Hot Wallet vs Cold Wallet – What are your preferred wallet choices??

[Thor001]

While there has been much discussion and debate on what wallet is better, the right wallet for you will be determined by how you are using Bitcoin in your daily activities. I wanted to share what I currently do and to get your thoughts and ideas in how you store your BTC.

Sometimes referred to as "online wallets," because they are accessible from any device with internet access, hot wallets come with a greater level of security risk compared to cold wallets. However, the fact that people can use them for small transactions and send and receive BTC in a matter of seconds makes hot wallets one of the most convenient ways of exchanging BTC on a daily basis in my view.

When it comes to long-term storage, however, cold wallets remain the top choice in my opinion. Using a hardware wallet, paper wallet, or any other method that keeps your Bitcoin stored offline will provide peace of mind, knowing that your Bitcoin is stored securely away from any possible online attacks. The downsides are that these wallets take longer to gain access to your BTC and are not ideal for making frequent transactions.

Personally, I use:

a cold wallet for long-term HODL

a hot wallet for daily use/small amounts

and this appears to be a balanced approach between security and ease of use.

I would like to hear what you all think?  What are your preferred wallet choices? Are you more likely to use hot wallets, cold wallets, or a combination of both?

[EL MOHA]

Sometimes referred to as "online wallets," because they are accessible from any device with internet access, hot wallets come with a greater level of security risk compared to cold wallets. However, the fact that people can use them for small transactions and send and receive BTC in a matter of seconds makes hot wallets one of the most convenient ways of exchanging BTC on a daily basis in my view.

First of all let me correct this bolded statement, there is never a time or circumstance that an hot wallet guarantees more security than a cold wallet, what it guarantee is actually convince which we sometimes wrongly trade off for security.

Yes I agree with you that cold wallet use for daily transactions can be tiring and never convenient, cold wallet is for large amounts holding and not some wallet you should use most often so the best move if you’re daily bitcoin user is having both wallet. Where the cold wallet holds the large bitcoin and then the hot wallet can have some Satoshi in it and refill can be done from cold to hot wallet periodically.

[rdluffy]

A hardware wallet can offer you the best of both worlds, being both secure and practical 

But that's the idea
I also use a hot wallet for small amounts, where I tend to make transactions more often, when I have to pay something cheap etc

[Halifat]

Sometimes referred to as "online wallets," because they are accessible from any device with internet access, hot wallets come with a greater level of security risk compared to cold wallets.

I think you are getting it wrong here by saying that hot wallets have greater security risk than the cold wallet.

Remember, what all matters is how you generate your private key and how you store them

Cold Wallet operate offline, you can generate and store it offline, this was the reason why it's safer than an wallet when it comes to security.

Online wallets operate online, you can generate and store it offline. This was why it had lesser security compared to cold wallets.

[Charles-Tim]

Some cold wallets can easily be used for daily transactions as long as you are using QR code for the PSBT and the signed transaction that would be broadcasted through an online wallet or a tool.

What that matters is how much you are transacting daily. If the amount is huge, you may want to use your cold wallet. If the amount is small, you will use online wallet instead.

I choose both.

[Hatchy]

Sometimes referred to as "online wallets," because they are accessible from any device with internet access, hot wallets come with a greater level of security risk compared to cold wallets. However, the fact that people can use them for small transactions and send and receive BTC in a matter of seconds makes hot wallets one of the most convenient ways of exchanging BTC on a daily basis in my view.

Describing a hot wallet as operating in a matter of seconds is inaccurate. The transaction speeds are similar for both hot and cold wallets. The main difference is connectivity. a cold wallet is offline, and transactions are signed without an internet connection, while a hot wallet is online, providing direct access to the internet.Using a hot wallet, especially for holding large amounts of coins poses a significant risk and would be reckless. Both wallet types are useful, depending on your specific needs and tolerance for security risks. I personally use cold storage for long term Hodl and a hot wallet for my daily transactions.

[Mia Chloe]

Don't be naive or deceived both are basically of equal importance but have utterly different applications. If you want to HODL for long term then a cold wallet is advised simply because it keeps you safe from the internet where there are way more threats and privacy compromises.

However on the other hand if you have some coins you'll constantly need to spend from as a small business or an individual a hot wallet is very ok. A hot wallet is also safe if you are careful enough and vigilant also. It's a huge stress and threat to you coins infact if you have to constantly visit a cold wallet to sign transactions.

