Cryptocurrencies have paved their way into our everyday lives and our financial transactions, trading and investments to such an extent that it would seem quite impossible some years ago.
If we go back in time we will see that not only there was a lot of scepticism and hesitation over the new crypto ecosystem that was about to be born, but there was a lot of opposition and criticism by more traditional perspectives on the ‘appropriate financial system’. But now for a very big part of this planet’s population, all the scepticism has vaped and cryptos have emerged into full-fledged digital currency, which is gaining popularity and widespread preference in the past few years.
Different purposes with cryptocurrencies
Cryptos are now used by people for so many different purposes and even though the initial plans for cryptocurrencies haven’t yet been materialized (concerning their full integration into our lives), they are continuously growing and creating a crypto economy which keeps expanding and expanding.
People use cryptos for trading, investing, transacting and implementing payment methods in enterprises that accept digital assets – such as online sportsbooks and vedonlyöntisivustot, which are amongst the first ones to have embraced the crypto ecosystem.
And as their popularity is getting stronger, more and more people start to get curious and develop a growing interest in learning about cryptos and using them. One of the main questions these people have is where you store cryptocurrencies after you have purchased them or traded them or even won them in some way.
Well, once you get your hands on cryptos you need a place to store them, just like you store your physical money and real assets. For that purpose, there are the crypto wallets, which have essentially the same function as accounts where you can withdraw cryptos, deposit cryptos or even transfer cryptos.
But the difference is that these wallets don’t actually hold your cryptos. They store the key that is required for any crypto transaction or for anything that you want to do with your cryptos for that matter. Since cryptos “live” in the blockchain technology, they can’t be actually stored and therefore what wallets do is maintain your key to accessing cryptos, transacting them, purchasing cryptos, selling cryptos or even trading cryptos.
There are two kinds of wallets for cryptocurrencies. The so-called hot wallets and the cold wallets. Now, each one of these has some distinctive features and functions which benefit users, but each also has some tradeoffs, that we’ll see below.
Cold wallets
Cold crypto wallets are offline wallets which store keys in hardware devices or even in physical paper. They are not connected to the internet and the user can get access to the wallet simply through the hardware – which can be a bluetooth or any other device for that matter – or by using the paper where the key is recorded.
Cold crypto wallets are generally thought to be much safer and much more secure for users, because they are shielded against online fraud, scams or hackers. No one can get access to your cold wallet unless they have the device or the paper where the keys are recorded. So, it is the absolute responsibility of the cold wallet owner to make sure that the keys are safe.
But the drawback with cold crypto wallets is that the user doesn’t have access to them in a convenient manner as is the case with the hot wallets, especially as they are not connected to the internet.
Hot crypto wallets
Hot crypto wallets are online wallets usually in the form of applications which store your keys online. This means that you can have access at any time and from anywhere as long as you have an internet connection. You can easily make transactions and conveniently use cryptos for any purpose such as trading or gambling or even vedonlyönti after you have found a really good promotion or bonus offered by an online bookmaker.
The fact that you can seamlessly and instantly perform any transaction with your hot wallet is among the basic benefits that this type of crypto wallet gives you. But since it is online, there is always the risk of hacking or any kind of scam.
Both hot and cold wallets have their good features and their risks. It is up to you to see what suits you most. It is important that you know how they function and what are the possible drawbacks before you make your decision!