Post ID: 1909
Where are your bitcoins and other altcoins? In your account with a cryptocurrency exchanger, in a microwallet which supports multiple coins, or perhaps you created separate wallets with different online wallet service providers. If your answer falls under any of these category, then your bitcoins and other altcoins are not truly safe. Why?
Hot Wallet Are Less Secure
Compared to it’s alternative, hot wallets (also known as web based wallets) are less secure. This is basically because your cryptocurrencies security keys (both public and private keys) are stored in a server that is always online. Online servers on the other hand are extremely prone to attacks from hackers, scammers and other ill-intention driven action that is popular on the internet.
What am trying to make clear is, since online wallet (hot Wallet) is always online even when under brutal attacks from hackers, there is no 100% guarantee that it will not be compromised even though the companies providing this service have put in place major security measures to ensure that their server is not breached, all an attacker needs is the smallest loophole, and all your coins are gone.
Since bitcoin and other altcoins transactions are not reversable, there is virtually no hot wallet service provider that will promise to give you back the whole or part of the money you have lost in the event when there server is compromised.
And there is more, the breached might not be from the wallet provider, it might originate from yourself, due to your poor internet security measures.
Cold Wallet Is More Secure.
Compared to hot wallet, Cold wallets such as hardware wallet is more secure, because with the hardware wallet, your cryptocurrency security keys are stored offline and is only available online when you connect the hardware wallet to the internet in order to update it’s balance (blockchain) record or when you want to send out payment.
More to storing your security keys offline, most hardware wallets also have in place security measures such as but not limited to PIN protection, Biometric protection and Passphrase protection, to ensure that your coins safe even if the hardware wallet was stolen physically or you miss-placed it. So you see, hardware wallets are truly more secure.
Paper Wallet The Most Secure Option.
A Paper Wallet is considered to be one of the safest methods to save your coins.This is because with a paper wallet, your public and private (security) keys are printed on paper, making them completely offline. When you follow the instructions for using a Paper Wallet, it will be next to impossible for your coins and tokens to be stolen.
When you want to check your coin balance, all you need is to type in your public key in the blockchain explorer search bar of the respective cryptocurrency. When you want to spend your crypto, you will be asked to type in your private key or to scan the Spend QR Code.
The Main Point
When it comes to keeping your cryptocurrencies safe, cold wallets such as Hardware and Paper Wallet is your best option. But when it comes to having quick and easy access to your coins, then Hot wallets does the job better.