Have you ever spent on any crypto forum to know which crypto wallets are better? If you have done so, you must have come across the continuous war between cold and hot wallets.
Typically, a cold wallet refers to an offline wallet that stores cryptocurrencies in a physical device. On the other hand, a hot wallet refers to an online wallet that stores your digital assets on a digital platform. Apart from these two, there are other wallets, but hot and cold wallets are most popular.
Before I share why offline wallets are better than online wallets for crypto investing, let me briefly explain them. Visit Ethereum rising if you are planning to invest in digital assets.
When it comes to digital wallets for storing cryptocurrencies, three types of wallets come into mind, and they are:
- Desktop Wallets: Even if they are connected to the internet during transactions, desktop wallets store cryptocurrencies offline when they are not in use. So, you can say that desktop wallets are partly online and partly offline.
- Mobile Wallets: These online wallets store your holdings in a digital platform, but they are also considered hybrid wallets because of their mobility.
- Web Wallets: These are the actual online wallets where your digital wallets are stored in cloud storage, which are connected 24/7 to the servers. The key advantage is you can get access to your virtual currencies irrespective of your location and device.
Offline wallets are typically physical wallets which store your cryptocurrencies offline, and they are mainly two types.
- Hardware Wallets: These wallets are generally like USB devices, and you need a private key for accessing your crypto holdings.
- Paper Wallets: As the name suggests, these offline wallets look like paper. However, if you are technically not sound, it may be hard to use this wallet.
Now, let me explain why offline wallets are better than online wallets for investing.
Offline Wallets vs. Online Wallets
Well, you might argue that online wallets are better than offline wallets and give me several reasons. To be honest, I agree on some points such as convenience, cost of wallets, etc.
However, I am talking about investing in cryptocurrencies that mean you will hold your digital assets for a long time. In that context, offline wallets are better than online wallets, and here are the key reasons behind it.
When it comes to crypto storage or investing, offline wallets provide far better security than online wallets. Since online wallets are prone to many security vulnerabilities, it’s not a good idea to store your large holdings.
Although they are convenient for trading, shopping, and exchange processes, you should not use an online wallet for storing your virtual currencies. You should purchase an offline wallet, preferably a hardware wallet, if you are planning to invest.
Offline Wallets Are Best for Storage and Investing
Often, people get confused between trading and investing in the financial world. They are two different approaches to gain profit from putting your money in assets. Trading refers to frequent buying and selling in which you take some profits by speculating the current trend of an asset.
On the other hand, investing refers to storing virtual currencies for a long time. So, you need to analyze the fundamentals of an asset along with technical aspects like price trends.
Apart from investing, if you want a crypto wallet for storage purposes, go with an offline wallet. For example, you accept cryptos as payments in your business. In such a situation, you need to store your digital assets in an offline wallet.
Hopefully, you got some insights into why offline wallets are better than online wallets for crypto investing. If you are looking for some popular offline wallets, you can go with Ledger Nano S, Trezor, CoolWallet S, KeepKey, etc. Apart from these, if you want to purchase any offline crypto wallets, consider the reputation, size, compactness, price before you choose any offline wallet.