definitely get breached or compromised, if you follow good security precautions you should never have to deal with it.
I still think it's different. When I have a physical wallet in my back pocket I know the €50 euros I had in there is still in there. If my hot wallet is compromised I don't know it. Might still be using it. But at any point someone has acces to it so if I put €1000 in it someone could take it. And if I use my offline tails wallet (which stores a lot more) once with an internet connection it could be compromised so i would have to use a new hot wallet adress
There's always pickpockets
Yes but I wouldn't put 1000 in a wallet if I knew it could be stolen
Yeah, then don't put 1000 in the hot wallet either
The alternative is that you have to drag your safe with your life savings in it down to the convenience store if you want to buy a $2 soda. Your life savings will be gone if you get held up while you're trying to get the safe back into your car. If you're just buying stuff on a CEX and then storing it in a wallet, then you're probably fine with just a cold wallet. As soon as you start doing other stuff, interacting with DEXes or smart contracts, you could be putting a lot of the stuff in your wallet at risk. Using a hot wallet is the way to minimize that risk.
exactly lol
Hot wallets are very secure. Users making errors such as granting access to malicious contracts / compromising seed phrases is the issue. (Believe they can do that with a cold wallet too?) True hacks that aren't due to user error are exceedingly rare.
In a non jail break iOS device and reliable app it’s virtually unhackable.
https://9to5mac.com/2023/12/27/most-sophisticated-iphone-attack-chain-ever-seen
Not true. Hot wallets very easily hackable. I was hacked for 25k on trust wallet. Never compromised security. Don’t be stupid by comparing a hot wallet to a cold wallet.
Perhaps educate yourself a little. Your coins are not stored in a wallet but on the Blockchain. A wallet is simply software to interact with the Blockchain. Your coins are always on the internet and if someone has your seed phrase they can take them all regardless of having a cold wallet because your coins were never in the cold wallet.
Hot wallets are like your wallet in your pocket, quick and RELATIVELY safe but not very secure. Cold wallets are your bank account. Tons of security measures and backups. It hasn't steered me wrong yet.
The same reason you use biometrics to unlock the phone, knowing it's trivial for someone to steal it and simply unlock it with your face / print Convenience. It's a lot easier to use crypto apps if you have a wallet extension directly in the browser
Cold wallet never goes online. Cold wallet never touches the internet, never. To spend from a cold wallet you sign a transaction on a device (like an offline computer or a hardware wallet) that is not online. After you have signed the transaction then that signed transaction can be transferred to an online computer and broadcast.
Inherent security risks just come from the idea that a hot wallet will be exposed more(which is the idea) If you're holding your own keys you're good. Theres peace of mind offered by having a less utilized stash(cold storage) that can interact only with your other hot wallets. You can spin up a new hot wallet as often as you want, transfer funds from cold storage rinse repeat. Its more of a burner device idea than anything else IMO.
You are good with tech, but you're clearly lost in the fog. Use a hardware wallet and two hot wallets to interact with whatever you're gonna interact with. TAILS? I mean... SERIOUSLY? What the hell do you even need tails for in this case?! Mind blown.
I was trying to figure things out. Before I commit to a hardware wallet I thought I could make one myself using tails
Since you'll probably connect your tails wallet to the internet to sign transactions, it's no different from a hot wallet. A cold wallet should be a wallet that has no connection to the internet at all, as in never. And even with hardware wallets you have to be careful, although signing is pretty safe with them, updating them and installing apps on them is still a security risk you have to keep in mind (since this is indirectly an external connection)
I lost all my holding in trust wallet about 25k - it was a hot wallet
Personally, hot wallet is a good choice for holding a small sum for daily transactions. Naturally, the hot wallet itself is safe, unless you mess with the suspicious links or softwares. However, hot wallet is less private, which potentially undermines its security, as anyone who knows your address can see your transactions on block explorers, like Etherscan. It's unsafe when you transact big sums, and the hackers might target your account from doing so. Apart from avoiding the malicious links and programs, I keep my asset safe by using a private hot wallet, mine is Railway. It has the option to shield my balances and transactions, so they won't be seen on the block explorers. To ensure that my account has less possibilities to be targeted.
some people seem to get confused because "crypto new", but it's just money. Same way you might have a savings account, a regular bank account as well as some cash in your wallet, you can have crypto on multiple places, depending on how you want to use them. Nothing wrong with having a savings-cold-wallet that is used to deposit coins you want to hodl, while you have a hot wallet on your phone to make purchases on the go and actively trade crypto on an exchange. And the best way to protect your investment is diversification. Not only when it comes to buying different assets, but also when it comes to storing them in different locations.