[Stalker22]

Yeah, most people who know their stuff go with your setup.  Think of your cold wallet as your savings - its where you stash the money you wont touch for months, or years.  I use a hardware wallet for that myself.  Then you have your hot wallet, which is for the small amount, like daily purchases, or playing around with DeFi.  You are all set, so dont sweat it too much!

I think you are getting it wrong here by saying that hot wallets have greater security risk than the cold wallet.

Remember, what all matters is how you generate your private key and how you store them

Cold Wallet operate offline, you can generate and store it offline, this was the reason why it's safer than an wallet when it comes to security.

Online wallets operate online, you can generate and store it offline. This was why it had lesser security compared to cold wallets.

You are just restating what the OP said.  I dont get why you disagree that "hot wallets have greater security risk than the cold wallet".  The whole point of cold wallets is to minimize that security risk.

[SFR10]

The downsides are that these wallets take longer to gain access to your BTC and are not ideal for making frequent transactions.

You have a point, but the difference in accessing your assets in HW isn't significant enough to annoy SW users for frequent transactions ^{[SW is better suited for using smaller amounts in public (a HW, regardless of its form, will attract unwanted attention)]}.
^{- Despite testing a lot of SWs, I still use my HWs for almost all of my daily transactions.}

[satscraper]

~

I would like to hear what you all think?  What are your preferred wallet choices? Are you more likely to use hot wallets, cold wallets, or a combination of both?

For daily use I have Tangem wallet, HW from the class of cold storage. It perfectly fits my routine. I simply tap Tangem card on the back of my cell phone and the transaction is signed and broadcast. Long-term HODL is entrusted to Passport Core, which belongs to the same class of cold storage. BTW my Tangem is initialized with child SEED derived from the parent SEED of Passport Core. Thus, I only need to back up one SEED, namely, the parent one.

[BitMaxz]

Based on the poll, it seems they chose a hot wallet over a cold wallet, which is more secure than using a hot wallet.
The downside, you mean the long process to make a transaction, isn't actually long if you already know how to do it.
Like in the Electrum cold storage sample, my setup has two phones: one is offline with my keys, and the other one is an online watch-only wallet. Making a transaction on a watch-only wallet is just like doing it in the normal way; then just scan the generated code with your offline wallet, and then sign the transaction. It won't take long. Then scan the QR code again in the online-watch-only wallet, then broadcast it. It takes a few seconds to sign it, so you can frequently make a transaction in just a few seconds.
I don't know how complicated you think the offline transaction is, but for me it's easy, and it is much safer than just using a hot wallet.

[philipma1957]

While there has been much discussion and debate on what wallet is better, the right wallet for you will be determined by how you are using Bitcoin in your daily activities. I wanted to share what I currently do and to get your thoughts and ideas in how you store your BTC.

Sometimes referred to as "online wallets," because they are accessible from any device with internet access, hot wallets come with a greater level of security risk compared to cold wallets. However, the fact that people can use them for small transactions and send and receive BTC in a matter of seconds makes hot wallets one of the most convenient ways of exchanging BTC on a daily basis in my view.

When it comes to long-term storage, however, cold wallets remain the top choice in my opinion. Using a hardware wallet, paper wallet, or any other method that keeps your Bitcoin stored offline will provide peace of mind, knowing that your Bitcoin is stored securely away from any possible online attacks. The downsides are that these wallets take longer to gain access to your BTC and are not ideal for making frequent transactions.

Personally, I use:

a cold wallet for long-term HODL

a hot wallet for daily use/small amounts

and this appears to be a balanced approach between security and ease of use.

I would like to hear what you all think?  What are your preferred wallet choices? Are you more likely to use hot wallets, cold wallets, or a combination of both?

a trezor is best for daily users

it is best becasue you can unplug it when you are not using it. and plug it when you are using it.

thus it is both hot or cold pretty much at your choice.


a truly cold wallet is not important for a daily user.

since you never take from it.

[apogio]

Is there actually anybody who is serious about self custody who doesn't use both? Or if they don't transact with Bitcoin, then I guess just cold storage.

Nowadays, creating a "cold" wallet is super simple. You don't even need a hardware wallet from the market. You can just have a permanently offline PC and that's essentially a cold wallet.

[philipma1957]

Is there actually anybody who is serious about self custody who doesn't use both? Or if they don't transact with Bitcoin, then I guess just cold storage.

