Hot Wallets vs Cold Wallets
Choosing between hot and cold storage depends on your usage patterns and security requirements.
When to Use Hot Wallets
Daily trading and transactionsSmall amounts for spendingDeFi and dApp interactionsNFT collecting and tradingWhen to Use Cold Wallets
Long-term holding (HODLing)Large amounts of cryptoSavings and retirement fundsMaximum security needsSecurity Comparison
| Aspect | Hot Wallet | Cold Wallet |
|--------|-----------|-------------|
| Internet | Connected | Disconnected |
| Convenience | High | Lower |
| Security | Moderate | Highest |
| Cost | Free | $50-200+ |
| Recovery | Seed phrase | Seed phrase |
Best Practice: Use Both
Many experienced users combine both:
**Hot wallet**: Small amounts for daily use**Cold wallet**: Bulk of holdings for securityThe 80/20 Rule
Consider keeping:
20% in hot wallets for active use80% in cold storage for security