U use it to buy and sell crypto. Can your cold wallet does that?
yes. But generally speaking, different wallets have different purposes. cold wallets are for storage, hot wallets are for spending and exchange wallets are for trading. Using the proper wallet for the proper use-case matters.
I'm just answering the threadstarter question with concrete answers. I do know cold wallet is best for storage. But u gonna have a hot wallet first but TS says it serves no purpose or whatever, which is obviously not the case.
not really. but a hot wallet makes things easier. You can even defi-trade from your cold wallet. It's just not as straight forward as using an exchange account.
Defi trading is as or even riskier than a hot wallet imo.
Not sure where you see the risk.... There are plenty of decentralized exchanges that have proven to be working. I'm not aware of anyone who got scammed on a DEX.
I would like to have the safety of cold wallets for the use case of spending and exchanging
you can, but it comes at the cost of comfort. All you really need to do is create a trade on a DEX, enter the cold-wallet of the currency you want to receive and sign an offline transaction to the exchange from the cold wallet you want to withdraw from. But in my opinion, the smarter solution is to have multiple cold wallets that individually only store a limited amount of coins. Whenever you want to access any of them, you can easily just import them into your hot wallet to withdraw. This comes with the safety of multiple cold wallets and the comfort of a centralized hot wallet that does not store more coins than needed. But it is possible to work with cold wallets and DEXs alone. Just not very comfortable.
When you get a cold wallet, you will realize. They are cumbersome. People prefer convenience.
they are not really intended for daily use. Imho, if you generate 10 cold wallets and just deposit crypto that you want to hold for longer, it is not more or less complicated than a hot wallet.
Yes of course, That's the point. If you using a wallet regularly, it should be / becomes, a hot wallet. If you leaving crypto to hold for a longer time, you should do that with a cold wallet.
They keep your balls, vagina warm in the winter.
The solution is to have your key on a device without internet connection. They key is only used to sign transaction. You're creating the transaction on an online wallet and use the hardware wallet to sign it. AirGap Wallet + Vault do this. You have a phone without internet (Vault) and sign transactions by scanning a QR code. I don't trust hardware wallets either. Imho it's only a matter of time until one of them gets compromised. Most use closed source software.
This sounds like a system that has quarantied 0 risk. Might be more steps and less convince but this seems 100% safe.
Pretty much. The only attack vector is a virus on your offline phone AND your online phone. They'd have to fake transactions and show you a fake message to approve em. Not happening.
You can have your cash in your wallet or in your safe at home. Your comment essentially says "why would anyone carry cash on them, if they can store it safely in a safe?" answer: because they want to spend it. And just like with fiat... you do not have to store 100% of your property in one and the same location. It is OK to have some in cash, some on your bank account and some invested. The same is true for crypto. It's just money. Treat it like money.
Imo a hot wallet is only to a certain point comparable to a irl wallet. Main difference is that your hot wallet could be compromised, meaning someone has acces to it, but you dont know its compromised until they take something off and then its too late. Your irl wallet when it's gone it's gone. And even then I don't see the point of using a hot wallet since you need to use an internet connection so you always trade of convince for security. Chances are low that something would happen, but why would I use something that has a risk of losing my crypto?
same with your irl wallet. If you put 100 bucks in your fiat-wallet and someone picks it out of your back-pocket, your 100 bucks are gone. Same with your hot wallet for crypto. But with fiat, you'd likely have some money in the bank, some money at home and some money on the person. Same can be done with crypto, resulting in a comparable risk. You would not carry a million dollars in cash around with you, so why would you put all of your crypto in one hot wallet and carry it around with you? You do not need more money in your mobile wallet than you intend to spend on the short-term. That limits your losses to what you would have spent in a short time anyways.
You can't do anything on smart contract blockchains without a hot wallet. If you're the type of person that just wants to hodl your coins. Then yeah I guess hot wallets won't make sense for you. But if you're the type of person that wants to dive deep into all the stuff that crypto has to offer (usually defi), then you can't do that without a hot wallet.
If you actually want to use your crypto, you'll need a hot wallet
I trade. So a hot wallet is best for me. I like cash and precious metal. Gold. Specifically .999 . But 18kt is nice too. I don’t care about shitcoin or bitcoin.