What is a cold wallet? The private key and mnemonic phrase are key components. A comparison of cold and hot wallets.

Many are wondering about cold wallets in the crypto world. Are they really that secure? Can they be hacked? Let's find out.

What is a wallet?

Newbies often get confused. What is this mysterious "wallet"?

A cryptocurrency wallet is not a bank account. It does not store your assets inside it. Rather, it is access. The key to your holdings on the blockchain. A virtual connection to cryptocurrencies and NFTs.

Every wallet has three main components:

Private key. This is your password. Your protection. Do not show it to anyone! Only the owner of the private key has control over the wallet. A random number of 256 bits. Unique. Unrepeatable.

Public key. A kind of identifier. Miners use it to recognize the wallet in the system.

Address. Your "place" in the blockchain. It can be safely shared with others to receive funds. It is calculated from the private key, but reverse calculation is impossible.

A wallet is like a Google account. Or a passport in the world of blockchain. With it, you travel through the crypto universe. It seems like this is truly your digital identity.

No company controls your wallet. It is your property. Send bitcoins. Receive ether. Store NFTs. Complete freedom.

Wallets come in different types. Hot ones are online. Cold ones are offline. The forms are also diverse: hardware devices, mobile applications, browser extensions. Convenient, like a regular card. But with some specific features.

Hot Wallet: Convenient, but...

The hot wallet is always connected. Browser extensions, applications. Easy withdrawal of funds. Simple signing. But... hackers. Constant connection to the network increases risks.

MetaMask is a typical example. You install the extension, and you are already interacting with decentralized applications. You have control. The private key is stored in the program. But it is still not entirely safe. The internet connection is the weak link.

Mobile wallets operate on the same principle. The only difference is the device: a phone instead of a computer. The choice depends on the situation and personal preferences.

Cold Wallet: Security First

Cold wallets are a different matter. Physical devices. USB flash drives. Hard drives. Private keys are stored offline. You connect them to the computer only when necessary. The chances of hacking are minimal.

Even if you lose your device — it's not a problem. Did you remember your private key or mnemonic phrase? Restore access. After all, the assets are stored on the blockchain, not in the wallet itself.

Ledger, Trezor, Coolwallet - popular brands. Not free, of course. From 100 to 250 dollars. Different models, different specifications. For some, the shape is important, for others - the interface. Support for thousands to tens of thousands of coins. NFTs too. Some offer staking and DeFi functions.

But there is a nuance. Order only from official sellers! Check the packaging! Scammers are not sleeping.

How to choose?

Need convenient trading? Get a hot wallet. MetaMask is a good option. Many dApps support it.

Trust Wallet is also not bad. Simple. Clear. Many like it.

For serious savings? Definitely a cold wallet. The choice depends on the budget and needs. CoolWallet from a Taiwanese company seems to be not bad - Russian interface, Bluetooth connection to the phone. Card format. Easy to carry around.

More and more people understand: long-term assets are better kept cold. Full control. Maximum security. Protection from market surprises.