OFFLINE & ONLINE WALLETS

OFFLINE WALLETS :

Offline wallets are also known as cold storage or cold wallet. They are used for long-term secure storage of cryptocurrencies and typically holds large amounts of money that are not intended to be touched very frequently.

Cold storage is an offline wallet used for storing bitcoins. With cold storage, the digital wallet is stored on a platform that is not connected to the internet, thereby protecting the wallet from unauthorized access, cyber hacks and other vulnerabilities to which a system that is connected to the internet is susceptible.

• Most cryptocurrency wallets are digital, but hackers can sometimes gain access to these storage tools in spite of security measures designed to prevent theft.
• Cold storage is a way of holding cryptocurrency tokens offline.
• By using cold storage, cryptocurrency investors aim to prevent hackers from being able to access their holdings via traditional means.

There are different choices of cold wallet such as:

1. Hardware wallet
2. paper wallet

HARDWARE WALLET :

A hardware wallet is an external device like a Ledger Nano S or Trezor that stores your private keys. You must push a button to complete a transaction, so hackers cannot take control. Hardware wallet access is locked behind a password or pin. In general, the funds stored on a hardware wallet are fairly accessible, as long as you have access to the wallet.

PAPER WALLET :

A paper wallet is a print out of the private key and pubic address on a sheet of paper or another material. This is generally regarded as a risky form of cold storage, because you can lose the paper or someone could easily find it and access your funds.   

ONLINE WALLETS :

Online wallets are also known as hot wallets. Hot wallets are more common, but they are higher risk. There are a number of popular hot wallets for the Ethereum network which work on your web browser, such as MyEtherWallet. If you download a wallet to your desktop or your phone, that is also a hot wallet because it is connected to the internet.

Most exchanges utilize hot wallets at least to some degree. This allows for fast access to user funds. However, it also means if you are storing your funds on an exchange with these practices, those funds could be at risk. The wallets are connected to the Internet, so they are always being targeted by malicious individuals and hackers.

A hot wallet is a tool that allows a cryptocurrency owner to receive and send tokens. Unlike traditional currencies, there are no dedicated banks or physical wallets that can be used to keep cryptocurrency holdings secure. Cryptocurrency wallets are tools that are commonly used to store and protect these holdings, and they come in many different forms and varieties.

• A hot wallet is a tool that allows cryptocurrency users to store, send, and receive tokens.
• Hot wallets are linked with public and private keys that help facilitate transactions and also act as a security measure.
• Because hot wallets are connected to the internet, they tend to be somewhat more vulnerable to hacks and theft than cold storage methods.

COLD WALLETS VS HOT WALLETS

It is only right to use an offline wallet to store big amounts of bitcoins but for small transactions, trading and gambling online wallet should work fine.If you are holding a lot of bitcoins, go with Hardware wallet If you are planning to use them from time to time otherwise go with Paper wallets for long term storage. Desktop wallet such as Electrum can be a good choice If you can't really afford a hardware wallet.