Nowadays, creating a "cold" wallet is super simple. You don't even need a hardware wallet from the market. You can just have a permanently offline PC and that's essentially a cold wallet.

op worded the poll poorly. a daily user does not use a cold wallet since they go online every day.

the closest way to being a daily user using a cold wallet and a hot wallet is a hardware wallet you plug and unplug.

Most long term users have

1 or 2 offline wallets

1 or 2 online wallets

[pooya87]

When choosing a bitcoin wallet, people should try to figure out the pros and cons. What will they lose and what will they gain when using a certain wallet type. It is never as simple as this option is good versus that option is bad scenario.

For example when you use a cold storage, you are gaining a lot of security but you are losing convenience since the spending process becomes slightly harder and with more steps. Or when you are using a custodial account (eg. storing your coins in an exchange) you are losing a lot, from security and privacy to your control. But you are gaining somethings too like having the convenience of having funds ready to react to market movements immediately to maximize your profit.

So at the end of the day you should weigh these options and see whether what you are losing is worth it or not.

With that said, you generally want to store the bulk of your coins (that you don't want to spend regularly) in a cold storage and only use a "hot wallet" for small amounts that you need quick access to, like pocket change in your phone to use to purchase something when you're out.

[apogio]

a daily user does not use a cold wallet since they go online every day.

Certainly! I suppose it's the same with normal finances and FIAT money accounts. Most people have a separate savings account and a spending account, at minimum. The difference of course is that bank accounts have the same security level, regardless if they're savings accounts or spending accounts. With bitcoin, obviously a cold wallet is superior. But as you said, choosing a hardware wallet is the optimal choice for most people, especially those who want convenience.

[satscraper]

Nowadays, creating a "cold" wallet is super simple. You don't even need a hardware wallet from the market. You can just have a permanently offline PC and that's essentially a cold wallet.

Yeah, you are right, but such option is not convincing for those who travel frequently. Even the one/two-week vacation in places far from home may cause problems. Thus, the hardware wallet is more universal approach for individual use. I’m frequent traveler, so my two hardware wallets ^{Passport Core and Tangem} have relieved me from the necessity of schlepping around the cold laptop in addition to my extra-light 14" one, which I use in my daily routine

[apogio]

Yeah, you are right, but such option is not convincing for those who travel frequently. Even the one/two-week vacation in places far from home may cause problems. Thus, the hardware wallet is more universal approach for individual use. I’m frequent traveler, so my two hardware wallets ^{Passport Core and Tangem} have relieved me from the necessity of schlepping around the cold laptop in addition to my extra-light 14" one, which I use in my daily routine

Sure and it's important to find the solution that suits you best and then make sure to do it properly and securely.

Another option could be to transfer some funds in advance in a mobile hot wallet with encryption. That's for pocket money and not significant amounts of course.

[m2017]

Personally, I use:

a cold wallet for long-term HODL

a hot wallet for daily use/small amounts

and this appears to be a balanced approach between security and ease of use.

So, you yourself proposed the most optimal solution - a combined method (hot and cold wallets).

I would like to hear what you all think?  What are your preferred wallet choices? Are you more likely to use hot wallets, cold wallets, or a combination of both?

My opinion aligns with yours, as I believe we should take the best features of each method (while minimizing the drawbacks) to create a combined method. It would be roughly the same as with traditional money - you'd have pocket money on you, and your savings in a safe place, like a home safe or a bank account. The only difference is that instead of a physical wallet in your pocket, you'd have a smartphone with a crypto wallet, and instead of a bank, you'd have a cold wallet (in a safe).

Therefore, I believe there's no need to invent new solutions when the optimal solution has long been devised - a combined method, which also includes risk diversification thanks to multiple wallets.

[Pmalek]

There are different schools of thought. Some people like to categorize hardware wallets as cold wallets, others say that they belong in their own category, and that we should classify wallets as hot, cold, and hardware wallets. Their argument is that a USB-connected device to a computer isn't a cold wallet. It makes sense. Then we also have airgapped hardware wallets, a sub-category of hardware wallets.

I prefer hardware wallets because they are a good balance between convenience and security. You get enough from both sides. I have never been a fan of hot wallets, especially mobile wallets installed on a device you use for all kinds of purposes. Still, they have their use cases. I am even less of a fan of carrying a hardware wallet in public, and that's where a phone or laptop can become useful.